How To Protect Your Assets During A Breakup
Last year there were almost 50,000 divorces granted in Australia, sadly making it one of the most common issues Australian families must deal with.
Often, when people think of divorce, they empathise with the emotional impact this has on an individual, what is often forgotten about is the major financial implication it has on both parties, especially if there are assets such as investment properties involved.
And a separation doesn't need to be between a husband and wife for it to wreak havoc o finances. In Australia, if a couple have been living together for more than two years, they are considered 'de facto' and their assets are treated the same as married couples i they break up.
Zaki Ameer, Real Estate Expert and Founder of Dream Design Property (DDP) says, "Unfortunately most people don't understand the seriousness of relationships when it comes to assets. Loosing significant amounts of money doesn't only happen during divorces, it can happen to any couples who have been living together. For example, if a relationship goes sour between two people who have been renting together for more than two years, both individuals are entitled to receive a percentage of their ex's assets, whether they were purchased before or during their relationship."
To avoid a breakup leading to bankruptcy, Zaki shares his expert advice on how to protect assets before a separation occurs:
- Know where you stand. People are often still confused about the difference between a de facto relationship and a marriage when it comes to dividing investments. It's actually very simple, if a couple is considered de facto, their financial matters are determined in the same way as married couples. Aside from living together for two years or more, a partnership is also classified as de facto if there is a child from the relationship, or if they have registered it under a prescribed law of a State or Territory. So if a person separates while in a de facto relationship, from a legal and assets perspective, they should be prepared to be treated as if they were married.
- Don't make it personal. From the start of any relationship it's important to discuss assets and money, whilst keep emotions at bay. Being open and honest about finances from the get-go means awkward conversations can be avoided down the track, and both individuals are aware of each other's investments.