Cohabitation Agreements (also known as “prenups” and “lifestyle agreements”) are a type of Binding Financial Agreement that may protect your interests.
The Purpose of Cohabitation Agreements
The general purpose of these agreements is to provide a legally binding document for the duration of your relationship as well as in the case of separation or divorce. This document provides legally binding details as to how you and your partner will conduct yourselves financially.
These are also intended to pre-plan how finances are to be split in the event of a relationship or marriage breakdown.
These agreements can also go into detail about other issues, such as what roles and responsibilities each party will adopt during the relationship.
Consider How the Agreement Will Workout Long-Term
It is important to note that a Cohabitation Agreement can work for you as well as against you. For example, if you were financially better off than the other party at the beginning of the relationship, but at the end, you find you are financially worse off, then, in hindsight, it may have been to your advantage not to have signed a Cohabitation Agreement.
The Agreements are Designed to Protect Your Interests
Cohabitation Agreements are sought mostly when people with children start new relationships or marriages, and they wish to protect what they have financially, from the other party, should the relationship or marriage break down.
A Will is not sufficient to protect your finances for your children in the event of a relationship or marriage breakdown before you die.
For these Agreements to be binding, each party must have their own lawyer sign a Certificate of Independent Legal Advice regarding their rights.
It isn’t possible to force the other party to sign one of these agreements. To do so is to risk the agreement being set aside by a Family Law Court for “duress”.