Estate planning can require special focus for same sex couples .

Centric Wealth has said that even without recognised gay marriage, there are many areas where those in same sex relationships are given the same rights as traditional couples.  However, as legislation varies amongst states and territories, it is imperative that same sex couples seek estate planning and financial advice to ensure their partner is taken care of in the future.

Natasha Panagis, Centric Wealth technical specialist said that same sex couples who are in a registered relationship with their partner or live with their partner in a de-facto relationship will have their partner recognised as their spouse under legislation for superannuation, taxation and social security purposes. “As most states and territories now allow the registration of a de-facto relationships, be they same or opposite sex, the broader definition of spouse means that same sex couples must ensure that adequate provision is made in the will for their beneficiaries such as their spouse or children. Thus, to avoid problems in the future, it’s important that same sex couples obtain advice on achieving their estate planning goals and how to minimise disputes after death. “Its natural for younger people not to want to make a will as few of us relish contemplating our mortality, which is at the centre of the will making process. Happily, though, more and more people are realising the making of a will is simply good financial housekeeping and that it is never too early to make one.

“It is highly recommended that a will be drawn up with the assistance of a lawyer given the importance of the document. These professionals will provide advice and most importantly help ensure a person’s estate planning wishes occur,” Ms Panagis said.

“All too frequently what may be fought over in a legal suit can get consumed in legal bills and everyone loses as the cost of the dispute is generally incurred by the estate which erodes the amount for intended beneficiaries.

Ms Panagis said superannuation death benefits can also be paid to a same sex partner if they are in a de-facto or a registered relationship. In the past, the partner needed to establish financial dependency or show an interdependency relationship.

Similarly, same sex couples can also make binding financial agreements, also known as prenuptial agreements, which can allow a couple to consider how assets will be divided if the relationship breaks down. Couples wishing to consider binding financial agreements for their situation should seek legal advice. These agreements can be made before, during or after a relationship.

Ms Panagis said that dying without a will (ie. dying intestate) means control over who will receive the assets in your estate will be taken out of your hands and will be determined by intestacy legislation, which varies across the country. To die without having a legal will may leave those you love with unnecessary distress, uncertainty and expense.

“The three soundest pieces of advice I would give same sex couples who are in serious long term relationship is to ensure their relationship is de-facto or registered, for both partners to make a will with the assistance of a professional adviser and to create a binding financial agreement. The importance of estate planning and financial advice cannot be underestimated”.

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One in four Australian households now have a female as their breadwinner.

More than half a million or one in four Australian households now have a female as their major breadwinner – 140,000 more households than 10 years ago, according to the latest AMP.NATSEM report.

The proportion of families with both parents working has risen dramatically, with 58 per cent of all ‘couple with children’ families having both parents in the workforce, compared to 40 per cent in the 1980s.

Australians are more likely to swap house keys than wedding rings with 78 per cent of people living together before marriage, up from 72 per cent 10 years ago, and a drop in the nation’s annual marriage rate from 6.6 marriages per 1,000 people to 5.5 in the past decade.

These are some of the key findings in the AMP.NATSEM Income and Wealth Report Modern Family which explores the changing shape of Australian families. The report analyses data from a variety of sources spanning from 2001 to 2011.

According to the report, the number of blended and step-families has doubled in recent decades, together making up almost 11 per cent of Australian families with dependent children, compared to 6.8 per cent in 1986.

While blended and step-families are on the increase, divorce rates in Australia have stabilised at 2.2 divorces per 1,000 people and marriages are lasting longer – on average 12 years, up from 10 years in 1991.

The report finds more than half of all Australians support equal rights for same-sex couples in relation to marriage and children, an increase of 14 percentage points in just over five years. A belief in equality for all extends across the generations, with 42 per cent of Baby Boomers and three in 10 older Australians supporting equal rights for same-sex couples.

