Securing your assets in a Cohabitation Agreement Australia is crucial for unmarried couples who choose to live together. A cohabitation agreement is a type of binding financial agreement. It outlines the rights and responsibilities of individuals who live together without getting married. It helps establish clear guidelines for various aspects of cohabitation, including:
- property ownership,
- financial contributions, and
- the division of assets in case of a de facto relationship breakup.
By having a cohabitation agreement Australia in place, you can protect your assets and secure your financial future while entering into a new relationship.
Cohabitation Agreement Australia Provisions
To secure your assets in a cohabitation agreement Australia, you can include the following provisions:
Separate assets are property or items one partner owns and retains all respective rights of ownership after a breakup. The owner retains control and responsibility for it in the event of a breakup.
In other words, there will be no question as to who legally owns the asset. Or whether the other party has any entitlement to it. You must outline in your cohabitation agreement Australia the assets that belong to each partner individually, such as:
- heirlooms, and
- business interests.
In a cohabitation agreement Australia, provisions about shared assets typically lay out the rules as to how property or items owned jointly by the couple will be divided in the event of a breakup.
Shared assets are the property or items that both parties own and are divided after a breakup as agreed upon. Thus, you must specifically define how shared assets will be divided in case of a breakup. This includes property, investments, and joint bank accounts.
Financial resources can include shared bank accounts, investments, and other assets that the couple has acquired together. The agreement should also include provisions for separate assets and maintenance payments.
A provision in the agreement specifying how financial resources, including income, savings, and retirement accounts, will be managed during the cohabitation and in the event of a separation can save you from unnecessary hassle.
Debts and Liabilities
The agreement can address separate debts, shared debts, and debt obligations. This provision provides security for both partners by formalising how property settlement will take place in the event of a relationship breakdown. It also helps minimise conflict after separation and ensures that both partners have a say in what happens to their debts and liabilities.
Inheritance and Estate Planning
A provision about inheritance and estate can help ensure that the assets and property of each partner are distributed according to their wishes in the event of a breakup. It can also provide for any children from previous relationships and ensure that they are financially protected.
If applicable, outline how business interests and assets will be protected, including any provisions for the continuation or dissolution of the business in the event of a breakup. This provision can also address the division of any business-related debts and liabilities. By including this in the cohabitation agreement, each partner can ensure that their business assets and interests are safeguarded, providing clarity and protection for both parties.
Why You Need a Cohabitation Agreement Australia
You might be wondering why there’s a need to execute a cohabitation agreement. The simple answer to that is: it’s a safety net! In the unfortunate event that your relationship breaks down for a lot possible reasons, this cohabitation agreement will save you from hassle and conflict.
That is why a cohabitation agreement Australia is important for unmarried couples living together in Australia for several reasons:
- Establishing entitlement. If one partner moves into a property owned by the other, they may have no rights with respect to the property, even if they contribute to the mortgage. A cohabitation agreement can clarify each partner’s legal entitlement, ensuring they receive fair treatment.
- Clarity in financial arrangements. The agreement can specify details for living together, such as how much each partner will contribute to the mortgage, bills, and other financial commitments. This reduces the potential for disagreement later on, as both parties are clear about what is expected of them.
- Protection in case of breakup. The end of any relationship can be stressful and confusing. A cohabitation agreement can make the process easier by outlining how property, debts, and other assets will be divided if the relationship ends.
- Protection of business interests. For couples with business interests, a cohabitation agreement can help protect individual business assets and clarify how business interests will be managed in the event of a breakup.
- Provisions for children from previous relationships. The agreement can include provisions for children from previous relationships, ensuring they are financially protected in the event of a breakup or death.
Family Law Act 1975
Are Cohabitation Agreements legally binding? Yes, they are legally binding so long as they comply with the requirements in the Family Law Act 1975. Section 90UB and 90UC of the Family Law Act 1975 regulate cohabitation agreements. It becomes binding when signed by both partners who have individually received independent legal advice on their rights, obligations, and concerns.
In legal terms, we also refer to cohabitation agreements as ‘de facto financial agreements.’ The law allows couples who live together but are not legally married to make an agreement that will settle their finances amicably after a relationship breakdown.
They can make the agreement before, during, or after the relationship and can cover a range of financial matters. This includes how they are to divide assets or financial resources, spousal maintenance and business interests in the event of a breakup. Moreover, the agreement must meet certain technical requirements to be binding, and each party must receive independent legal advice.
To know more about de facto financial agreements, this article might shed more light.
Secure Your Future With a Cohabitation Agreement Australia
Living together without the legal protection of marriage can leave you vulnerable in the event of a separation. A cohabitation agreement is a legally binding contract that outlines your rights and responsibilities when you live with someone as a de facto couple.
An expert family lawyer from JB Solicitors can help you draft a cohabitation agreement or binding financial agreements. They can also provide you with legal advice and guidance to ensure that your agreement is legally enforceable.
Contact a family lawyer today to start with your cohabitation agreement.