She's On The Money - Protecting Your Assets in a Relationship

Episode Date: April 26, 2022

On this episode we dive into the ins and outs of asset ownership and protection in a relationship. What are the legal implications of being in a De facto relationship and how does this effect your financial situation? Listen in to get the skinny!The advice shared on She’s on The Money is general in nature and does not consider your individual circumstances. She’s on The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. Victoria Devine and She's On The Money are Authorised Representatives of Infocus Securities Australia Proprietary Limited ABN 47 097 797 049 AFSL - AFSL 236523.See omnystudio.com/listener for privacy information.

Just before we get started, we'd like to acknowledge and pay respect to Australia's Aboriginal and Torres Strait Islander peoples. They're the traditional custodians of the lands, the waterways and the skies all across Australia. We thank you for sharing and for caring for the land on which we are able to learn. We pay our respects to elders past and present and we share our friendship and our kindness. She's on the money. She's on the money. Hello and welcome to She's on the Money, the podcast for millennials who want financial freedom. In 2020, almost 79,000 marriages were registered in Australia and over 49,000 divorces were granted. While we've dedicated an episode in the past to safeguarding our finances in the

event of a divorce, one of the topics we're yet to have properly untangled is that of de facto relationships. What happens if I split with my partner who lives with me in the house that I own? How will my super be impacted should we split? And most importantly, how can I make sure my finances are protected? My name is Georgia King and joining me to help answer these questions and plenty more is financial advisor Victoria Devine. V, today we're talking about the financial implications of de facto relationships. Why do you think we need to be talking more openly about this topic in a financial context? Because at the end of the day, G, de facto actually here in Australia nowadays has exactly the same rights that a married couple would have,

bar literally the name. So I think it's really, really important to have this conversation because, unfortunately, you could be accidentally de facto. Like, that would be a really good podcast series. Like, accidentally de facto, and it's talking about all these boys who were, like, not wanting to come in, but then you were living with them for, like, three years, and you're like, hashtag accidentally de facto. Yeah, I love the accent de facto.

What? I don't know. You tried. You tried. Thank you. But at the end of the day, if you're legally married or you're in a registered relationship, which is where you've literally gone and registered the relationship

with the Registry of Births, Deaths and Marriages, which did you know you could do that? Bet you didn't know you could do that. Absolutely not. No, you can register your relationship. But you could actually just be accidentally de facto and living with a partner and you just didn't know that that's how you were categorised until you break up

and you realise, oh, my gosh, I was de facto and I have these rights or vice versa. They come for you for something you owe. And you're like, no, we were never de facto, but legally you were. So it can be a little bit scary. and being in a de facto relationship actually just means that you're in a relationship that is legally binding. That's a scary word when you make it that serious, hey?

I would say so. So, G, a de facto relationship is also legally binding in the event of a breakup, which is why we're talking about it today. And this means that you essentially have legal entitlements and rights if your relationship ends. So, we are here, surprise, to talk to you today about what that means, how that works, owning assets, getting rid of assets, getting rid of a partner if you don't want them and how to protect yourself because from my perspective that is the most important thing you can do for yourself financially. Is de facto in quotation marks the same in each state or do we have different definitions all over the shop?

Yes sir but the family law that actually governs de facto relationships are slightly different in WA so I do apologize for all my friends over there. As always you guys know that everything we say on this podcast is general advice and if you're in this sticky situation you need to get advice, but essentially the biggest difference is around superannuation and being able to split that up. And in every state and territory, except for WA, you are able to request half your partner super, whereas in WA it's actually protected. So say you were married for like 30 years and then you go, you know what, we're going our separate ways, but you were a homemaker for that entire period of time. And your partner was like, I don't know, FIFO and making bank and, you know,

has this epic super balance that is more than enough to set you both up for life and for retirement, you're actually not entitled to that. Wild, right? Hang on, hang on. Was that WA or every other state? WA. Oh. Just Western Australia. Interesting call. So every other state is up to date on it except for Western Australia. I mean, there's a case for that because some people would be like, my super. Yeah, it's mine, et cetera, et cetera. But if you really want to get into the conversation about sacrifice, relationships are not all about financial contributions. It's about sacrifice and it's about equity. Exactly. Financial equity and equity isn't just financial. And we did an entire podcast on this because I am wildly passionate about making sure that women

