Over two million Australians live alone. For some it’s a matter of choice; for others it’s because they haven’t found the right partner. For those who have been through it all before, it may be fear of the financial consequences if they enter a new relationship which then breaks down. They may have built up substantial assets and a comfortable standard of living, and are wary of putting it all at risk.

Do they have any grounds for concern, and is there anything they can do about it? The answer to both questions is yes.

It is true that by marrying they immediately make their property available liable for a claim by their former partner. Such a claim would initially be minor. But it increases as the relationship lengthens and/or if they have children. In the case of de facto relationships, the couple must usually live together for at least two years before any claim can be made (unless they have a child).

So what can be done to avoid putting assets at risk in a new relationship? The parties can enter into a Binding Financial Agreement. This can specify what is to happen to the assets each party has at the commencement of cohabitation, in the event of separation. If properly drawn up by an experienced lawyer and signed before independent lawyers, such Agreements avoid the Family Courts and provide a substantial degree of protection. However such agreements can turn a personal relationship into a business one to a large extent and can cause considerable tension.

For people who don’t enter into these agreements, and who need to divide their assets at the end of a relationship, what happens to their ‘initial contribution’ of assets they brought in at the beginning?

Each case is different. What seems most important is the length of the relationship, the value of the initial contribution and the use the parties make of the assets each person owned at the beginning. Where the relationship is short, and the value of initial assets high compared to the value of the assets at the end, and where the initial contribution was a big factor in acquiring more assets along the way, then the person who made the initial contribution gets substantial credit for it and may get to keep most of what they brought in to the relationship.

But this become less the case as the relationship lengthens and particularly where there are children involved. The Family Court takes the view that the partners should ‘take the good with the bad’ and make provision for each other, particularly if there are children or if one person has a greater need at the end of the relationship.

For most people, it’s a case of ‘for better or worse’; they trust that they can come to a satisfactory resolution if the relationship doesn’t work out, knowing that the benefits of a happy marriage or de facto relationship makes it worth the risk.