Protecting My Assets in New Relationship

In a new relationship, my partner is renting a couple of rooms from me but we sleep in the same bed. I have a rent agreement with her and bills are 50:50.
I have a fair amount of assets, plus am doing well on my mortgage.
Currently we have seperate bank accounts and pay our own way (no one Person pays for everything, we half grocery bills or if we go out).
I’m five years from paying off my home and want to protect the considerable amount of money I’ve put into it over the years.

Is a rental agreement enough to prevent my partner asking for half my stuff if things go south? Currently she doesn’t work and lives week to week. I work full time on good money for what I do.
I’m in it for the long haul with my partner but if something goes wrong I want to protect my assets.

Comments

  • +22 votes

    It's not strictly a 2 year rule for Defacto and being able to take your assets either. The law is basically written so that if you let someone regularly stay at your house and you are intimate with them, then they can potentially claim up to half of everything you've ever worked for.
    You can get a 'prenup' written up and signed by 2 separate lawyers, but even these are not water tight.
    So you have to either…
    1. Be intimate, but don't let them stay at your house overnight
    2. Let them stay with you over night, but don't be intimate
    3. Find someone with more assets than you.

    Also, don't have an intimate relationship with someone from overseas and let them they stay with you, no matter what assets they have. Australian law will let them take your assets but you won't be able claim any of theirs.

    Oh, and if you treat your partner to a good lifestyle and they get used to it, you may have to continue paying to support that same lifestyle they've become accustomed to after they leave you for someone else (and take half your assets).

    Oh, also, if your partner is not working and cannot afford a lawyer to take you to court and claim your assets, you might have to pay for their lawyer too, as well as your own of course.

    Seriously, with 70% of marriages ending in divorce and who knows how many relationships ending, why would anyone with any assets bother?

    The good news is, your assets are generally safe if you sleep with a hooker, so there's always that option.

    • +7 votes

      Seriously, who wrote the broken laws?

      • +5 votes

        Simps?

        •  

          no need for that, but yeah it seems to favour one party and mucks the other

    •  

      Seriously … 70% …

    • +1 vote

      This is the best comment I've ever read in years!

    •  

      This is wrong its not half

    •  

      "Also, don't have an intimate relationship with someone from overseas and let them they stay with you, no matter what assets they have. Australian law will let them take your assets but you won't be able claim any of theirs."

      Is this for real? Where are the sources of this? How is this just in any way

      •  

        Why should overseas partners in Australia not fall under Australian law and why would you expect overseas law to somehow give a foreigner a local's assets?

        •  

          Lol how can you make an accurate assessment if you're not considering both parties assets (for example if the international doesn't declare it, which they probably won't if they're in the situation)? Like what stops every international from abusing the system in this case?

  • +2 votes

    soon she will be pregnant and you will be the one who got screwed. You will pay big time my friend!

    •  

      Which one comes first? The pregnant or the screw (after).

      •  

        First screwed, second more screwed

  • +3 votes

    You are living in a de facto relationship. She can already legally claim half your property. If you don't like that, then you can try to leave, but she can use that as a basis to claim half your wealth. Goodluck!

    Australian governments and courts consider a person to be in a de facto relationship from the time they commence living with another person as a member of a couple.

    "There’s no minimum time period for a relationship to be de facto."

    https://www.servicesaustralia.gov.au/individuals/topics/your...

    Make sure you don't forget to tell the ATO.

    •  

      You are living in a de facto relationship. She may have a claim over some of your property.

      The government's position on what a de facto is compared with how it is defined under the Family Law Act for the purposes of property settlement in a relationship breakdown may be different.

  • +11 votes

    I would have thought you have already screwed the pooch on this one. The fact you are in a relationship and share a bed AND she is paying rent could be looked upon that she is paying part of the mortgage and already has a financial interest in the asset.

  • +36 votes

    More red flags than Tiananmen square.

    •  

      lmfao

  • +4 votes

    Your partner has Stockholm syndrome or gold digger or both.

  •  

    They don't it the lucky country [for some anyway] for no reason!

  • +1 vote

    Worst relationship ever

  • +8 votes

    I confess to skimming the comments but I did not see anything about the legal situation vs how that plays out in a practical situation.