in particular know their rights and also know what they're giving up. And this is why I'm so passionate about talking to your partner about, well, are you going to contribute to my super while I'm on mat leave? Because at the moment, mat leave doesn't include superannuation. So you're taking a step back, so your family can take a step forward, but you're taking a step back financially, when shouldn't that be a burden that both parties in the relationship carry? 100%. So before we get into the thick of things, let's start by defining what de facto means. What types of de facto relationships exist for you, Dee? In case you're accidentally de facto, G. Correctamonto. So a de facto relationship is when two people who are probably in love,

but they don't have to be, but they're not married, they live together or they live together as a couple on a genuine domestic basis. As the definition is quite broad and when there is actually a dispute over property assets or partner support, it goes to court. The court is actually going to look at a few things and I think that's worthy of bringing up right here. So they'll look at one of three things. Firstly, that the couple was in a de facto relationship for at least two years or, gee, a child was born during their de facto relationship. They will also look at the couple having lived at least a third of their de facto relationship together in Australia, other than in Western Australia. Again, they have a few different rules and regulations

and the couple separated after the 1st of March 2009. Okay, new rules. Weird flex, but okay, family court. So just to be really clear here, we're not talking housemates. There has to be some kind of romantic entanglement. Yes. Commitment. Yes. And usually that's a sexual relationship. So there's a few things that they'll consider. They'll consider how long the relationship lasted. If you two live together and for how long, you know, they might look at it and be like, mate, you had separate bedrooms. You didn't have sex. You had separate, you know, lease agreements, et cetera, et cetera. You were basically housemates. So you're not going to fall into this trap with your housemate. Don't get too scared. They will look at whether you were

financially dependent on each other and any other types of arrangements you might've had between the two of you for financial support. They might look at property and see how it was owned and also how it was used and how you came to own it. So they might go, all right, well, gee, that came from an inheritance or gee, you owned that way before meeting them or gee, that person let you save while you lived together by them paying more rent so you could save for a property. So there are lots of different factors in the property ownership side of things. They will look at whether you had, quote, a commitment to a shared life together. They'll look at how you cared and supported for any children that you had. And they'll also look at how other people saw your

relationship. Spassy. How do they do that? So they actually might audit your social media. They can go through, they can get photos of you together. In situations I've seen where people are applying for like residency here in Australia I know they've been asked to prove their relationships because it's actually not uncommon for people to apply as like oh I'm her wife please let me into the country and they're like prove it so they might ask for pages and pages and pages of whatsapp messages or they might ask for photos of you together or anniversary photos and most legitimate relationships G have some kind of photographic or paper trail like there's stuff you've done together. It might have been a webjet.com.au booking where you're both just

flying to Tassie together, but that was like a trip you did together as a couple. So it could be small, but they might actually go, hey, how'd your friends and family see that? Can we interview them? Because that happens. So Bea, we have skipped straight to the messy breakup here, but so she does. Imagine the family court being like, hey, Georgia King, could you please come in and tell us how you saw Victoria and Stephen's relationship? Oh, I would have glowing things to say. Thank you. But you would tell them that we were in fact in a relationship, right? Or would I? Oh, I don't know what you would say. Maybe you'd be like, but I was in the relationship. Hello, it's me. Exactly. What I wanted to talk about here, V, is something we talk about all the time

at Shoes on the Money. And that's how integral it is to have open and honest conversations with our partner. Absolutely. Especially if we are in this de facto situation, this accidental de facto situation. De facto. Exactly right. I'm bringing it. I'm getting on board with it. I'm not mad. So tell me more about why it's so important in this context. It's so important because you could be compromised. At the end of the day, we need to be very clear about who owns what and when and where. And I know that it's not a conversation you want to have. Like no one wants to fall deeply in love and then have things questioned.

Like no one expects to, you know, spend arguably, what's the average? I think it's $36,000 here in Australia is the average cost of a wedding. You don't spend that amount of money going, do you know what? I'm going to get married to G King. spend my 36 grand and divorce her three years later that is never the intention so that's the thing that makes people feel a bit icky when they want to go oh hey gee so you know if we broke up what would this mean like that should always be a conversation that you have and I know it probably sounds like a bit too much but it should be exactly how we approach conversations regardless

of whether it's financial or not if you're making a big life decision I think that we should be having open, honest conversations with your partner. And I probably take this a step too far because when I got my cat, I was like, hey, cool. So you see this cat? That's mine if we break up. And Steve was like, oh, okay, you can have any way. I'm not going anywhere. And I was like, great, no problems. Same thing happened with the dog. I was like, I'm going to get this dog. And if things don't work out between the two of us, I'm just letting you know that that is something that is mine. Let's agree to it now. I'm sure he'd argue with me now because it's very easy to say, no, that's absolutely fine. Victoria before he was in love with the puppy. But I think

