Mentions

Noam Peleg

Valentine's Day is synonymous with love and romance. Whether you're making a commitment, or breaking one, it is a good idea to brush up on the legal implications of your choices, UNSW Law Senior Lecturer Dr Noam Peleg says.

"A lot of people have no idea what they're getting into in terms of the financial obligations they're making. They need to be aware of what they might be facing if a relationship ends," Dr Peleg says. 

What is marriage in the eyes of the law? 

In Australia, the Marriage Act 1961 instituted a unified legal definition of marriage under federal law. Everything else including divorce, child support and division of assets falls under the Family Law Act 1975.

'Marriage starts once you undergo a valid marriage ceremony and sign the legally binding document. From that moment onwards, wherever you go in Australia or around the world, you're considered married in status'

"The Marriage Act stipulates how one can get married, the conditions that need to be met such as age and who can perform the marriage ceremony, uniformly across Australia," Dr Peleg says.

"Before 1961, each Australian state or territory had separate marriage laws, meaning there were inconsistencies in terms of recognition of marriages, and so on. So, the Act was introduced to create a unified legal definition of marriage under federal law. 

"Marriage starts once you undergo a valid marriage ceremony and sign the legally binding document. From that moment onwards, wherever you go in Australia or around the world, you're considered married in status. So, every interaction you have with your partner – with other peoples or with institutions – you will be seen as a married person, for example, if you apply for a US Visa, you will do so as a married person. You don't need to go through any hoops to prove it." 

signing marriage contract

Marriage starts once you undergo a valid marriage ceremony and sign the legally binding document. Photo: Shutterstock.

The Marriage Act has been amended on numerous occasions, notably the Marriage Amendment (Definition and Religious Freedoms) Act 2017 to allow same-sex marriages. Prior to this, the Act stipulated that marriage was a union between one man and one woman, to the exclusion of all others, voluntarily entered into for life, and same-sex couples could only be recognised in de facto relationships.

In 2018, there were 119,188 marriages in Australia, up 6,234 (5.5%) compared to 2017, according to the ABS, and against a trend of the last 20 years where the rates of marriage have been in decline. 

Are you at a disadvantage in a de facto relationship? 

It is common for couples who aren't married to live together. Couples who have lived together in a genuine domestic relationship for two years are considered to be in a de facto relationship, even without their knowledge.

“The common scenario is that two people, after dating for a while, move in together and live, as the law sees it, as ‘husband and wife’. Even if they don’t discuss marriage, don’t want to get married, or having a very causal level of commitment to each other, the law can recognise them as a de facto couple”, Dr Peleg says.

'The differences between the financial implications in long term de facto relationships and marriage are almost negligible'

De facto relationships provide most of the same rights and responsibilities afforded to married couples. The Family Law Act 1975 treats de facto relationships the same as marriages in recognising the rights of parties.

For instance, if you are in a de facto relationship, you may be entitled to a share of the estate, or to claim financial support from the estate, in the event of the death of your partner. 

"The differences between the financial implications in long-term de facto relationships and marriage are almost negligible," Dr Peleg says. 

However, those rights can be more difficult to assert, and are not always recognised in practice. 

"Anytime you would like to make a claim on behalf of this alleged status, you need to make your case, and the onus is on you to prove it," Dr Peleg says.

"One question that will be raised is when your relationship began, because there is no one constitutive moment that you can declare from this moment onwards, like a marriage ceremony, I'm now in a de facto relationship. Even if you were to hold a commitment ceremony that, in and of itself, is not enough to constitute a de facto relationship.”

In 2018, there were 49,404 divorces granted in Australia, similar to 2017 (49,032 divorces), according to the ABS. The median duration of marriage was 12.3 years, and 47.3% of divorces involved children.

Two is company…

The Marriage Act only recognises marriages between two people and does not accept any other forms of union. 

“Interestingly, while you can't be married to two people, you can be married to one person and be in a de facto relationship with another person,” Dr Peleg says.

"It's quite a common situation when a marriage is coming to an end, but there is a beginning of a new relationship, there can be some overlap. Sometimes people won't bother to divorce their spouse. 

"In principle, you can also be in two de facto relationships. That's a bit more complicated given the burden of proof that you have, you know, to establish each relationship." 

The road to divorce 

divorce

In 2016, for both men and women, the divorce rate was highest for those aged 25–29 years. After that, divorce rates lower slightly, staying steady for couples during their 30s before a second peak in their late 40s. After 55, couples become increasingly less likely to divorce. Source: Australian Institute of Family Studies. Photo: Shutterstock.

Divorce is the legal dissolution of a marriage by a court. Australia established the principle of no-fault divorce in the 1975 Act. The court no longer examines why a marriage has ended when granting divorce, only that the marriage has broken down irretrievably, with no reasonable likelihood of the parties reconciling. 