    First the legal. While ATO looks on you as a couple from the moment you start, normally no financial claim on the other would be sustainable with defacto less than 2 years. For defacto, contributions are not necessarily monetary. It could be argued that a non working person stayed at home and looked after the house so the busy worker could focus on earning money. Or accepted less than full emplyment to do so. Even fully subsidising the non working partner does not get the good earner off the hook. Pre-existing assets are supposedly taken into account to some extent, but less weight the longer the period.

    If you simply take the partner shopping for curtains, that could be included as a contribution that the advice given raised the property value. Courts are notoriously unpredictable, and a tale well spun can make a huge difference.

    But turning to the practical, what do you do if you get a claim for $100K or more when you think it should be zero? You have to spend serious dollars in just legal paperwork to respond. You are virtually forced to come to an agreement and settle. If you don't agree on a settlement, you could spend most of that on court costs and still have to pay. Then there is the wait for a court date. And the settlement is based on assets at that date, not date of separation.

    The whole process is evil.

    • +4 votes

      Do you have any advice for a single mid 20s person with lots savings and a good job who ideally doesn't want to be single for life? Seems like all the advice here is to get a BFA but with a big asterix saying it probably won't work anyway lol
      Asking for a friend..

      • +4 votes

        Buy a place, never tell her. May the mortgage. Rent somewhere else together. Life insurance and will in order in case you actually stay together and perhaps have children. Otherwise, pretend you're much poorer than you are, and never mention large existing assets.

        Although not appearing to have assets is a good way to stay single, in my experience. Perhaps not the desired outcome.

        • +5 votes

          Woman like men with assets!

      • +11 votes

        Date people in a similar financial position to yourself is the most simple advice that way when you split it in half you end up where you started.

        • +4 votes

          I think this is good advice. If you are not equally at risk, there is too much incentive for the less asset rich person to want a share. While many relationship breakups end amicably, there are many where one party turns into an ogre. At the start of a relationship, nobody believes this will happen to them. A clue as to what the future may hold is to assess how your partner handles issues with others. There could be warning bells. And once the legal profession becomes involved it becomes an adversarial process.

          I favour a BFA, although it's tough in the early stages to make it clear that you have doubts about the long term viability of the relationship. "You don't trust me?" It may cause the end of the relationship, or be held against you forever.

      • +2 votes

        You can, and should, get a BFA.

        •  

          Seems like all the advice is they aren't really worth the paper?

  • +3 votes

    If you're in it for the long haul with your partner then you have to assume you'll be sharing a decent chunk of your assets if the relationship breaks up.

    I'm not sure a relationship built on the basis of 'I love you, but you're never getting your hands on my stuff' is one that will succeed from the outset.

    Cryptocurrency was tailor made for hiding assets and retrieving them later.

    • +4 votes

      I would have no issue with a woman having this attitude in her relationship with me.

      I don't want her stuff.

      I don't want to rob her, disadvantage her, or be a burden on her in any way.

      Same for friends.

      Same for family now that I am fortunate enough to be able to look out for myself.

      Why would I compromise on this, in offering no more nor less to a partner?

      Genuinely don't understand the idea that if I cohabit with someone for 5 or 10 years they own my freaking PlayStation.

      • +4 votes

        I fully agree with this. If I marry someone then why should I get half the property they purchased a decade ago? It doesn't make any sense.

        There was a time when women couldn't get a mortgage to buy a house if they were single, pre the 1970s. Now they can earn just as much as men, can have as much superannuation, and have no problems getting higher education, yet there's still this weird expectation that when a relationship breaks up it's the man that loses half his stuff. Either it's a problem that needs to be solved or men are overplaying this.

        • +1 vote

          Because it's got to do with being one entity (for wanting for better word).

          Of course you don't get marry with the intention of gaining half of the other partner's asset but if you are down in the dumps, surely you can expect your spouse to help you / support you.

          •  

            @burningrage: No you can't. Unfortunately. Seems not to work that way a large proportion of the time.

        •  

          Before feminism, men and women had different rights.

