As a divorce lawyer practicing in Sydney for the last 15 years, I have learnt something important: the only person you can count on is yourself.
You can’t trust your partner to “do the right thing” or to be “fair” if there is a breakup. People change when a relationship comes to an end. I have seen it.
My clients over the years have battled it out with their former spouse or de facto for ownership of their “nice things”.
These nice things come in all shapes and sizes, some valuable, some sentimental.
I get it. I’m protective about my nice things too. I value them and I am determined to protect them at any cost.
Luckily, I am in the fortunate position of being able to learn from other people’s mistakes.
Is the solution to not marry? No. Since March 2009, de facto and married couples are treated the same. Your de facto has two years from separation to make a claim on your assets if they can establish one of the following:
- You lived together as a couple on a “genuine domestic basis” for two years; or
- You have a child together; or
- They make substantial contributions on your property and there would be serious injustice if they were not permitted to make a claim.
The only way to protect your assets in a relationship breakdown is with a Binding Financial Agreement (“BFA”) under the Family Law Act. This is colloquially known as a “pre-nuptual agreement” or “pre-nup”.
My partner and I wanted to live together and start a family, but divorce lawyers don’t just move in with their partners willy nilly. I have had long term relationships but I never felt comfortable living together. My key motivation was to never put myself in a situation where I was vulnerable to a claim on my assets.
An important consideration was my house. I don’t rent my home: I own it.
In property law, even if you are given recognition for your superior initial contributions in a property settlement, it is never “dollar for dollar”. The longer the relationship, the more contributions your partner can say they made to “catch up” to you, and your contribution will be watered down. To top it off, the person who has a lesser income and less earning capacity will receive a percentage “swing” in their favour which screws the high income earner over to what may be an unjust result.
There was considerable risk with my partner moving into my penthouse apartment in Neutral Bay. If that was his home, he could make a claim on it.
We wanted to live together but I wasn’t taking any chances. A sacrifice had to be made. I suggested we buy something together and make that part of our BFA. It was a win-win. He was able to get into the Sydney property market and I was able to protect the penthouse and my other assets.
We house-hunted for over a year and finally found a lovely North Shore home earlier this year. I updated the BFA with all of the details. We own the property 70/30 as tenants in common. We have two mortgages dividing the loan 70 per cent to me and 30 per cent to him. I pay my loan, he pays his loan. All expenses for our house like rates, insurance, repairs and council rates we divide 70 / 30. We have a joint credit card that we are allowed to use for “joint” expenses, these are specifically listed in the BFA. We pay that credit card 70/30.
The BFA also provides my partner with a pay-out in addition to his entitlement in our house. The longer we are together the larger the pay-out. There is also a spouse maintenance clause for his benefit.
Annexed to the BFA is a schedule of my “nice things”. Those items are mine and he cannot make a claim on them. It includes my properties, Superman collection, my Star Wars memorabilia, and my designer shoes and bags.
I am nearly 40, so I have a lot of nice things. My towels, my linen, and even my pantry with its colour coded Tupperware is in the BFA. If you are going to have a BFA, best go all out right?
Finally, in around June 2018, my BFA was complete. I consider it the best BFA ever drafted. My boyfriend now has the document for him to seek independent legal advice.
Whilst there is no guarantee that my BFA will never be challenged, I sleep at night in the deep slumber of a woman who knows she did all she could, to keep and protect her nice things.
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