Although moving in with your partner can be exciting, under certain circumstances it could spell disaster for your retirement.
Moving in together is an exciting time for people in relationships. The last thing on your mind is probably what might happen in the event of a breakup.
But it’s worth knowing that if you split up, your ex could file a legal claim for up to half of your retirement, under certain circumstances.
And for all states (except Western australia), it is not necessary to be married, have children or own a house together; even people in de facto relationships may have to split their super when they break up.
For the purposes of family law, a de facto relationship is when you and your partner live together in a relationship as a couple on a genuine domestic basis but are not married.
The retirement of both partners is included in the group of assets divided at the time of separation. Super is often the biggest financial asset younger people have, so make sure you know the laws He says about this issue.
This is what you need to know.
By court order or by agreement
Super splitting could become a bigger problem for years to come, as mandatory contributions from employers rise.
According to the Attorney General’s Office website, retirement can be divided by:
- an order of the Federal Circuit and Family Court of Australia (or Western Australian Family Court for couples married in Western Australia); or
- a retirement agreement (a financial agreement that addresses retirement interest).
the Family Law Act 1975 gives the Family Court the power to deal with the retirement interests of spouses (including de facto spouses).
Retirement generally cannot be viewed as a cash payment; in most cases, it is transferred to the recipient’s retirement account.
These laws were designed to address the long-standing problem where a person in a relationship, usually a woman, would have a small amount of super in relation to their partner.
This is because, a generation ago, it was common for women in particular to leave work and spend many of their productive years as primary caregivers for their children. Even now, women are more likely than men to reduce their working hours to start a family and have a fraction of the retirement of their male partners.
The laws are meant to ensure fairness in the event the relationship falls apart and to improve the life of the person with the least financial power in the relationship once it ends.
But society has changed and we are more likely to break up and re-associate. That, plus the higher amounts involved, means that these cases may appear more often now than in the past.
How do these laws apply to me?
You don’t have to be married to potentially have to divide your assets.
Applies if they have a child together or have been in a de facto relationship for at least two years.
The definition of a de facto low relationship Section 4AA of the Family Law Act of 1975 it is based on whether they lived together in a genuine domestic relationship.
According to the Law, a person is in a de facto relationship with another person if:
- people are not legally married to each other; and
- the people are not related by family
- Taking into account all the circumstances of their relationship, they have a couple relationship that lives together on a genuinely domestic basis.
The circumstances of the relationship are set and include issues such as how you organize your financial arrangements, whether you have children, your commitment to a life together, and whether other people would see you as a couple.
So consider these issues before moving in together or taking steps to cement your relationship.
Remember that any division is not necessarily half. You can enter into an agreement without going to court, but if you end up in court, the judge will take into account the relevant circumstances, including whether you have children, direct and indirect financial contributions to the relationship, and the ongoing needs of each party. .
And if a relationship has ended in bitterness, hopefully judges will be on the lookout for the possibility that a legal claim by an ex-partner’s superintendent could be part of a vindictive effort to cause heartbreak – and take that into account.
Come in with your eyes open
It is not common for people in new or de facto relationships to write legal documents to protect themselves.
Go in with your eyes open, but you must have some confidence. Engaged couples sometimes consider drafting a financial agreement (a prenuptial agreement), which can address issues like the super.
You can read more about retirement and your rights in the event of a break in the website of the federal attorney general, which has also generated “frequently asked questions” fact sheet on the matter.
You also can:
- search online for fact sheets on the subject produced by your state government
- contact a legal aid organization in your state or contact a toll-free legal help line such as LawAccess NSW or its equivalent in Victory
Remember, a financial agreement, whether before or after the relationship is broken, is not binding if both parties have not obtained financial advice.
Couples who have already been through the hardships of divorce, separation or being widowed may be more likely to make legal arrangements to choose what will happen in the event of separation or death, especially if they want to ensure that the children in that relationship are financially supported. safe.
And absolutely everyone, young and old, should seriously consider where your superintendent will go if you die. It is important to make sure your supermarket goes where you want it to go.
This article originally appeared on The Conversation and it was reproduced here with permission.