          After feminism, women have all the rights of men in addition to their previous rights. So they can have their cake and eat it too.

  • +10 votes

    Have you even checked if her star sign is compatible with yours?

  •  

    Nice

    •  

      69

  • +2 votes

    Her paying rent could be seen as contributing to the mortgage so you need to decide now, be honest with her and see if she agrees with your decision. That you need to live apart for now,

  •  

    Obviously get legal advice. What about moving all your assets into a family trust. I'm not 💯 sure sure, but I think that the assets cannot be touched unless your part of that trust. But legal and accounting advice is best.

    • +1 vote

      That "may" work BEFORE you are in said relationship. Trusts can and will still be pooled as part of assets.

  •  

    There is something called Prenup. There is a REASON the prefix "pre" is used. Pre means get her to sign first before the "first" time.
    At the end the only real winners are the lawyers!

    •  

      Prenup doesn’t always work… if she claims she was forced to sign it or she signed it under duress… your prenup is just expensive toilet paper now.

      •  

        correct, the girl in the street is at the end the cheaper solution.

  • +2 votes

    The only way you will protect your assets is to not live together. Simple as that. Prenups are not enforceable. Your "rent" idea is stupid, and is taxable income.

  • +2 votes

    you are already in a defacto

    she already has claim to half your sh!t

    let us know how you go

  • +5 votes

    You could break up every 18months and then go spend six months in SE Asia or South America and father a child with someone else while there, possibly marry them before you leave them.
    Pulling out an OS family complete with wife and child should give you some wiggle room in the courts over the occasional on-again-off-again tenant/girlfriend.

    •  

      Now that's thinking outside the box!

    •  

      Can you elaborate how that actually works in the court?

  • +2 votes

    In a new relationship

    How new?

    renting a couple of rooms from me but we sleep in the same bed.

    This is weird. what does this mean? Why does she rent a couple of rooms? Is she a Madam and runs a brothel?

    Is a rental agreement enough to prevent my partner asking for half my stuff if things go south?

    No.

    Currently she doesn’t work and lives week to week.

    So what's your plan here? Seems like you jumped into a new relationship in what I can only imagine is the last couple of weeks and think you're going to be together forever with someone who lives week to week.

    Based on what you've said about your mortgage and the servicing of it, I'm going to assume you're older, 40s-50s? If your partner is the same then their earning capacity isn't likely to increase as if they were in their teens or 20s, so you have to decide what you want to do.

    Inevitably if you end up with someone as a couple, you share things, your wealth becomes her wealth except for assets protected before hand.

  • +1 vote

    Sounds like what you need is a family trust (even if you are the only stakeholder in it).
    Lawyer should be able to sort that for you for a couple of g.

  •  

    seek legal advice and it looks like you don’t trust your partner fully or judge them too much based on their work arrangements.

  • +5 votes

    I feel sorry for the girl. Sounds like the op doesn't really trust her moral character and is constantly on guard to protect himself. Do her a favour and leave her. Go look for a fwb where there are no commitments because it doesn't sound like you're ready for a real relationship.

    • +1 vote

      OP just wants a root to be around all the time without the obligations. This relationship is dead already and tbh, it’s because of the OP.

      • +1 vote

        it's a 'new' relationship - there's even couples breaking it off after years

        i can understand how he wants to keep what's his, without mindreading abilities

    •  

      fwb

      is that much different to 'tenant w benefit' how is it confirmed?

      or can OP say to her he wants to move to a fwb arrangement

  • +1 vote

    Has it been answered if she was renting the room first, and then they started banging? Sounds like a rookie mistake to me!

  •  

    After 2 years of living with you, She owns 50% of everything you have..

    NO getting around this… no legal agreement in Australia is valid to protect you from this. Doesn't hold up in court. If she's paying it makes things even easier to prove. You can call it rent but its same same…. a few kiss photo's and you done!

