The Right Time To Formalise Cohabitation

When is it time for a Cohabitation Agreement?

Unwedded bliss! Living together, sans a formal marriage and all the baggage that comes with it, is perceived as the ultimate easy-living relationship. Easy to get into for sure, but not always easy to get out of!

So you’ve met ‘the one’ or maybe will be ‘the one’ after some time spent living together, it’s all happy times, romance and loads of fun. But the clock is ticking on this seemingly blissful existence because after 2 years living as a de facto couple, your relationship is effectively considered as a marriage in many aspects of the law. Mmmm, yes, something you may not have considered or even been aware of, and this applies to both heterosexual and same-sex relationships.

In the UK, the traditional gift for the 2 year wedding anniversary is paper. Ironic, as in Australia, the 2 year cohabitation anniversary should also be paper – in the form of a formal cohabitation and financial agreement.

It’s perhaps not the most romantic of conversations to have and yes, we understand that one party may feel there are ulterior motives in requesting such an agreement be drawn up, but you both need to consider the facts.

What is the basis of your cohabitation arrangement? Who pays what and what is the understanding?


Are there any plans in place to divide assets in the event of a separation?

A quick read of our article on separation for non-married couples and you will quickly appreciate that having a formal agreement is essential, for a number of key reasons:-

  • If one party has contributed significantly greater assets to the relationship than the other. Are these assets considered as joint-property or is it a case of ‘what’s mine is mine and what’s yours is yours’. Assets could be real estate, perhaps the residence you are living in, investments, or even furnishings and fittings.
  • If either of you wants any specific assets excluded from your cohabitation arrangements, ie retain sole possession and not be considered as communal assets, this needs to be in writing.
  • If there is a business involved. If one party owns their own business, this may be considered as ‘joint assets’ under the law after the 2 year anniversary and as such, may have to be sold to finalise settlement in the case of separation.
  • If one or both of you, have your own investments, shares, work-related entitlements, superannuation or even trust structures. If ownership of these is not formally identified in a cohabitation agreement, they too may fall under the joint-property classification. Hello, yes, you could lose half of your hard-earned or hard-inherited assets.
  • In Australia’s wonderful multi-cultural society, there is an increased possibility that one party may have assets located internationally and these may be considered as communal if not otherwise agreed upon.
  • While old flames turn into dead matches, the effects of previous relationships can impact current relationships if one party brings assets or wealth into the new relationship from a previous relationship. Perhaps a divorce settlement – that could be in jeopardy.
  • And all the issues that apply to assets, equally apply to debt! If one party has debts, ie loans, credit cards and other financial obligations, at what point in the relationship do these debts become STDs? That’s sexually transmitted debt

So as you approach your 2nd anniversary as a happily cohabitating couple, blow out the candles, turn on the lights and have the TALK! Discuss drawing up a cohabitation and financial agreement. As background, read our website information and blogs on de facto relationships so you can share the facts with your partner. Then come in and discuss it all with us.

Our team is very experienced in all aspects of family law and can work with both of you to draw up a cohabitation and/or financial agreement so you can continue in unwedded bliss sans the worry of jeopardising assets if you separate. Please contact John McLaughlin, McLaughlin & Associates Lawyers, on 07 3808 7777 for a confidential discussion.