For a business owner in a de facto relationship, a separation can affect the business and your other assets in much the same way as a marriage would. Western Australia has its own rules for de facto financial matters, so it pays to understand where you stand before you make any decisions, particularly where a business, a company or a family trust is part of the picture. The right advice early on protects both your position and the business.
When a de facto relationship is recognised
A de facto relationship is generally recognised where a couple has lived together on a genuine domestic basis for at least two years. That threshold can be set aside in some circumstances, for example where there is a child of the relationship or where one partner has made significant contributions to the other’s assets. Once the relationship is recognised, the same broad principles that apply to married couples apply to how property is divided, so being unmarried does not put your affairs beyond the reach of a settlement.
What can be divided
The starting point is the whole asset pool, which is your assets minus your liabilities, wherever and however they are held. For a business owner, that can include the family home, company shares, partnerships and goodwill, family trusts and related entities, investment properties, share portfolios and superannuation. An asset is not excluded simply because it is held in one partner’s name or inside a structure, so a business built or grown during the relationship can form part of the pool, and debts and guarantees are counted as well.
How the court decides
The court weighs the length of the relationship, the financial and non-financial contributions each partner made, and future needs such as earning capacity, health and the care of children, before reaching an outcome that is fair and equitable. Non-financial contributions matter as much as money: unpaid work in the business, bookkeeping, or running the household are all taken into account. Because the process is discretionary, two similar situations can produce different results, which is why a realistic picture from a specialist is worth more than an assumed split.
Protecting a business
Where you owned a business before the relationship, or built one during it, protecting its value is often the central concern. How the business is structured, whether it is held personally, in a company or in a trust, affects how it is dealt with, and a business valuation may be needed. Recording arrangements in advance through a binding financial agreement is the surest way to keep certainty if the relationship ends.
The WA difference, time limits and finalising
De facto financial matters in Western Australia are dealt with under this state’s own family law framework rather than the Commonwealth legislation that applies to married couples elsewhere. The rules are broadly similar, but there are differences worth confirming. A de facto partner generally has two years from separation to apply, and whatever you agree should be formalised through consent orders so it is binding, because an informal understanding can be reopened later.
Where children are involved
Children can affect a de facto property settlement in two ways. Their presence can help establish the relationship even where the two-year period was not met, and the future needs of the parent who cares for them are weighed when the division is decided. Property and parenting remain separate processes, but they often move in parallel.
As the largest team of specialist family lawyers in WA, Leach Legal advises business owners in de facto relationships on property settlements and asset protection, with clear advice and a tailored path forward. Book a consultation to talk through your position.