    Do not live with someone until you are ok with the above.. END OF STORY

    • +2 votes

      After 2 years of living with you, She owns 50% of everything you have..NO getting around this… no legal agreement in Australia is valid to protect you from this

      Well, there is a way around it. Because this isnt the law and is so far from what the actual law is or how assets are distributed after the break up of a relationship that its ludicrous

      The number of people on this thread who have no idea about how family law works is pretty close to 100%. Memes from 'mens rights' advocates is not research. if people want to actually understand the law then s79 of the Family Law Act is a good place to start

      Which people will very very quickly realise in no way says that assets are split 50/50

      • +3 votes

        I always thought it was like that until an extended family member went through a divorce. Basically, the longer the relationship goes, the bigger is your partner's claim on your asset (of course assuming you earn more). But after year 2, it's not straight away 50% (that's bogus).

        It increases gradually over time. I believe critical mark would be between the 7-10 years of cohabitation period. Anything above 10+ yrs, I think it's pretty much 50%. However, if you have kids, that's it man… I think it's game over to the party who earns more and who didn't get custody of the kid.

  • +1 vote

    Only real way to protect the house is, if you're not living in it, is to transfer it into a trust. You'll pay the legal fees to get the trust set up, and you'll need to pay stamp duty on the transfer to the trust, but the house is then technically no longer your asset so she won't be able to claim against it if things fall apart later on. If you haven't been living in it for a while you might also have a CGT hit (no PPR exemption), but speak to a lawyer before you do any of this.

  •  

    Find another long term partner with same background(income, assest wise)

    Or keep getting along with her, and she end up taking 50 to 70 % of your hard earn money lol

    • +1 vote

      Funny thing about these types of situations is that 'another partner with same financial background' is typically of a similar age range (40-50) or more, and are not the so desired plump 19-30 year old (who happens to live week by week). Win some, lose some situation

  •  

    To save any disputes, couldn't she just pay her half of day-day expenses, and you use your income to pay for the property.

    I know its not financially equal, but then she can't say that the she paid for the assets?

    You may not see the monetary gain everyday, but at least the assets would be safe.

  • +4 votes

    I'm surprised people just take other people's assets. If I was in a relationship and it didn't work out, I'd happily just let them keep whatever was theirs.

    • +4 votes

      You'd be surprised the lengths people will go to… especially if didn't end on mutual terms (which is more often than not)

      • +9 votes

        As I get older, I'm just sad about the world we live in. It seems like anyone hardly has any ethics or morals and money is the only thing that matters.

        • +4 votes

          Ironic post on Ozbargain

    • +2 votes

      It's hard to predict what people will do years in the future if their situation becomes desperate…
      No job…no savings… Family member just died… Your partner just dumped you for a younger model… You are out on the street…. But you have access to $1million of your ex's assets… Watcha gonna do?

    • +3 votes

      People will find a thousand ways to justify taking other peoples stuff - especially when the law is on their side.

      • +3 votes

        Such a sad society. What about honesty and integrity.

        •  

          Those haven't been valued for decades.

          •  

            @Scrooge McDuck: More often than not, everyone views everything as a zero sum game. If you're not winning or in the optimal position then someone else is

        • +1 vote

          Its nature sweetie

          Been dressed up and frowned upon for decades, but at the end of the day, we are no different than any other animal on planet earth

          Ask a Lion where their integrity and honesty is when they are killing others for food or killing their own to be in power of their pride

          We simply have a more advanced system to stop us from doing that

          •  

            @bobolo:

            Been dressed up and frowned upon for decades, but at the end of the day, we are no different than any other animal on planet earth

            See that's where I think you're wrong. People say it's 'human nature' but to me, it's just nature. Human nature is our ability to go against our instincts, to act against self interest for the bigger picture and what we believe is right. Why are we so obsessed with hero movies then? If it was frowned upon, we'd all be watching movies where the main character just uses their power for their own benefit yet we love Spiderman because he's always putting others above himself. Sure we don't have super human powers and we don't need to be putting ourselves in jeopardy to save lives but if we all apply the same sort of mentality to our everyday lives, the world would be a better place.

            Ask a Lion where their integrity and honesty is when they are killing others for food or killing their own to be in power of their pride

            Yeah look, what's the point of developing consciousness if we're just gonna go back to comparing ourselves to animalistic nature? Second part is, a large portion of us are well fed and we'll off unlike animals who have to fend for themselves day in and day out. Yet we still stoop to such low levels. (profanity) off with this 'its nature' bullshit, otherwise we can't blame anyone for anything. If plenty of us can act that way, why can't others?

