A question that often arises after separation is whether an ex-partner’s new relationship can impact how property is divided after separation. Whilst the outcome of a property settlement is generally based on the parties’ respective contributions and future needs, in some circumstances a new partner may be relevant.
Property settlements
The Family Law Act 1975 sets out how the court determines property settlements, including the distribution of assets and liabilities between you and your ex-partner.
The court must first consider whether making an order adjusting the parties’ property interests is just and equitable. If the court is satisfied that making an order is just and equitable, it generally adheres to the following four-step process:-
- Identify and value all assets and liabilities of both parties;
- Assess contributions made by each party (financial and non-financial);
- Consider each party’s current and future circumstances such as health, income, age, and care of any children;
- Determine the final overall percentage split based on what is considered just and equitable in all the circumstances of the matter.
New relationships can become relevant during steps 3 and 4, particularly when considering current and future needs.
Does my new relationship automatically change things?
No, simply entering into a new relationship does not automatically affect your property settlement with your ex. The impact depends on financial circumstances, timing, and whether your new partner contributes to the household finances.
How might re-partnering affect your ex’s property entitlement?
Financial support from the new partner
If your ex’s new partner financially supports them (e.g. providing income or contributing to or paying your mortgage/rent, bills or other living expenses), the court may consider that this reduces your ex’s ‘need’ and may assess their overall property settlement entitlement as being less, in circumstances where their financial position is no longer as vulnerable as it would be had they not re-partnered.
Shared living expenses
Living with a new partner can reduce your ex’s expenses (e.g. splitting groceries or rent). This shared financial responsibility may lead the court to conclude that re-partnering has reduced your ex’s ‘need’.
Blended families and new dependents
If your ex now has step-children or subsequent children from their new relationship, the court may consider that this increases their financial obligations.
Providing full and frank financial disclosure
Full and frank financial disclosure is required by all parties in family law matters.
If your ex-partner has moved in with a new partner and is receiving financial assistance, it is appropriate that this is disclosed. If you suspect your ex-partner is hiding financial information, you can seek further orders for disclosure or raise any non-disclosure during court proceedings.
Does it work both ways?
Yes. If you are living with a new partner, the same principles apply.
Your new partner’s income or assets are not usually considered joint property, but if they are significantly improving your financial circumstances (e.g. supporting you or paying off your debts), the Court may determine that your “need” is reduced.
Additionally:
If you live in rent-free in property that your new partner owns, this may reduce your housing needs.
If you are co-parenting with your new partner, and they help care for your children, the court may factor this in when assessing parenting responsibilities and future needs.
Does timing matter when entering a new relationship?
If your ex re-partners after finalisation of your property settlement, it generally has no impact unless there has been significant non-disclosure or fraud during negotiations or court proceedings.
However, if the relationship begins before the settlement is agreed or court orders are made, it could be relevant. This is especially true if:
- your ex is now living with their new partner;
- their expenses have significantly changed; and
- the new partner is contributing to assets or debts.
Takeaways
A new relationship doesn’t automatically affect property division, but it can be relevant to future needs.
The court may consider whether the new partner is reducing your ex’s expenses or financially supporting them.
If your ex-partner is in a new relationship, this must be disclosed if relevant to their financial situation.
Each case is determined on its own facts based on what is just and equitable.
Tips before negotiating a property settlement
- Gather evidence of any financial contributions from a new partner that may be relevant.
- Consider mediation before going to court.
- Don’t delay settling – the longer you wait, the higher the likelihood of new relationships and other changes complicating matters.
Here to Help
Contact us now for free no obligation initial telephone advice about the potential impact of one party to a family law property settlement re-partnering.