it's so important to have these conversations. And it's not to say that we can't revisit that conversation and renegotiate those terms, but we need to be having those conversations about everything financial, because if you're coming to the relationship with a house or you're coming to the relationship with, I don't know, G, you're a little snazzy saver. What if you got in this brand new relationship and the partner that you got was just not good at saving and your plan was to purchase a home. Is that then their home or is that your home? Have you had that conversation? And if not, I would be having that conversation because it's really unfair for them to then assume, well, I thought we were doing it together. And in court, that's what they'll say.

Yeah. They'll go, oh, but like, G and I were in such a loving relationship and, you know, we never talked about it because everything we did, we did together because we were so in love. So we bought this house together because to them, you brought the money to the table, but they were so invested on that journey. and I think you really need to draw the line regardless of how icky that can feel because it can actually be really liberating. And I think that a lot of people are viewing this from the lens of, oh, that's so yuck. Like, I don't want to have this conversation to my partner. But nobody ever gets in a relationship with the intention of breaking up. Nobody ever gets in a relationship

with the intention of losing an asset they worked their life for. No one intends to, you know, have these really bad outcomes. But do you know what's really empowering? Knowing every single day what I owe, what I earn, what I spend and what I own. And knowing that the relationship I'm in, I'm choosing to be in, not I'm so confused financially about what would happen if I, well, if I asked Steve for a breakup, like what would he take? What would I take? Like, I always knew where I'm standing and I always know exactly what I can take from that relationship. and I think everybody else should too. In terms of cementing this though Bea because I'm sure people would have conversations in the early days of their relationship you've said

you shotgun Henry. I do. Should the worst happen. You can have the house you can have the car I just want the pets. Do you have that in writing though because surely Steve could dispute that if it wasn't written down there's no evidence of it. He could absolutely dispute that I'm more referencing that because I'm like it's important to have these conversations so that you're always on the same page, but we did an episode on binding financial agreements not that long ago. And if you're interested in having that conversation, definitely do it. TLDR, I do have a binding financial agreement with my partner because it was really important to me. Like I can't just talk the talk. I've got to walk the walk. 100%. Okay. Very interesting. I'm going to put a little peg in

the chat. A peg in the chat. Peg it right here. And then on the other side of the break, we will be getting into the nitty gritty of different kinds of scenarios. So please don't go anywhere, guys. All right, Evie, let's dive into a few situations here about how my relationship is going to affect or be affected in certain situations. Genius. Are we going to do some role play again? Well, maybe. I don't know how things will go. We'll see. That's a good part of relationships. Moving on. Saucy. Let's start with Centrelink. Gee, I can't stop laughing. But if you are a member of a couple then it can actually affect what payments you get and your payment rate which is why during university you probably had a lot of conversations about people

being like Centrelink thinks I'm single and I say that because I feel like every second friend I had at uni was single and living with their housemate and sharing a quote room because it made the most financial sense to them and I guess that's usually our very first experience of what de facto looks like and how it impacts us and how that can actually drag us down in a way. Because if we are de facto, our joint income is taken into consideration. And sometimes that means that you don't get access to benefits when really you should be getting access to benefits because the de facto relationship you're in is maybe new or maybe you're just both really young and you don't want to be financially dependent on one another because situations are so different. I'm absolutely

not advocating for lying to Centrelink. I don't think anyone should do it, but it would be a miss of me to not recognize that a lot of people do, I guess, quote, game the system because it makes sense for them. Definitely not saying we should do that. Moving on from that, G, Centrelink generally consider you a couple if you are one of the following, quote, you have a partner, are married in a registered relationship, or you are de facto. You don't even necessarily need to be living together for Centrelink to actually consider you a couple, which sucks, but you might need to let Centrelink know of your relationship status to make sure everything is hunky-dory. So I won't go over it too much, G, but many of the ways Centrelink considers whether you're in a de facto

relationship or not is exactly the same way that the family courts would do that. And we described that in the first half of the episode, but there are a few different rules. So first different rule is if you are 21 or younger and getting the ABS study living allowance or youth allowance as a student, or you are getting the Australian apprentice payment, or you are 21 and younger and getting youth allowance as a job seeker, or you are 21 and getting a disability support pension. So all of those things are treated a little bit differently, but important to understand that it really does affect your payments, which as I said before, can be a little bit of a kick in the guts if you're at uni and you're studying and you just really need the cash to get by.