  • +2 votes

    My family has everything in trusts, literally no one can touch anything including myself.

    Speak to a lawyer, and an accountant.

  • +3 votes

    Avoid living with your girlfriend unless marriage is seriously on the cards.

    If marriage is seriously on the cards, then think to yourself about the timeline. When you want to get engaged and married, have kids etc

    Less than two years before you want to get married start living together and make sure you can actually get along, I would give it a year before getting engaged.

    But if anything starts to go south at any point then make sure you or her is out of there well before the two years is up.

    •  

      Does the 2-year rule still apply? In an earlier comment, someone mentioned these processes to determine the extent of the relationship:

      Identify and value the assets, liabilities and resources of the parties;
      Consider the contributions of the parties made throughout the relationship;
      Consider the future needs of each party; and
      Determine whether the proposed settlement is just and equitable.

      • +1 vote

        If it's less than two years living together - and you didn't get married or have any kids - then you are in the clear.

        Otherwise then you're facing that four step process.

  • +1 vote

    Just don't get her pregnant and you'll be right.

  • +5 votes

    I think it's time to end the relationship if you're worried about this.

    This will only end bad if you are having thoughts like this…

  • +1 vote

    This is one interesting thread which has absolutely no relevance to me but would like to know the answer of it.

  • +3 votes

    Until you see a lawyer, wearing protection or pulling out early is the best way of protecting your assets!

    •  

      do you come here often ?

      then look out for pinholes in your condoms

      •  

        Also watch out for spurgling.

  •  

    Move to Seattle and learn from Jeff. He managed to dump a "Mac" for a record low!

  • +4 votes

    ….maybe I am just old fashion, didn't expect having relationships with someone you care/love can be this complicated.

    Guess the lawyers will always have the last laugh.

    • +2 votes

      didn't expect having relationships with someone you care/love can be this complicated

      Unfortunately because the fact that YOU cared/trusted/loved does not imply THE OTHER PARTY had the same honest/pure feelings and is/was just using the situation to her/his benefit.

      Guess the lawyers will always have the last laugh.

      Not quite.
      Lawyers will ONLY act (and then laugh) when one party (usually the beneficiary female) decides is time to split … the money.
      Before that, of course it is lovey lovey … up until the split.

      •  

        I meant more on the I don't love you anymore but I want half of your possession part…that is just plain greedy especially when you are not even married.

        Where I came from, it is the goodbye and we go our separate ways…..that's it.

        Thanks for the info people, I will make sure that I pass the knowledge to my kids and will only give my property to my kids when they are happily married with their kids grown up or when I am dead whichever comes first.

        This topic has come up several times on ozbargain. Pretty interesting.

  •  

    I'm loving the OPs lack of awareness of how relationships with bedmates actually pan out long term

    guessing not a lot of experience there, so asking OzBargain how to save money

    I'm laughing through the vomit

  • +6 votes

    this is the shit makes me stay single forver.

    •  

      Is it, really?

      • +2 votes

        money > honey

        • +1 vote

          Nah, just more honey for less money

        •  

          when you got the money then you got the honey

          that's why find the honey first and make more money after

    • +1 vote

      You can't find a gf with assets comparable to you.

      • +2 votes

        Even if you do typically they're 10-30 years older than you in which case you probably don't want them anyway. Men's dilemma

  •  

    If you think she is the one, and you have almost paid off your home, best thing to do is rent your property out and then buy a property together.
    That way, in the event of a break up, you split that property in half and your other property that she didnt contribute anything should stay yours, but even that is not a guarantee if you guys get married, have kids and or are together for a long time.
    Even better get legal advise.

  • +2 votes

    Thanks all. We’ve had a discussion and have both agreed (at this point) to not claim anything from the other should things not work out. Whether that’s actually the case if/when the time comes is unknown.
    From most of the replies I’m screwed if it fails now anyway.
    However I trust what she’s said relating to assets and take her word for it. I don’t believe she’s the type of person to go against her word. We have a good relationship.