In the current climate, if no agreement is reached early on, due to current delays in the Family Court, there is currently an average 2 to 3 year period until parties are listed for a Trial. As such, it is not uncommon for parties to repartner or remarry before their financial affairs with their ex de facto partner or spouse have been completed.
This article explores the impact that embarking on a new relationship following separation with your ex de facto partner or spouse can have on your family law financial matters.
What if the new de facto partner or spouse begins intermingling their financial affairs?
The assets, liabilities, and financial resources of the parties are assessed at the time either agreement is reached or at the time orders are made on a final basis at a final Trial and not at the time the parties separated.
This means that if a party enters into a new de facto relationship or remarries, and they jointly acquire property with that person e.g. they buy a property together, or share joint accounts, or purchase other joint assets, these assets will form part of the property pool available for division and can be the subject of an application of property settlement by an ex-partner.
This is why proper consideration should always be given to whether a property settlement has been finalised to ensure the protection of assets acquired post separation with a new de facto partner or spouse. Failure to finalise matters can result in property acquired post separation being the subject of an application of property settlement by an ex partner or spouse.
The new partner/spouse may also have to provide disclosure of their income, expenses, and assets.
What impact can entering a new de facto relationship or marriage have on an application for de-facto/spousal maintenance, or the discharge/reduction of same?
Maintenance applications turn on one partner's inability to meet their own needs and the other partner's capacity to pay.
When determining the extent of support a former partner or spouse should receive, if any, one of the matters the Court considers is the financial circumstances relating to the party's cohabitation with another person.
For example, when considering a spousal maintenance application, the Court has previously determined it to be:
"quite inappropriate for a wife to live in a de facto relationship with another person, who contributes nothing to that household although able to do so, and still expect the husband to pay maintenance for her and that household".
The mere fact a person has entered into a new relationship is not in itself sufficient to discharge an order requiring one person to pay maintenance.
Ultimately, the Court employs a high degree of discretion when considering the impact a party cohabitating with another person has on that party's financial circumstances. The term "financial circumstances" is not confined to the actual financial arrangements. It may also include financial arrangements which would be appropriate in the circumstances, as the Court is entitled to take parties economic potential into consideration.
It is however, of note that the Act provides that an order with respect to the maintenance of a party to a marriage ceases to have effect upon the remarriage of the party unless in special circumstances.
Matters to consider once a party's financial proceedings are finalised with their former spouse or partner
If a party decides to commence a new de facto relationship or marriage after finalising matters with a former partner, consideration should be given to preparing a financial agreement (often referred to as a "prenup") with that partner/spouse. Financial agreements provide future financial certainty to couples and assist in avoiding the stress of engaging in a contested property settlement matter again, in the unfortunate event of the new relationship breaking down in the future.
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Family law matters can be difficult and complex. If you require any assistance with a family law dispute, always contact a legal practitioner who will be able to help.
O'Sullivan Davies has practitioners experienced in dealing with all family law issues, including the issues set out above where parties repartner or remarry while a property settlement is still pending. More information about our services can be found at our About Us page here.
This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.