Interesting. You said that even if you're not living together, it can impact your finances as well. Well, absolutely. Because remember how we said, if you're financially dependent on one another or you're in a sexual relationship or you're romantically involved, you don't necessarily have to live with a person to think that they're your one and only, do you? Let's move on to assets here, V. Say you and I get married. I should be so lucky. I should be so lucky. Harper, move over. What would you say the difference is between a pre-marital asset and a combined asset? I feel like they're a little bit straightforward. Premarital, pre-marriage, pre-relationship. So premarital assets are properties or assets that were bought by a party before they got into

the marriage or before they got into a de facto relationship. That asset might be in the form of real estate or shares or bank deposits or any type of financial assets. And then combined assets are classified as property owned by you and your partner. So that doesn't necessarily mean that a premarital asset can't become a joint asset, depending on the conversations or the situation that you're in. That either means that you own something directly with your partner or you come to acquire something while in that relationship in your individual name, which then goes into what's known as a G, are you ready for this? A matrimonial asset pool. Oh, fun, fun pool. Fun pool, let's go swimming. But these can include things like the family home you buy,

any other real estate you might buy, cash, cars, other vehicles, investments, and super entitlements, but not in Western Australia. And these things aren't limited to just the big things. They could also be household items like your fancy smeg toaster. It could be jewelry. It could be your tradie boyfriend's tools. It could be the value of a business that you create in a relationship, which is one of the reasons why I was a staunch advocate of a binding financial agreement before I got into a relationship being a bit personal now, G, because from my perspective, I was like, wow, I think I'm, you know, onto something here. I'm obsessed with she's on the money. I don't think I'm a half bad financial advisor. I think that Zella and she's on the money over the next

10, 20, 30, hopefully 50 years will continue to grow. And I'm not naive. Like it's not as though I a hundred percent get all of that if Steve and I break up, because I do genuinely believe he puts a lot into our relationship to enable me to grow those things. But I want to own those things at the end of the day. I don't want him to be my business partner. I don't want half the shares to go straight to Steve and I end up being in business with my ex-husband. Like that would suck. But we really needed to define that. So it could be everything. And don't forget debt either, G, because it could be anything. It could be a personal loan that you two get together to go on a fancy holiday that you both were like super pumped to go on. Or it could be that one party in

the relationship has a gambling addiction and didn't tell anyone and got a personal loan and it all just racked up from there. And they've got a couple of credit cards that you didn't know about. It could be a shopping addiction. It could be literally anything. But if it was made during the relationship, it's very likely to be seen as a joint debt, which sucks and gets me really on my high horse when we're talking about abusive relationships. Because as we've seen on Money Diaries historically, there have been a number of women, and I'm sure it happens to men as well, but on the She's On The Money podcast we've only ever had conversations with women about this but women who have been left with massive debts because of their partners and have had to pay it

off because they were in the relationship and that sucks and I think that there should be more rules and regulations around that because it is honestly absolute junk but I think it's really important to talk about because if you created something in your relationship that's not a premarital asset. Just because G did it while she was married to V doesn't mean that V didn't, again, put any equity into that asset. Right. Yeah. Okay. Well, on that note then, let's talk about how we can protect ourselves and our assets in these situations, V. Have good conversations. Oh, this is a really hard one to say because, again, making this quite personal because the easiest way to describe things is for me to go, hey, here's the situation

and the situation I know best happens to be my own. But relationships sometimes pop up out of nowhere. I totally get that. Steve and I met and then I think we decided that that was it two weeks after we met. And that's very nice and very exciting, but that doesn't leave a lot of wiggle room to have those big conversations. So they came later down the track and thankfully I was in a relationship with someone who was really supportive and really understanding. But I think we need to be quite wary of relationships. I don't want to scare people. I don't want people to be like, Vicky, you're right. I'm never getting back on the dating apps. I promise you can find someone good on there, found Steve on there. So, you know, that's one person who's had a very solid

