Protecting your assets in a defacto relationship

Here is an example scenario which demonstrates how a financial agreement can protect assets that were owned prior to cohabitation.

Question: My Girlfriend and I have been living together for about 6 mths and she is 5 mths pregnant. I’m happy to share all our income and assets from this point on however if we were to split up I don’t think she should be able to lay claim to the house my parents left me in their will.

Answer: Your de-facto agreement should state exactly that, and that the birth of the child will not entitle her to any claim over the house for her own upkeep. Be careful! The birth of a child MAY entitle a claim for child support and you can’t contract out of that, assuming that the child is biologically yours. You may find that you are required to contribute to your girlfriend’s upkeep from your INCOME if you separate but not from pre-existing ASSETS.

The difference between the two agreements rests on the following technicality: there are rights and privileges which flow from marriage and these are something the commonwealth can regulate under the constitution. De-facto relationships are a state power and some states allow the commonwealth to regulate them under the family law act but others don’t.