5 Things to Know About Pre-Nuptial Agreements & Cohabitation Agreements

Do you live with your partner in a romantic relationship? Are you planning to get married? In either case, hoping for the best and planning for the worst can give you peace of mind should the relationship or marriage fall apart. Pre-nuptial agreements and cohabitation agreements are two agreements that can cut down on all or most of the stress involved with separation and divorce. Below are five things to know about these agreements:

  1. Pre-Nuptial Arrangements & Cohabitation Agreements: What Are They?

Pre-nuptial arrangements are agreements whereby two partners who are planning to enter into a de facto relationship or a formal marriage. They often cover financial matters in the event of a divorce/separation in the future, but they can also cover other factors like spousal maintenance.

Cohabitation agreements are similar but also different. They are contractual agreements between two unmarried partners that are romantically involved with one another in a de facto relationship. These agreements outline the rights and responsibilities of each partner as well as outline provisions should the relationship come to an end in the future.

  1. Prenups Have Many Possible Benefits

There are many potential benefits to formalising a prenup, including:

  • A sense of certainty: if the relationship comes to an end, the process of finalising the division of assets and other matters is much more streamlined ahead of time.
  • Improved security: both partners/spouses will have the peace of mind knowing that if the relationship ends, they will know what their obligations will be.
  • Taxation benefits: in some cases, partners that have signed a prenup can enjoy tax benefits such as capital gains savings and state transfer duties.
  • Privacy: the only people that need to know about the prenup are you and your spouse/partner and the lawyers involved.
  • Time & cost savings: divorces can range from costly to extremely costly, so the time and costs involved with creating a pre-nuptial agreement can mitigate the costs of ongoing litigation later on.
  1. Cohabitation Agreements vs Marriage

Cohabitation agreements which are signed between two unmarried partners are actually very similar to marriage in many regards. They do have some key differences, however. 

  • Married couples must obtain a marriage license whereas cohabitating partners do not.
  • Ending a cohabitation does not need a divorce and can be done informally, marriages do require divorce filings done formally.
  1. Notary Publics are Not Needed, But Legal Counsel is Strongly Advised

One of the big benefits of agreements such as cohabitation agreements and pre-nuptial arrangements is that they do not need to be formally signed by a notary public. This doesn’t mean they should be done on a napkin during the wedding reception, however! Legal counsel from family law experts is strongly recommended during the formulation of these documents.

  1. Pre-Nuptial Agreements & Cohabitation Agreements Can Keep Family Court Away

For many couples in Australia, the matter of Family Court is certainly a prickly pear. Regardless of your opinion, it is in place and the Court will be involved in almost all cases of divorce and separation.

Pre-nuptial agreements and cohabitation agreements can help couples avoid the need to go to Family Court, which in itself can be a huge relief and result in more favourable outcomes and far lower costs spent in litigation should it come to that.

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