experience. But having conversations early and having chats with your accountant or people who are in your sphere of, I guess, influence to make sure that they know what's up. Like if you're buying a house and, you know, as we used that example before, G wants to buy a house, but she gets into a relationship. Start talking about that early. Don't go on the house hunting journey with your partner and go, oh my God, what about this one, babe? Rah, rah. Get them so invested to then turn around and be like, oh, you know, this isn't going to be your house, right? Like I'm the one with all the money. So obviously that's not going to be yours. I think you need to make sure that there are really clear boundaries from the beginning. Okay. Hey, IMG, I'm going to be

buying a house. Partner, are you okay with that? Understanding their financial situation and the journey they're on and making sure that they're complimentary to one another. Because you might desperately want to own a home, but your partner might go, please wait for me. And then you make a decision together to wait for them to save their part of the deposit. Or they might go, oh, I don't mind. Go buy your own house. That's totally okay. Document it. I think people really underestimate the, I guess, value in just documenting things as well. I sound so creepy, like I'm trying to keep receipts on people. It's a paper trail. It's very important. Pay-per-trail is really important. And regardless of whether you have a binding financial agreement

or not, you can rely on past communications. So if you have been in a situation where you've had that conversation, you can just shoot them a quick email and be like, hey, just wrapping our conversation. I'm going to be buying a house. It's going to be in my name. You aren't going to be financially responsible for the mortgage. That means you're not going to be financially, you know, able to, you know, take half of it if we should ever break up. And I know that that's not very sexy, but I promise being protected is. You need to be thinking with your head, not your heart, right? And they're conflicting. They don't want the same things. No. They don't. No. They don't. They never have. So let's move on from that. All right,

let's talk home loans. I have two scenarios for you. The first, you and I are in a relationship. I'm really pushing this. I'm picking up what you are putting down. We're applying for a loan together. Yes. And we're going to be co-contributing to the mortgage. Oof, very nice. How does our relationship impact that scenario? Okay, so hot take from me is that both of our financial circumstances are going to be taken into consideration in that circumstance. That could be, gee, my shopping addiction that I have and I spend a lot on shoes and that could stop you who's really good at budgeting and cash flow from being able to access as much money as you might want or even being able to get a loan in

the first place. So you really need to make sure if you're going to get a loan with your partner, you're not just, you know, on the same page about the outcome, but you need to be on the same page about your journey. And I always recommend to my clients to start that journey six months before your purchasing. And I say that because that puts you in the prime position to get your budgeting and cash flow sorted out, have a few tricky conversations, maybe improve a credit score, get rid of buy now, pay later's that you might want to get rid of. It enables you to pay down some credit cards if you've got them and get on the right page. It also enables you to put yourself in a position where you are paying into a savings account exactly what you think that

mortgage repayment might be each and every single month. So you can start getting into the motions of quote, paying the mortgage, because too many times do I see people in our community biting off more than they can chew. Because if you go to a broker, they're going to go, all right, GMV, we're so excited to buy your first marital home and this is how much you can spend up to. And too many people take that spend up to amount as gospel and they go, oh, they said we can borrow a million dollars, G. We should spend a million dollars. But that might not actually be the smartest thing for your cash flow because what that is saying is with your current financial situation, you have that money at your disposal so you can pay that mortgage. But what it actually might mean is

you're on rice and noodles and you're not able to go on any holidays. And yes, with your current financial situation, you've been sacrificing for a really long time to get that home deposit together, which means you might not have done any of those things. You might not have eaten out and you're kind of waiting until you get to the point where you're like, great, gee, we've got this mortgage. Now we're going to pay the minimum repayments and we're going to go and we're going to go out for dinners and we can get back to having holidays now we've got the house but your mortgage repayments might actually be so much that you can't do that right so you need to look at how much those mortgage repayments are going to impact your lifestyle and a good way of doing that is six

months before getting a mortgage starting to save that amount even if that is you know more than what you think you'll spend I think it gives you a really good indication of what you could or couldn't do. Does that make sense? Yeah, especially as a duo to kind of pick up on what the other is doing. It always looks really good to a bank if you go, hey, look, we've been actually saving that amount because rent isn't taken into consideration, which is a joke. But we've been saving the amount that the mortgage is going to be for the last six months. Aren't we responsible humans who should be given a home loan? Stunning. Let's move on to scenario two. Yes, sir. You and I are in a relationship. Nice. Just think about it. But you keep making me think about it and everybody else