The number of same-sex couples has increased 72 per cent in 10 years from 19,594 in 2001 to 33,714 in 2011, with most of this growth coming from non-metropolitan areas. This significant increase is likely to be driven by same-sex couples being more comfortable about disclosing their relationship.

AMP Chief Customer Officer Paul Sainsbury said today’s modern family is almost unrecognisable from the Mum, Dad and a couple of children households of recent decades.

“Today’s modern family is complex and diverse.  Living alongside more traditional families are blended and step-families, single parent families, de facto couples and same-sex families,” Mr Sainsbury said

“The report shows the divorce rate has stabilised, and divorces involving children have actually declined, perhaps because Australians are getting married later and the financial and psychological impact of relationship breakdowns is causing people to think twice.

“The cost of raising children, financial stress from divorce or coping in challenging economic times can have a significant impact on family stability, so it’s important that Australian families have their finances in order before challenges crop up,” Mr Sainsbury added.

The AMP.NATSEM Modern Family report analyses data from a variety of sources, including the 2011 Australian Census and the Household, Income and Labour Dynamics in Australia Survey, which spans from 2001 to 2011.

Other key report findings

There are more female breadwinners than ever before

• One in four or 521,000 Australian ‘dual-earner’ families now have a female as their major breadwinner, up from 22% or 385,000 families 10 years ago.
• A female breadwinner household is one where the female earns more in wages than her male partner.

Families on lower incomes are more reliant on female breadwinners

• About 27% of dual-earner families with low household earnings and 25% of middle income dual-earner families have a female breadwinner. Only 17% of high income families have a female breadwinner.
• Tasmania has the most female breadwinners at 35%^[1] of all dual-earner households and WA has the lowest proportion at just 18%.

Women come to the rescue when times get tough

• The number of female breadwinners rose across all income levels during the recent global financial crisis, from 22% to 24%. 

Australian first-time mums are approaching 30

• First time mothers are on average 29 years old, compared to 30 years ago when they were just over 25 years of age.
• Almost one in four babies are born to mums aged 35 or over.

NSW is Australia’s marriage capital

• NSW has the highest annual marriage rate at 5.7 marriages per 1,000 people, followed closely by Qld at 5.6 while the NT at 3.9 marriages has the lowest.

The popularity of church weddings has taken a dramatic dive

• The number of Australians marrying in civil ceremonies has almost doubled since 1991 – up from 38% to 70%.
• NT has the highest number of civil ceremonies at almost 80%, followed by Qld at 75%, while NSW and the ACT have the equal lowest rate of civil ceremonies at 66%.

More people live together prior to marriage in Tasmania than anywhere else

• More than 87% of people in Tas live together before marriage, compared to NSW with the lowest rate of 72%.

Australia’s fertility rate is below the population replacement level but trending up

• The fertility rate for Australian women has increased from 1.8 births per 1,000 women in 2001 to 1.9 births in 2011, but this is still below the replacement level of 2.1.

We’re not the USA – the divorce rate in Australia has steadied at 2.2 per 1,000 people

• Divorces are least common in the NT with 1.5 divorces per 1,000 people, followed by NSW at 1.9, while Qld has the highest divorce rate in Australia at 2.5.
• Australia’s divorce rate is similar to the UK and Canada, but much lower than in the USA which has 3.4 divorces per 1,000 people.

The proportion of blended and step-families is on the rise

• The most common type of family are those with two natural parents and two kids which make up 28% of all families with kids. Intact couple families with one child are the second most common at 23%, followed by single parents with one child at 15%.

• The number of blended families with dependent children has increased from 2.5 to 4% since the 1980s and the number of step-families with kids has increased, from 4.3 to 6.9% over the same period.

Blended and step-families are financially worse off

• The average weekly wage for blended and step-families is $195 less than intact families – $1,878 compared to $2,073.
• Blended and step-families are less likely to own their own home compared to intact families.

The majority of Australians support equal rights for same-sex couples

• Nearly two-thirds (64%) of Gen Y, 53% of Gen X and 42% of Baby Boomers support equal rights for same sex couples and more than 30% of older Australians (born between 1906 and 1945) also support same-sex equality.
• Recent consumer attitude polls show about 65% of Australians support same-sex marriage.

