It often starts with this simple question: how to protect my assets in a relationship. Invariably this question leads interested parties to learn & explore de facto binding financial agreements and de facto entitlements.
Relationships ebb & flow over time, there no question about that. As a relationship becomes serious though, a couple will often learn important lessons about how each other handles their own finances & finances within the relationship. These things can directly impact your de facto entitlements. Every relationship has what we call “turning points” and unfortunately money and how one party to the relationship handles it within the relationship can be a significant turning point.
If you have started this quest for information with the question: how to protect my assets in a relationship? You need to start with some brutal honesty and ask yourself these questions.
Why are you in this relationship?
- Do you view it as long term or more of a casual relationship?
- Do you currently live together, or will you do so in the future?
- What assets does your partner have?
- Does one party to the relationship bring the majority of the wealth to the relationship?
These questions are important as they directly impact how you should behave financially in your relationship. Being clear with your partner about your preferred level of commitment in your relations is your responsibility irrespective of your contribution or wealth.
One important point: ignorance is not an excuse! You can’t arrive at Court and say “oh, I wasn’t aware or didn’t know”, that is not a defence strategy!
As an example, if you are in a new relationship, not sure of it’s future & thinking to yourself, “how to protect my assets in a relationship” then you probably would not do any of the following things:
- Guarantee a loan for your new partner
- Co signing or being a joint borrower on a loan for your partner’s use.
- Go into business with your partner
- Sign a de facto binding financial agreement as your partner will then be able to provide clear evidence of a de facto relationship to a Court.
- Create a joint bank account & merge your finances
- Make your new partner a beneficiary on your Will or life insurance
- Loan money to your partner
- Buying property together in both names
- Get engaged or married
If you are thinking “how to protect my assets in a relationship” you should maintain a degree of financial independence, think about keeping your own bank transaction account and credit card in addition to any joint accounts. Keep your own home, don’t buy property or renovate property together and limit time with your family. This sounds harsh but if you are unsure about the longevity of the relationship, don’t muddy the water & risk your partner being granted de facto entitlements.
If a relationship that has some longevity or you want to live together but you have assets you wish to protect or children from a previous relationship to support, consider entering into a de facto binding financial agreement.
If you are not sure about the longevity of your relationship or your partner’s ability to contribute financially to your relationship then you should take the time to evaluate the future of relationship while maintaining a level of independence financially & in your living arrangements.
Remember, the information contained on the site does not constitute legal advice. If you think you need legal advice you should contact an Accredited Family Law Specialist.
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