listening. But here's the twist. Yeah? I'm the baller. You are the baller. You're just my little girlfriend. Anyway. I'm just your little girlfriend. Yeah, well. I'm going to be. Way to make me feel menial. I'm going to be applying for a home loan all on my own. I don't like this power dynamic. I'm doing it all by myself. And I feel underrepresented. You're not contributing at all. But you might pay some rent in the future. I don't know. What about my equity? I'll decide later. What about the cleaning I do? Well. What about the emotional support I give you? Talk to me about that? What happens in that situation? So that's a really hard situation because if you're in a de facto relationship, your partner's spending and your partner's income is still going to be

taken into consideration. And I think it is an absolute joke. Even if you are a hundred percent financially independent, saying you are in a position where you have a partner is going to mean that the banks are going to want to know what position your partner is in because the banks are going to assume, and I know that this sounds really unfair, but there's good reason to their rhyme. What if your partner lost their job, G? If I went out and I got fired, you would then, hopefully, as my partner go, don't worry, V, I've got us. So the bank needs to take that situation into consideration. Whether I've been made redundant or lose my job or get ill or injured or something happens, that is a risk that the bank is taking into consideration. So pragmatically,

I completely understand it. But I have a friend going through that exact situation at the moment and the amount that they're able to borrow is like, I think, $80,000 less than what it would be if they had applied as a single person with no de facto relationship. Really? Yeah, it's a joke. Interesting. And I say it's a joke because they obviously think it's really unfair and I think it's really unfair and it's putting them in a position where they can't buy what they want to buy, but they can afford it and they're completely financially independent of their partner. But because they've lived together and they are de facto and they're doing the right thing and telling the broker that there's, you know, not much you can do. Apologies if you've already answered this,

but what if, I'm just thinking of a mate of mine, what if you've been with someone for three years? Yeah. You've lived together for two in a house that they own. Yeah. Then you break up suddenly. Yeah. What is my friend entitled to from a financial position? So it completely depends on the situation, how much they lent on each other financially, whether they were thinking that they were contributing to that mortgage or not, whether they were, you know, very clear from the get-go. Like I've got a mate who bought a property in Richmond and she turned around and was like, all right, if you're my boyfriend and you're moving in, you're paying rent, here's your rental agreement and made it crystal clear that they were never contributing to the mortgage.

so in that situation it's a little bit clearer but as a base if you know the proverbial hit the fan and they ended up in family court the family court actually starts at a 50 50 basis and then goes back and forth from there interesting it's terrifying right yeah it is it is it's scary and i think that's why we should be having these open honest conversations when we're both in our right mind. Like, gee, we are so deeply in love with one another, which is why we should be talking today about, well, gee, what happens if, you know, we break up? Because right now I am going to assume that you want the best for me and I want the best for you. So let's document that outcome. And even if we break up, I don't want to have that conversation with you when I've worked out

that you've cheated on me with Jess. But let's just go back to the document that we drew up where we both wanted the best for each other and rely on that regardless of the situation that's making us really bitter at that point in time. So that could be a BFA or it could be a rental agreement. Yes. And even if you don't want to go and get a BFA, which I obviously very, very much endorse, so that's a binding financial agreement, even writing it out and going, all right, gee, let's just write out our own binding financial agreement because we can't afford the lawyers, we can't afford to go and have it set up. Let's just find a template online. I do genuinely believe that that is better than nothing. Like if you can't afford the actual document, I totally

understand that. It is an investment and I hope it's an investment that doesn't pay off itself, right? Like, and I say that kindly because I don't want you to have to break up. I don't want you to have to lean on that, but it would be an investment in peace of mind. But if you can't afford that, that's okay. Let's just draw up what we have. And in the future, we can take that to a lawyer and get that drawn up when we're more financially stable. Let's move on now, Vee, and talk about super. Oh, a sexy topic. Is that safe? My favorite tax structure. Your fake, I know. Of all the tax structures, super's my favorite. Say again, it's you and I, we split up, we're in a de facto relationship and it ends. How does super come into the fold if it's something that we can't

access for another 50 years. So, it can be taken into consideration when the family courts come to play. So, it is not safe and locked away from your partner, sadly. So, after separation, superannuation is treated as property. It's essentially a property under the Family Law Act. However, as we said before, that's very different in WA. So, please, please, please, wherever you are, if you're going through this, get advice. But it is different from other types of property because that asset is being held in trust. So as I mentioned before, superannuation is my favorite tax structure. Superannuation is not an investment, but when you put your money into that tax structure, you then therefore invest that money. And that is the asset that the family court looks

at and goes, all right, well, we probably should divide it. And again, the family court usually starts with a 50-50 basis and then like bats back and forth from there, which I think is a fair starting point, but not everybody sees it that way. So as I said before, G, the laws to splitting superannuation applies to everybody except for our friends in WA who aren't actually eligible to split superannuation, which I think is a joke. Like, honestly, can you imagine in 2022, a woman not being able to access or anybody for that matter, not being able to access the superannuation of their partner that they supported all the way through their career? Does seem like a pretty outdated, archaic way of doing things.