More than 22 per cent of female same-sex couples have children

• Female same-sex couples have about the same number of dependent children as single parents.

Inner Sydney is the number one location for same-sex couples

• 10% of male same-sex couples live in the inner Sydney suburbs of Darlinghurst, Potts Point and Surry Hills and overall make up around 18% of all couples in each of those suburbs.
• The 10 suburbs with the highest percentage of female same-sex couples are all in Sydney’s inner west.
• Outside Sydney, the Melbourne suburb of Collingwood has the highest proportion of male same-sex couples and the Victorian town of Daylesford has the highest proportion of female same-sex couples.

NATSEM Principal Research Fellow Rebecca Cassells, and lead author of the report, said young people are no longer expected to marry in their early twenties, in a religious ceremony, and have three or four kids cared for at home by the mother while the husband heads off to work.

“Today’s modern family usually starts with a couple living together before marriage, perhaps deciding to delay having children, and when they do start a family, while it’s more common for women to be the primary carer, most mothers will quickly return to work, at least part-time,” Ms Cassells said.

“Given the enormous changes that have occurred over the past century, we can only begin to imagine how families will evolve in coming years,” said Ms Cassells.

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The change has brought de facto couples under the Commonwealth Family Law Act which has applied to married couples since 1975. Before this change, each State had separate and quite different laws covering property and maintenance matters for de facto couples, such as the Property (Relationships) Act 1984 in NSW. Where disputes needing the attention of a court involved both parenting and property issues, de facto couples often had to commence proceedings in two different jurisdictions; a Federal Court to deal with parenting and a State Court to deal with property and maintenance.  Now the Family Law Court deals with both issues for de facto as well as for married couples under the same Family Law Act.

To whom does the Family Law Act now apply?

The Family Law Act now applies both to couples who are married and to those in a de facto relationship. Note that same-sex relationships are included within the definition of ‘de facto couple’ in federal laws and that all de facto couples now have the same rights and obligations as married couples regarding maintenance and the distribution of property. Other legal changes throughout 2008 and 2009 put same sex couples in the same position as opposite sex de facto couples regarding taxation, superannuation, social security and aged care.

The term “de facto” is not closely defined. To meet the definition, couples must not be married to each other nor related by family, and must have lived together on a genuine domestic basis. What amounts to a genuine domestic basis will be decided by a court’s assessment of all the circumstances, but an application for a “de facto property settlement” under the new Family Law Act provisions can be made if any one or more of the following conditions apply.

• The de facto relationship lasted for at least two years in total.
• A child has been produced by the de facto couple.
• A partner has made a substantial contribution to the property or finances of the other.
• The relationship was registered under a State or Territory law.
• The partners resided for at least one-third of the relationship in a state to which the new laws apply (currently all Australian states and territories except South Australia and Western Australia).

If there is a dispute about whether two people were in a de facto relationship, the Court will consider matters such as:

• the length of the relationship  (a minimum of two years is usually required);

• the living arrangements, including whose name is on a lease, who pays the rent and so on;
• whether a sexual relationship exists;
• the degree of financial interdependence;
• whether property was jointly acquired, used and owned;
• whether the couple had or cared for children together;
• how the relationship was presented in public and
• the degree of mutual commitment to a shared life.

The sex of the partners is not relevant. The new laws explicitly apply equally to de facto couples of the same or opposite sexes. A de facto relationship can also exist even if one of the partners is legally married to another person at the time, so the “mistress” (or the male equivalent) may now have rights that did not exist prior to 1 March 2009 and which may impact on the property rights of a married spouse who is not having an affair. This aspect has not yet been fully tested in court.

Who can apply for a property settlement?

