Skip to main content

The family home is more than just bricks and mortar. It’s more than just a roof over the heads of your loved ones. When you buy a house and make it a home it becomes a safe haven, a sanctuary and a place where memories are made. From the tyre swing in the back yard, to the door frame you measure the kids against, all of it is precious. So too is the financial legacy you will leave behind. So it only makes sense that you’d want to ensure that your property investment is protected for your future generations.

What to Think About

In order to protect your family asset there are few things you may wish to think about:

Do you own your own business? If so you may want to ensure that your property is protected against creditors in the event of a business downfall.

Are you married?  How would you intend to divide the investment in the event of separation or divorce?

Do you have children? Do you have children from a previous relationship?  How do you want your assets divided up after your lifetime.

All of these things may affect the way you choose to protect your property investment.

Another thing to be aware of is the Property (Relationships) Act 1976. This Act is an amendment of the Matrimonial Property Act 1976, which has been adjusted to include more protection for unmarried and same sex couples.

The Property Relationships Act

The Property (Relationships) Act 1976 applies automatically to all people who are married, and to people who are over 18 years old who have lived in a de facto relationship for at least three years. Where there is a dependent child involved, the Act applies to de facto couples who have been living together for less than three years. The legislation also applies to same sex couples.

When a couple separates and the Act applies, all property acquired during that relationship is shared equally between them. The reasons why the relationship ended are not relevant to this equal sharing rule. Even if one party feels blindsided by the separation, they are still legally required to divide all assets evenly with their former spouse.

The relationship home and other family assets, including motor vehicles and boats, are also shared equally after three years, even if they were owned by only one of the parties before the relationship began. Equal sharing applies whether the property is owned in joint or individual names.

Equal sharing also applies in the event of one partner dying during the relationship. The surviving partner then has a period of six months to decide whether to accept the provisions of the deceased person’s Will, or to make a claim for an equal share of the relationship property under the Act. This can be an issue when there are adult children from a previous relationship to consider, making it even more important to ensure that your Will is up to date with clear instructions on how things are to be divided at your death.

What are possible solutions?

There are many different legal options available to ensure that your assets are protected adequately under the new legislation.

Contracting Out

It is possible to ‘contract out’ of the provisions of the Act if it does not suit your individual circumstances or will lead to a grossly unfair situation; i.e. your children being left with nothing after your de facto partner inherits the lot. Any agreement however must be fair to the other party. For the ‘contracting out’ agreement to have legal effect, each partner is required to consult an independent legal professional and sign the required documents.  Some agreements can be quite complex, but time spent now can prevent tears, frustration and litigation later!

Joint tenancy

‘Joint tenancy’ is a method of owning your home in conjunction with another person, whether or not that person is a partner or a spouse. On the death of one joint tenant, the property is automatically transferred to the survivor regardless of the provisions of the deceased’s Will.

Tenants in common

A property may be held as ‘tenants in common’. If one partner dies, their share does not pass automatically to the survivor (unlike a joint tenancy), but passes according to the deceased’s Will.  This option will not protect you for a claim under the Property (Relationships) Act 1976.

This ownership method is often recommended for partners or friends buying property together. It is also particularly important to think about this ownership structure when people want to reserve their share for their children (whether or not from another or prior relationship).

Family trust

Family trusts are the most commonly used method of asset protection.  They are usually the best solution. However, a family trust will only be recommended if it suits your individual circumstances.


If you are buying a home, it is essential you have a Will. You are the owner of a major asset and it is imperative that you leave instructions about what should happen to your property if you die.

When someone dies Intestate (without a will) their assets are divided up under the Administration Act as follows:

  • Your personal chattels go to your spouse or partner as well as the first $155,000 of the estate plus one third of the remainder. The rest goes to your children.
  • If you do not have children, your partner gets the chattels, the first $155,000, two thirds of the remainder, and your parents get the last third. If your parents are no longer living, your partner gets the lot.
  • If you have no partner then your children inherit the lot equally.
  • If you have no partner or children, your parents inherit the lot. If your parents are no longer living then your next in line, blood relatives inherit the lot. If you have no blood relatives then your estate is left to the Crown.

Even if you already have a Will you should update it as your situation changes. It is wise to regularly update your Will to ensure that it reflects your current wishes and circumstances. If you no longer have living relatives you may wish to consider gifting your estate to a friend or charity.

Enduring Powers of Attorney

You should also make sure you have Enduring Powers of Attorney (EPA) so that in the event of an accident or some incapacity, decisions can be made about your welfare and/or property, and keep your affairs in order. There are two forms of EPA.

Power of Attorney in relation to personal care and welfare

This grants your attorney the power to act for you generally, although it may be restricted to defined specific matters such as a choice of rest home, medical care, etc. You can also place restrictions on your attorney, for example, ensuring that they consult with other family members before making final decisions.

There can be only one attorney (usually a spouse, partner or close relative) appointed in relation to your personal care and welfare. Provision can be made in the document for an alternative if the first appointee dies or becomes incapable.

Power of Attorney in relation to property

This allows the attorney to act in relation to all your property, or to specific property. More than one attorney may be appointed.

The witnessing provisions for EPAs are complex; it is important to make sure that you choose a legal team who are experienced in this area.

Dealing with the legal side of property investment may seem a bit daunting. But with a little help from a great legal team you can insure that your family’s home is protected.