Legal Comment from Mark Illidge of Hinterland Lawyers

May 2005

If you are in a defacto relationship and have assets or are about to purchase assets, it may be wise to have a Cohabitation Agreement.

These types of agreements set out the individual interests of each partner, make provision for future acquired assets and, in the event of separation or death, outline how the assets and liabilities of the partners are to be divided.  Agreements of this nature can bind the executors of the deceased partners estate (property) and when incorporated with a Will, lay down a platform for how the property will be distributed.

There is an attitude by some that this type of agreement is negative.  However we live in a sophisticated society and such agreements can have many advantages, more particularly where there are mature partners with substantial assets and/or children from previous marriages.

In addition to previously mentioned benefits, other advantages of a cohabitation agreement are as follows:

• A properly drawn agreement generally minimises any future disputes, and limits future legal costs and anxiety.
• Where partners have had children in previous relationships, it can ensure that their individual assets and contributions to property and liability are protected for themselves and their children in the event of separation or death.
• It can set out a wide range of responsibilities of each partner in relation to property that they may own either separately or together. 
• It may be used to exempt a party purchasing the other parties property from stamp duty.  This could represent a large saving to the purchasing partner.

The degree of certainty provided by a Cohabitation Agreement may make your life easier, either now or in the future. Something for you and your partner to discuss…

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