It just seems a bit wild. And I know that a lot of people listening to this are going to be like, V, I'm in my 20s, like my partner has not much superpower. So like, I don't care about it. They're not the people that I'm worried about. I'm worried about the women who are currently experiencing massive amounts of disadvantage and knowing the current statistics that say the biggest growing demographic of people experiencing homelessness is women over the age of 55. And I genuinely believe that this discrepancy and this, I guess, power imbalance has a lot to say. And then the fact that these women who are going through a divorce, who are experiencing homelessness, are not able to access superannuation. No, no, sir. To me, that's wild.

So I get it if you're 20 and you're like, that doesn't worry me. I broke up with him. Good riddance. I don't want his super. I get that. But there are a lot of people who are significantly disadvantaged by that. Let's talk now, V, about trusts. Surely they're owned by the individual and aren't going to be split. Oh my God, no. No, everything is fair game. I think it's a very, is outdated the right word here? I don't think it is. It's a very American view to think you can hide assets from your partner. You know how in American TV shows, they're like, oh my God, put it in a trust and she won't be able to access it. Or like right before in American TV, right before they ask their wife for a divorce. They hide all their shit. Or the wife finds out that

the husband's cheating and she's like, oh my God, I'm going to go see a lawyer before he figures it out. I'm going to move this and this. That doesn't happen in Australia. In Australia, it is completely transparent. You can't hide anything from the family courts, which I think is very, very important and is another reason why our system is better than America's. But as I said, massive misconception that assets that are owned in, quote, a discretionary trust will not form part of the property pool available for division between the spouses. As I said before, the starting point is always 50-50 and then they go back and forth from there. It's also super common for separated spouses or separated partners to argue about whether a trust forms part of the property pool

because they think that that's a protected asset. They're like, no, that's a trust, that's mine, and rah, rah, rah, because they see it as a resource that is ultimately entirely theirs when that's just not the case. But again, this all completely depends on the nature of the spouse's interest and their degree of control over the trust and how all of that works. But no, there's always, always, always visibility in these things. Even if, like, let's say that you and I, we were, do you know what we're going to become? We're going to become property investing moguls, G. and what we do is we go and establish a trust because we're like genius a trust to keep all our properties that sounds genius but you're the director and you're the person who set it up and

somehow I just got completely missed that doesn't mean I'm going to miss out because you had to put that asset on the table so you can't screw me over it is harder because obviously if it's 100% in your name there's probably a lot of hurdles that would have to go over in the legal system But at the end of the day, thankfully, we live in a world where everything is transparent. So V, are we out of the woods if you and I break up? Like what if we have a BFA? Are we sorted? What's the deal?

Who knows? Maybe. Did you cheat on me? I don't know how savage I'm going to be about this breakup. Was it mutual? Did I ask for it? You don't know? No, it's good.

Okay, no, you did. I did. I did cheat. What? You cheated. No, I didn't. Oh, you didn't? I wouldn't do that to you.

Well, you never know though. You never know. Oh, my gosh. I've just been watching a new Netflix series where the guy, I can't even remember what it's called, but the guy cheats on his wife and he's in politics. The Anatomy of a Scandal? Yes.

Oh, my God. I just finished it. I started watching it in the bath last night. Oh, my God. It's absolute trash. Yeah, it is. I was very unhappy with how that ended. But that's a very interesting plug, Anatomy of a Scandal,

on I think it's Netflix. Check it out. It's awful. Netflix? Yeah. Do you know what? It's very easy to waste time. Yeah.

