Understanding the financial cost of a broken relationship
“Yesterday is not ours to recover, but tomorrow is ours to win or lose” – Lyndon B Johnson
Relationship breakdown is a fact of life and it can be very costly unless the parties can amicably settle the asset division. A relationship can be any one of the following: married couples, civil union couples or couples who live together in a de facto relationship. When a couple has been in a relationship for three years or more, the assets held automatically become relationship property under the Property (Relationships) Act 1976 (the Act). The Act deals with the division of property when couples separate or when one of them dies, and it can override the provisions of a deceased partner’s will.
However, a couple can choose to “contract out” of the Act and make their own property agreement. They get to specify how their property will be divided. In this case, each person must seek independent legal advice in order for the agreement to be valid. If no agreement is made, then the Act will apply.