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Modern families and changing laws

By Dharsh Nanayakkara - 26 Sep 2019

Family demographics have changed significantly over the past 60 years.  To keep up, the Property (Relationships) Act 1976 (PRA) was amended in 2002 to extend the property sharing to heterosexual and homosexual de facto and civil union partners.

Current census figures indicate less traditional marriages are taking place in favour of more blended families and multiple de facto relationships.

After extensive consultation and a thorough review of the law affecting relationship property, the Law Commission issued a report in 2018 that made over 100 recommendations.  I focus on two of them.

First, the Commission found that "family use'' as a basis to classify the family home sometimes resulted in unjust outcomes, for instance, where the home was owned by one partner before the relationship began, or if it was received by one partner as a third party gift or inheritance during the relationship.

The Commission recommended that the home be divided equally only where it was:

  • Acquired by either partner for the common use or benefit of both parties; or it was
  • Acquired or produced by either partner during the relationship (excluding third party gifts or inheritances).

Under the recommendation only the increase in value of the home is treated as divided.

Secondly, the Commission noted the prevalence of trusts in relationship property matters and observed that determining the rights and remedies of relationship partners was complex.  It recommended new powers be given to the courts to look behind trusts to see the real situation and to impose obligations on trustees.  Relationship partners would also be given the right to lodge a claim over trust property in some circumstances.

One of the reassuring observations by the Commission is that the current section 21 'contracting out' regime is working effectively and is striking an acceptable balance between allowing partners to make their own arrangements as to how their property is divided on separation while ensuring they receive the advice necessary to make informed decisions about such agreements.

If you have any concerns or queries relating to any of the matters raised, please contact our Family Law team.

Contacts

Dharsh Nanayakkara

Andrew Steele

 

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