And it was kind of pervy as well because like. And Sienna Miller's in it. Who doesn't love her? she's hot. So at the end of the day, G, if you do actually have a binding financial agreement that has been prepared by a lawyer, not just one that you've downloaded and put in your emails for a paper trail, which I said, I think is a very good option. If you can't afford a binding financial agreement, that would be able to sort out your property and maintenance according to that agreement. The next best thing is, you know, having that paper trail because G, as we always say,

it doesn't matter if you can afford it or not. There's always another option that you can pursue. I think it's really naive of us to go, oh, gee, we can't afford a binding financial agreement, so therefore we're just not going to do it. I think that that is really detrimental and let's just do the next best thing. But at the end of the day, I need to be brutally honest and if everything goes south and you and I are fighting like cat and dog and I now want the worst for you and you want the worst for me, a binding financial agreement can be challenged. In Australia, unfortunately, it is not like a prenup, which usually can't be challenged in the US. But in Australia, you can challenge them. It obviously would involve court fees and actually

being quite dramatic about it. But sometimes people believe it is worth it and that is okay, each to their own. And I think that if you think that your binding financial agreement that you set up at the start of a relationship is no longer putting everybody in the best possible position, then yes, I do think you should challenge it. But not just to be bitter about it, but that's just my own personal take. But at the end of the day, I just think that having as many things documented as possible is the key to success. Okay, V, my last question, maybe it's a dark one, so shoot me. You are really dark this week, though. I am, I am. So we're in a de facto relationship. Sadly, one of us passes away. What is the other partner? You're trying to kill me off,

aren't you? Well, maybe. You're trying. But essentially, you have the same rights as a married person nowadays, which is very cool because for a very long time, if you were just the boyfriend of a partner for the last 30 years, you weren't entitled to the same rights as a married person because historically you might not have been able to marry your partner. So nowadays you are entitled to exactly the same rights. And I think that that is perfect. And this includes rights and entitlements that regard the following. Gee, I've listed them out to make them super speedy at the end. Number one, a share of an estate where no will exists. That is, and we discussed this on the episode with Lucy about wills and estate planning. So go and find that.

Your partner dies intestate. That means they have no will and no estate plan. Number two, I've written down the right to challenge a will if you're not adequately provided for. So for example, if your partner wrote a will ages ago, didn't think about it, got in this de facto relationship, you and your partner are five years into a relationship, you have a two and a three year old life's pretty hectic and their will says that 100% of their assets go to their parents you can absolutely say probably not though because I have two small children to provide for or maybe you're a stay-at-home girlfriend or a stay-at-home boyfriend or they are significantly financially responsible for you or number three receive compensation entitlements under workers

compensation law if your partner dies during the course of employment and number four you will be able to claim their social security entitlements. Okay. That's a very dark place to leave it. It is a little bit. Very important. If you haven't listened to our Binding Financial Agreement episode, go and listen to that. If you haven't listened to our Wills and Estate Planning episode with our friend Lucy Percy from Head & Heart Estate Planning, who is an absolute delight, go and listen to that because there is so much information in that that is going to put you in the best possible position, which is all I want. Perfect. All right. So moral of the story, you're probably entitled to more than you think in a de facto relationship.

Absolutely. It's important we use our head and not our heart, though it can be hard. Yeah, it can be hard. That's very moving, G. And finally, it's really, really important to keep a paper trail along the journey. Absolutely. Because I don't want people to think that I'm super entitled recommending a binding financial agreement because then you're like, great, V, I want to set one up. And I'm like, okay, cool. It's going to be more than a thousand dollars. And you're like, well, I don't have more than a thousand dollars, but I still want to be protected in my relationship.

and the family courts are going to look really, I guess, fondly on that and go, okay, cool. Here's all this evidence. Let's sort it out. Let's actually look at this and a paper trail, regardless of what you're going through, whether that is a relationship, an argument, an employment situation, like paper trails are just important. And if you don't use them, great. They're just sitting in your inbox. Exactly. No harm done, my friend. Perfection fee. I think that's all we have time for. Why don't we wrap the boring stuff? Let's do it. Go. The advice shared on She's on the Money is general in nature and does not consider your individual circumstances. She's on the Money exists purely for educational purposes and should not be relied upon to make

an investment or a financial decision. No, sir. And we promise Victoria Devine is an authorised representative of In Focus Securities Australia, Proprietary Limited, ABN 47097797049, AFSL 236523. And as always, we would love it if you joined our Facebook group where our community shares money, tips and tricks every single day of the week. Just search She's On The Money on Facebook and please join us. If Facebook's not your thing, you can also find us on Instagram and embarrassingly enough on TikTok at She's On The Money A-U-S. And as always, don't forget to rate, review, subscribe. Give us a little review. George has been thriving on the reviews lately.

We had like three good ones and I was so excited. All we need. Don't leave fab ones, it makes G cry. Bye.