You can apply for divorce either on your own, or jointly with your spouse. If there are children under the age of 18, the court can only grant a divorce if there are proper arrangements in place for their development. 

'The law stipulates that there needs to be at least 12 months gap between the separation and when you can apply for divorce'

When a de facto partnership ends, and this can happen once one of the parties has decided to leave the relationship, assets are split in a similar way to married couples going through divorce. In principle, either person can make a claim on the other's property, savings or even superannuation. 

"What does differ is the time [frames involved]: when speaking about the division of assets post-separation,” Dr Peleg says. “For de facto couples, you usually can’t make a claim if the relationship lasted less than two years.”

For married couples, however, "the law stipulates that there needs to be at least 12 months gap between the separation and when you can apply for divorce. Separation doesn't have to be a physical separation, and for many couples, the financial reality or the care for the kids means that they will be 'separated under one roof'," Dr Peleg says.  

There will likely to be more amendments to the Family Law Act in the future, according to Dr Peleg.  

"The Australian Law Reform Commission report, Family Law for the Future: An Inquiry into the Family Law System last year stipulated a number of areas of change that the Family Law Act might undergo. There were suggestions, for instance, to transfer some of the issues to states Courts, so family law and child protection matters can be jointly decided. The intentions are to cut cost and maybe the huge backlog that the system experiences, where people can wait over two years for their conflict to be resolved.”

So how do they work out the split?

With both divorce and de facto separation, comes the responsibility to divide the family assets. Everything that both partners have becomes part of the balance sheet of family assets to be divvied up. 

"The law treats everything that these two people have either jointly or individually as part of the family assets – it usually doesn't matter if it was owned prior to the marriage or the relationship, who formally owns the house or the car, and so forth."

The judge decides what is just and equitable based on the unique circumstances of the case.

divison_of_assets.jpg

Photo: Shutterstock.

“The Family Court, or the Federal Circuit Court, is a one-stop-shop. One judge hears all the issues, then they resolve all the disputes. [The court] will issue an order saying those are the assets that will be divided and that is final,” Dr Peleg says.

The court also considers the different contributions that have been made to the relationship – financial and non-financial, such as caring for children and homemaking – with both given equal weight. The law also considers the future needs of the individuals: in terms of future earnings and lifestyle. 

"What the court is trying to do is assess the maintenance needs of the parties, and factor this into the equation of how the assets are divided. So, if one party has greater maintenance needs than the other, they will get the slightly bigger portion.

“For example, it might tip the balance in favour of one person, who will get a slightly bigger portion of the assets from what they have at the moment, because the earning potential is less.”

Maintenance, assets and child support

Children are a key factor in defining the split of assets. The Child Support Act of 1989 stipulates a parent’s duty to financially support their child(ren), as distinct from the nature of the relationship between the parents.

"The law sees these two individuals as under the obligation, under the duty to financially support the children," Dr Peleg says. "From the point of view of the law, if a mother who has a child is married, then her husband is considered the father, even if he's not the biological father. The same goes for those who are in a de facto relationship during pregnancy.

"The child support assessment act adopts these presumptions. But having said that, they are only presumptions, and once the genetic father is identified, usually by a DNA test, it is likely that he would be recognised by the law as such."

The court operates on the premise of a clean break, ending all financial obligations at the point of divorce. 

"That's why we rarely see periodic payments or support being paid on a monthly basis for years to come like we've seen other countries," Dr Peleg says.

Can you avoid all this with a prenup?

Prenuptial agreements fall under the Family Law Act too, as a form of a special contract. A prenuptial agreement is a written contract entered into by a couple before marriage, (or even during the relationship), that enables them to supersede the default laws that apply in the event of a marriage ending.

signing prenuptial agreement

Photo: Shutterstock.

In the event of a divorce, or separation of de facto partners, this could mean waiving rights to exercise the laws that govern the division of property and other financial assets. 

Prenups are legally binding, and there are technical conditions parties must meet even to sign one, including having separate lawyers. 

"Each person entering into the agreement must seek independent legal advice and get a signed statement from a legal practitioner," Dr Peleg says.  

'It is healthy to discuss these issues before you commit to a relationship, even if you don't sign an agreement'

"In principle, if people give up all their entitlements to assets in the event of separation, it's almost impossible to enforce entirely," Dr Peleg says. "There are lots of ways around it, for example, concealing assets, spending the money, transferring property [title]. However, if one of the parties tries to defraud the other, for example by not disclosing material matters, or if material circumstances, such as the care for the children, change, the agreement can be set aside. 

“Many solicitors won't go near it because if something goes wrong, they could be sued for malpractice."

Premarital mediation is an alternative to a prenuptial agreement, where the engaged couple makes decisions upfront about finances and planning their family, with the assistance of the mediator. 

"It is healthy to discuss these issues before you commit to a relationship, even if you don't sign an agreement," Dr Peleg says.


Ben Knight