PROPERTY ADJUSTMENT AGREEMENTS
                     BETWEEN DEFACTO PARTNERS
The Property Law Act enables Queensland Courts to make property settlement orders
between defacto spouses.
Under the Act, a defacto spouse may apply to a court for adjustment of property interests:
1. if he /she has lived in a defacto relationship for two years or more or
2. if there are children of the defacto spouses under the age of 18 years or
3. If there have been financial or non-financial contributions made directly or indirectly
   by or for the de facto spouses to the acquisition, conservation or improvement of any
   of the property of either or both of the de facto spouses and failure to make the order
   would result in serious injustice to the de facto spouse
40% of marriages end in separation and divorce. Statistics on defacto relationships are
not so readily available but it would be certain that a higher percentage of defacto
relationships end in separation leaving the parties with property issues to resolve.
It is often difficult for former defacto spouses to reach agreement after separation.
Applications for a Court determination about financial matters usually take in excess of a
year and sometimes much longer to resolve. The legal costs of a full property settlement
dispute for each party will usually exceed $50,000 and sometimes can be more than
double that amount. The outcome is uncertain and at least one former partner and often
both are disappointed.
The position of a former defacto spouse after the death of his/her partner can be difficult
and uncertain when he/she is dealing with the personal representatives of the deceased
Even issues which are settled by agreement after separation or death can involve
significant expense as the complexities involved in achieving certainty and finality and
often tax and stamp duty implications can require a substantial input from legal and other

To minimise the possibility of expensive disputes with uncertain results, the legislation
allows and encourages parties to defacto relationships to plan their financial future, by
entering into recognised agreements.

The main contingencies to be considered to be dealt with by the recognised agreement
1.    Separation
2.    Death of one of the defacto spouses during the relationship
3.    Disposition of various classes of property on separation or death such as :-
      • property owned by one of the partners before the commencement of the
          defacto relationship
      • property acquired by one or other of the partners during the relationship from
          their own separate moneys
        •   Inheritances
        •   Windfalls

The recognised agreement may also deal with :

   1.   Arrangements in relation to day to day joint expenses
   2.   Arrangements about day to day personal expenses and obligations
   3.   Arrangements about money pooled for joint expenses and purchases
   4.   Separate moneys
   5.   Arrangements in relation to the acquisition and financing of a jointly owned
   6.   If there have been any substantial financial arrangements made by one of the
        defacto spouses for the benefit of the other before the agreement is entered into, is
        the benefit thereby conferred to be treated as a gift or a loan or taken into account
        in any other way
   7.   Arrangements about household maintenance and chores.
   8.   What happens if
        • you decide to marry?
        • you have a child?
        • One of you suffers a disability affecting your financial capacity?
   9.   In what circumstances will the agreement be varied and how?

How much will it cost?
In our experience, a reasonably comprehensive recognised agreement for parties with
relatively simple property and financial arrangements will cost about $3,300. This cost
will be greater if the financial and legal structures are more complex.

What are the benefits?
The obvious benefits are relatively speedy resolution on separation, relative certainty of
outcome and the saving of the substantial costs of a dispute.

The less obvious benefits are derived from the focus on your individual and joint goals,
the opportunity to renew your resolve about those goals. On occasions, the process
highlights disparities in parties’ expectations and goals the resolution of which will
strengthen the relationship.

Parties need to be aware that on other occasions the process may bring into sharp relief
disparities in expectations and goals which may prompt one or both of the parties to
change the nature of the relationship or discontinue it altogether. In the latter case the
advantage is the bringing forward the realization of irreconcilable differences sooner
rather than further into the relationship when one or other of the parties may have much
more to lose.

John Curr of this office has 30 years of experience in family law and is able to advise you
on a plan for your property arrangements.

LEITH SINCLAIR & CO                       11 August 2008

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