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One question we are often asked, particularly from those that have already been through the family law system, is ‘how can I protect my assets from my new partner?’

While a binding financial agreement is often the answer, you have another option, to become familiar with the family law system. If you are familiar with the family law system and how property/financial settlements are structured, you can structure your relationship with your new partner to minimise financial risk.

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Firstly, when can a new partner apply for a family law property settlement?

It’s important to know when a new partner has a right to apply for a property settlement, as until they have a right to apply for a property settlement, your assets are theoretically protected.

It’s important to note, your new partner can apply for a family law property settlement that includes your assets, even if you aren’t married. As long as you live in a genuine de facto relationship, your assets are not protected from your new partner.

There is a myth that you must be living together for two years to be considered a genuine de facto relationship. While it is partially true; a family law property settlement can also be done, if:

  • you have children together; or
  • have registered the relationship; or 
  • one person has made significant contributions; or 
  • another circumstance exists where it would be unjust not to do a property settlement.

Therefore if any of the above applies to you and your new partner, even if you haven’t been together for two years, your new partner may apply for a property settlement. 

So what happens to property owned before marriage in Australia?

If a right to a property settlement does arise, it might shock you that your initial assets (the property you brought into the relationship) are not automatically excluded from the property settlement. And as mentioned above, it doesn’t matter whether you are married or not if a genuine de-facto relationship exists, a property settlement can be done.

When deciding a property settlement split, both parties assets, whether owned jointly or separately, are combined to create a separation property pool. If no binding financial agreement is in place that states otherwise, the property settlement may include any property owned before marriage.

Protecting assets in a de facto relationship 

If all of your assets can be included in a property settlement and your partner has or will likely have the right to a property settlement, how can you protect assets in a de facto relationship? 

While you can do all sort of financial things, set up trusts, move money or hide money overseas, the reality is – all property is included in a family law settlement. Courts can see through trusts, hiding assets overseas isn’t usually a great idea and moving money into someone else’s name comes with its risks. The reality is the best way to protect your assets in a new relationship is usually to enter into a binding financial agreement. However, depending on your situation, you can try to make minor modifications in your relationship to protect your assets without a binding financial agreement. 

Option 1 – Protecting assets in a de facto relationship with a binding financial agreement

A binding financial agreement isn’t only applicable if you are about to become married or de facto. You can enter into a binding financial agreement at any time during a relationship, during marriage and even after a relationship (de facto or marriage) has ended. 

A binding financial agreement means you agree with how your financial resources, assets, and liabilities are divided upon a split. Therefore, if the binding financial agreement covers your current assets, in the event of a separation, your new partner will not be able to claim these assets if they have signed that agreement unless the court decides to set the agreement aside (you can read more about that here).  

Option 2 – Protecting assets in a de facto relationship without a binding financial agreement

Although we recommend a binding financial agreement, it might be possible to protect your assets differently. In 2016, the Family Court decided in Chancellor v McCoy that even after a 27 year de facto relationship, there were no adjustments made to the division of the property between the parties. This meant that they each walked away with the property and superannuation that was in their respective names. The couple had no children, had never co-owned any properties and never intermingled their finances.   

Using this case as precedent, if there is no binding financial agreement in place, a court will likely consider the following factors when deciding whether your partner would have a claim in an adjustment to the property pool:  

  • Whether you had any joint bank accounts; 
  • Whether you keep your finances separate;  
  • Whether you co-owned any assets; 
  • Whether your partner lived with you in a property you owned, and they paid you only an amount equivalent to rent or board and did not otherwise contribute to the property; 
  • Whether you discuss your financial affairs with one another; 
  • Whether you made any future financial plans together; 
  • Whenever you nominated each other as a potential beneficiary in a Will or superannuation fund. 

How to protect the family home from my new partner 

People will often have a house or home from a previous relationship that is the family home. Clients will often come to us concerned about protecting the family home; our advice is that the family home is like any other assets and will likely be included in the family law property settlement. If you want to protect your house from your new partner, the best way would be to enter a cohabitation agreement, a type of binding financial agreement. In this agreement, you should set out the basis upon which you live together and the extent to which you intend to share assets both during the relationship and what you agree is to happen in separation. 

However, just because you have an agreement in place doesn’t necessarily mean your partner still can’t claim in the event of separation. Therefore, it is still best to keep separate finances and even go so far to ensure that your partner does not contribute to the house, financially or otherwise. This means that if your partner is living with you, ensure that they only pay you rent or board in the amount any other tenant would pay and does not pay any more than that amount or contribute towards other bills or mortgage repayments. However, additional to that is to ensure that they don’t contribute non-financially through renovation, cleaning, gardening, and cooking. If your partner does do some of these things, it doesn’t automatically entitle them to these things; it shows an intention to share a life, not a property. However, it could mean they are entitled to an adjustment of the property pool, and your house may not be protected in separation.   

You have other options, including putting the home in a trust or gifting it as an early inheritance. Ultimately, no matter what you do, it will likely be seen as a financial resource and included in some way, shape or form in the property settlement. Therefore your best option is usually a binding financial agreement/cohabitation agreement. 


While we recommend it, one should note that not even a binding financial agreement is rock solid. If you have a binding financial agreement in place, should circumstances or assets change, or should other factors be at play, it may not protect your assets in a new relationship. Additionally, not having a binding financial agreement and simply separating your bank accounts or lives may not be enough. If you want to protect your assets in a new relationship, you should seek independent legal advice from a family lawyer as soon as practical. 

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