QUESTION: Can you please help me explain to my client the new definition of "defacto" in South Australian Acts?
ANSWER: The new definition of "defacto" in all South Australian Acts has been effective as of 1 June 2007. There are now new legal rights and duties to persons defined as a "Domestic Partner".
Interestingly, you no longer need a physical relationship to be trapped by the definition. You just need to have lived together on a general domestic basis as a couple - close companion or life partner:
For a period of 3 years or more (it is 2 years in most other states, such as WA); or
Periods aggregating 3 of the past 4 years; or
Who are both the parents of a child, whether or not the child is still living.
You can escape this if you are simply flatmates or boarding as a live in housekeepers or a paid carer. (This is assuming you don't have a physical relationship with your housekeeper.)
What is interesting is the new rights granted to domestic partners by these new changes:
If your client dies without making a Will and they continued to live with their partner up to the date of death, the surviving partner inherits some or all of the estate and can apply to be appointed administrator. This has been the case in other states, but generally only for married couples and hetero couples.
The domestic partner can make an inheritance action for a share of the estate.
What happens if there is a bust up? They can ask the court for some of your client's assets. This is based on their respective financial and non-financial contributions during the relationship. They don't have to have been working to get your client's money. Looking after a child or eye-candy value are enough.
If a domestic partner who shared a house transferred it from their name to the other partner's name or into both their names there will be no stamp duty payable.
They are able to give consent to medical treatment because of your client's incapacity.
They can apply to be appointed the other partner's legal guardian or to administer the partner's property.
If your client dies, the surviving partner can make decisions regarding organ donation, post-mortem examination and cremation of the body.
As in all states (excluding Victoria) they can enter into Co-Habitation Agreements or Domestic Partnerships. (These are very similar to Binding Financial Agreement -- which married couples can prepare.) These are not Wills. A Will takes effect when you die. A Co-Habitation Agreement only comes into effect if you break-up. If you never break up then it never comes into effect -- and your Will prevails. Brett Davies Lawyers charge about $1,500 to $2,200 for Co-Habitation Agreements and about $2,200 for Three Generation Testamentary Trust Wills.
Still not happy? Many parents that are rich or own farms are pretty upset by these laws, which exist throughout Australia. This is what you can do about it:
If you are going to give something to your children -- don't. Instead either loan it to them through a Loan Agreement or prepare an Acknowledgement of Trust or a Declaration of Trust to say that although it is in the child's name it still belongs to you.
Get an Enduring Power of Attorney from your children, in case they lose mental capacity.
Get the child to do a Revocation of Power of Attorney if they have given one to their defacto, already.
Get your child to do a Co-Habitation Agreement (or if married, a Binding Financial Agreement) where all the assets that you have given them or that you own and they may get in your Will remain with your side of the family. These are legally binding and override the Family Court and defacto laws.
Put assets in a Family Trust and let the parents control the Family Trust.
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