The new laws apply to de facto relationships that broke down on or after 1 March 2009, but earlier breakdowns can be considered if each partner agrees in writing to have the new laws apply.  Application must be made to the Family Court in relation to property and maintenance issues within two years of your relationship ending. Applications in relation to children can be made at any time.

How will property be divided?

Before the changes, the outcomes in property settlements often differed widely between de facto and married couples. For example, in NSW only the relative contributions (financial and non-financial) to the assets and liabilities of the relationship were taken into account when deciding on the post-split division. Crucially, the Family Court now also takes into account future needs, so that matters such as the provision of an adequate standard of housing post separation and low future earning capacity will be factored in. The member of the couple who is financially stronger is usually less favourably treated under the changed rules, and often more than 50% of the net asset pool is now awarded to the weaker party.

Consequently, the Family Court will consider these factors.

• The net value of current assets, including houses, investments, boats, caravans and superannuation.
• What each partner owned before the relationship and the contribution each person has made to the upkeep and improvement of any assets brought into the relationship.
• The direct financial contributions (eg wages, or payments for properties or improvements to properties), indirect financial contributions (eg gifts, inheritances or payment of household expenses) and non-financial contributions (eg do-it-yourself renovations, caring for children or domestic tasks) made by each person over the course of the relationship.
• Each person’s future needs, including considerations such as who will have the care of any children, relative earning capacities, and the financial resources available.

Once the court has decided on the split of the assets, it may make orders about how implementation will occur, such as:

• that assets such as the family home will be sold and the proceeds will be divided in a particular manner;
• that title to various assets will be transferred;
• that regular maintenance payments will be made; or
• that superannuation funds will be divided in specified proportions.

Will formal agreements between partners be effective?

The new laws do provide for de facto couples to make “binding financial agreements” about the way they will manage their assets together. This can be done before moving in together, during the relationship or after separation. Legal advice should be sought, because neither party can unilaterally change their mind at a later date and ask for a larger share of the assets. Also, certain formal requirements must be met if the agreement is to be binding, and it is usually a good idea to register agreements with the Family Courts in the form of Consent Orders.

Financial planners who have clients in same or opposite sex de facto relationships who they refer to solicitors for wills, powers of attorney and the like, should put binding financial agreements on the agenda for consideration.

Do the new laws provide recognition of parenthood for same-sex couples?

Many children born to or adopted by same-sex couples will be recognised by the law as children of both parents. This will include:

• children conceived through assisted or artificial methods to lesbian couples;
• children adopted by one or both members of a same-sex couple, as long as both consent; and
• children born under surrogacy arrangements recognised under a state or territory scheme. (NSW does not have such a scheme).

This recognition of legal parenthood applies to child support and parenting matters including decisions such as where the children will live, who they will spend time with, and who will make long-term decisions regarding education, religion and the like.

The Family Court has always heard matters in relation to children no matter what the relationship status was between the parents. Before the amendments same-sex parents could obtain parenting orders if they could demonstrate they were a person concerned with the care, welfare or development of the child but they can now apply to the Court for parenting orders in their own right as a parent. Court decisions continue to be made by considering what parenting arrangements would be in the best interest of the child.

Recognition of same-sex parents in some other matters, such as consent for medical treatment, fall under state laws.

Can the court make orders concerning maintenance and child support?

Either member of a separated de facto couple can make an application for the other party to pay maintenance to them for their financial support. The court will consider the relative financial position of each of the partners, and will make an order for maintenance if:

• applicants cannot adequately support themselves financially due to poor health, having the care of a child of the relationship or similar reasons beyond their control; and
• the  former partner of the applicant has the ability to provide financial support.

If a maintenance order is made, it will usually be for a fixed and limited period of time.

From 1 July 2009 child support laws have also applied to same-sex-parents, regardless of whether the children were adopted or born through assisted conception.

If a person’s name appears on the child’s birth certificate, or a court has made a finding, or a statutory declaration of parenthood has been signed, then it is likely that parenthood will have been established with attendant child support obligations. A parent can ask the Family Court for a declaration that child support is payable by their former partner.

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