De Facto Relationships – Are you in one?

Although being in a ‘relationship’, being a ‘de facto’, ‘seeing each other’ or simply ‘casual’ are commonly interchangeable phrases in common talk, the implications of being in a De Facto relationship are significant.

Unlike marriages, where there are formal ceremonies and certificates to delineate the commencement of marriage, de facto relationships lack any formal recognition – per Justice Mushinin Moby & Schulter (2010) FLC (see below).

The problem therefore arises as to the sincerity of the relationship – whether it is in fact de facto or otherwise ‘casual’.

Section 4AA of the Family Law Act (the ‘Act’) sets out criteria to be considered for this purpose.  Subparagraph (c) operates as a catch-all, ‘having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis’.

The Gateway requirement for the Court’s jurisdiction is prescribed in Section 90SB of the Act –

A court may make an order under [part VIIIAB div 2] in relation to a de facto relationship ONLY IF the court is satisfied:

a)      that the period, or the total of the periods, of the de facto relationship is at least 2 years; OR

b)      that there is a child of the de facto relationship; OR

c)       that:

(i) the party to the de facto relationship who applies  made substantial contributions of a kind mentioned in paragraph 90SM(4); AND

(ii) a failure to make the order or declaration would result in serious injustice to the applicant;

Practical Considerations – it is necessary to consider the entirety of the facts of the relationship.

Justice Mushin in Moby & Schulter held it was inappropriate to try to draw comparisons between a marriage relationship and a de facto relationship because the legislative schemes provide that a marriage can only be between one man and one woman.

The legislative definition of a ‘de facto relationship’, however, enables a person to be in two de facto relationships simultaneously and also recognises relationships between two people of the same sex, together with other variations in relationship particulars.

Justice Mushin expressed that the ‘concept that a de facto relationship is, for the purpose of the legislation, diverse’ and that ‘the whole structure of the legislation confirms that view’.

On all of the evidence Mushin J concluded that a de facto relationship had existed between the parties for 7 distinct periods over 7 and a half years between May 2002 and Oct 2009. The first period of the relationship was of 2 years’ duration, the remaining periods were each of approximately 6 months in length.

The Applicant, Moby (‘M’), asserted that a De Facto relationship existed between herself and the Respondent (‘S’).

What seemed to tip the scales in favour of holding a De Facto status in this case was that the parties lived together for alternating 2 weeks every month. For the 2 weeks of the month which S’s teenage daughter lived with him as part of his custody arrangements from his previous marriage, M moved out of the house.

His honour held that despite S’s evidence, the relationship was sexual, M had provided a good deal of the chattels to furnish the residence, S paid rent for M and paid the outgoings of the property and evidence existed that S had publicly affirmed their relationship.

Jonah & White [2011] FamCA 221 – Just a Mistress

Justice Murphy held that no de facto relationship was established for the reason that ‘absent from the relationship … was the ‘merger of two lives into one’, or the ‘coupledom’ as earlier referred to’, and thus that there was no de facto relationship.

Justice Murphy explained, ‘In my opinion, the key to that definition [of being in a defacto relationship] is the manifestation of a relationship where ‘the parties have so merged their lives that they were, for all practical purposes, ‘living together’ as a couple on a genuine domestic basis’. It is the manifestation of ‘coupledom’, which involves the merger of two lives’.

In this case, the parties kept their relationship, of 17 years, secret (the parties did not socialize together as a couple), the parties kept and maintained a household distinct from the other, the parties did not co-mingle assets, did not engage in joint expenses and otherwise acquitted and maintained property in their individual capacities.

The parties rarely socialized with each other’s friends and, for all intensive purposes, were successful in keeping their relationship clandestine.

Factors pointing towards a De Facto relationship were that the two had engaged in a sexual relationship exclusive of other partners, apart from Mr White maintaining his relationship with his wife and having ‘a few one night stands’; Mr White supporting Ms Jonah financially up to $2,500 per month for 11 years and Mr White contributing a lump sum of $24,000.00 to Ms Jonah’s home.

Conclusion

Whether a relationship is just ‘casual’ or whether it crosses the threshold as being a ‘De Facto’ is a matter of adjudication on the facts.

In Jonah and White, the trial judge held that the parties were ‘two people who each sought to, and did in fact, maintain separate lives’, even though they met regularly over a lengthy period of time.

Thus the ultimate question remains, whether ‘the parties have so merged their lives that they were, for all practical purposes, ‘living together’ as a couple on a genuine domestic basis’.

Intestacy: What happens if I die without a Will?

These rules, referred to generally as schemes of distribution on intestacy, or rules of descent or inheritance of property, determine who is to receive an intestate’s property and how much each is to receive.

These rules are ‘default’ provisions which distribute the estate of a deceased person in the absence of an effective testamentary disposition by that person.

In Victoria the Administration and Probate Act 1958 – Part IA provides for the ‘default’ provisions. In summary these provisions are as follows:

The term partner includes a person who was either married to, in a registered or unregistered domestic partnership with the intestate or registered caring partner immediately before the intestate’s death. There is a minimum requirement that an unregistered partner has lived with the intestate for a continuous period for at least two years prior to death or the relationship has resulted in the birth of a child. There can be multiple partners.

Survivor requirements: Section 70C

The beneficiary under an intestate estate is not entitled to participate in the distribution of the estate unless they survive the intestate by at least 30 days.

Partner and no child or other issue: Section 70J

If an intestate dies leaving a partner (but no children or other issue), the partner is entitled to the whole of the intestate’s residuary estate.

Partner and issue of that partner: Section 70K

if the intestate dies leaving a partner, and children or other issue who is also a child or other issue of that partner, the partner receives all of the intestate’s residuary estate. This does not apply is an intestate leaves more than one partner or a child or other issue who is also not a child or other issue of the intestate’s surviving partner.

Partner and child not the child of that partner: Section 70L

if the intestate dies leaving a partner, and a child or other issue who is not the child of that partner, then:

if the intestate’s residuary estate is worth less than the statutory legacy amount (currently $451,909) then the partner receives the whole of the estate, including the personal chattels of the intestate.
if the intestate’s residuary estate is worth more than the statutory legacy (currently $451,909) then:

the partner is entitled to the personal chattels, the statutory legacy amount (plus interest from the date of death) and 50% of the balance of the intestate’s residuary estate; and
the children of the intestate receive the remaining 50% of the balance of the intestate’s residuary estate.
If one or more of the intestate’s children predeceased the intestate leaving children who survived the intestate then the share of the deceased child is to be divided between that deceased child’s children and so on.

More than 1 partner and no child: Section 70Z

if an intestate dies leaving multiple partners (and no children) the partners are entitled to 100% of the intestate’s residuary estate:

If there is a distribution agreement, in shares in accordance with that agreement; or
in accordance with a Distribution Order from the Court; or
in equal shares.

More than 1 partner and child or issue of one or more of those partners: Section 70ZA

if an intestate leaves more than one partner, and a child or other issue who are also a child or other issue of one or more of those partners, the partners are entitled to the whole of the intestate’s residuary estate:

If there is a distribution agreement, in shares in accordance with that agreement; or
in accordance with a Distribution Order from the Court; or
in equal shares.

More than 1 partner and child or issue not the child or issue of one or more of those partners: Section 70ZB

if an intestate leaves more than one partner, and children who are not children of those partners, then the partners receive:

to share the personal chattels of the intestate by distribution agreement, by Distribution Order, or in equal shares;
AND

2. if the intestate residuary estate is worth less than the statutory legacy amount (currently $451,909) then the partners

entitled to 100% of the intestate’s residuary estate by distribution agreement, by Distribution Order or equally;

OR

3. if the intestate’s residuary estate is worth more than the statutory legacy amount (currently $451,909) then:

o then the amount of the statutory legacy shall be paid to the partners by distribution agreement, by Distribution

Order or equally (plus interest on that amount from the date of death);

o one half of the balance of the intestate’s residuary estate shall be paid to the partner(s) by distribution agreement,

by Distribution Order or equally;

o any children of the intestate are entitled to share in the other half of the balance of the intestate’s residuary estate

(and if more than one, equally).

No partner but leaves children: Section 70ZG

if the intestate leaves no partner but leaves a child or children, the residuary estate is to be distributed to the surviving child (and if more than one, equally). If any of the children predecease the intestate leaving children of their own, then the children of the deceased child shall receive the share which their deceased parent would otherwise had received.

No partner, no child: Section 70ZH

if the intestate leaves no partner and no children, the intestate’s residuary estate must be distributed equally between the parents and only one parent, the parent is entitled to the whole residuary estate.

No partner, no child, no parent: Section 70ZI

if the intestate leaves no partner, children or parents, the siblings of the intestate (and if more than one, equally) receive the intestate’s residuary estate. If any of the siblings predecease the intestate, leaving children of their own (i.e. the nieces or nephews of the intestate) then those children (if more than one, equally) shall receive the share of the intestate’s residuary estate that their deceased parent would have otherwise received.

No partner, no child, no parent, no sibling and no issue of a sibling: Section 70ZJ

if the intestate leaves no partner, children, parents, siblings or children of deceased siblings, then the grandparents (and if more than one, equally) receive the intestate’s residuary estate.

No partner, no child, no parent, no sibling, no issue of a sibling and no grandparent: Section 70ZK

if the intestate leaves no partner, children, parents, siblings, children of deceased sibling or grandparents, the aunts and uncles (and if more than one, equally) receive the intestate’s residuary estate. If any aunts and uncles predecease the intestate, leaving children of their own (i.e. cousins of the intestate) then the children of the deceased aunt or uncle (if more than one, equally) shall receive the share of the intestate’s residuary estate that the aunt or uncle would have otherwise received.

No person entitled to take estate: Section 70ZL

if there is no person entitled to the Estate of an intestate under this Part, then the intestate’s residuary estate is taken to be property that has no owner and passes to and belongs to the Crown.

In summary, without a Will, you risk having no control over who benefits from an estate and the proportions in which they benefit. You have no control over who administers your estate. There is no protections and special clauses built into the distribution which may disadvantage beneficiaries. There is no nomination of guardians for your children. The costs of administering your estate may be more expensive.

We recommend that you consider having in place a properly constructed Will to ensure that you decide on how your estate is distributed upon your death.

Contact Malkin Lawyers. We offer fixed price Wills for individuals and partners. Enquire on our discounted package deals for 2 mirrored wills and Powers of Attorney.

Binding Nominations for Super Funds

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