Cohabitation agreements 'becoming popular' with de facto couples

Date: May 17, 2011

Co-habiting unmarried couples may wish to sign a document similar to a prenuptial agreement to protect their assets, one relationship coach has asserted.

Speaking to ABC 7, Dr Anne Renee Testa commented that during the last two decades, it has become increasingly popular for unmarried people to live in de facto relationships.

And in the event that this type of relationship breaks down, she advises that a cohabitation agreement can be one way for unmarried couples to divide their assets.

This type of legally-binding document can be as simple or as complex as the couple requires and can cover details including health insurance, property and finances - including debt.

Ms Testa told the news source that cohabitation agreements should be considered as a sign of the times, as setting out the terms of their relationship in writing "clears the air".

A couple can use this type of agreement to outline their expectations and make plans for what would happen if the relationship ends - either if the pair decide they do not want to live together anymore or if one member of the couple unexpectedly dies.

Ms Testa commented: "It's not about one person controlling the other. It's not about feeling as though the romance is taken out of it."

She added: "If anything, they should go out and have a glass of champagne afterwards and celebrate."

A family lawyer can advise on a number of important issues surrounding cohabitation and prenuptial agreements.

There are a number of situations where this type of agreement could be advisable, explained certified financial planner Holly Nicholson.

Contributing to the News Observer, she identified circumstances where one partner carries a significant amount of debt, one member of the couple has significantly higher earnings than the other, one party owns their own business or when dependent children from a previous relationship are involved as popular reasons to draw up a prenup.

Ms Nicholson commented that planning a cohabitation or prenuptial agreement with your partner should be a frank discussion of your complete financial situation.

Money issues are an important topic of conversation regardless of whether or not you choose to draw up a formal agreement, she pointed out.

Areas for discussion are debts - including student debt - as well as credit scores, general saving and spending habits and any repayment plans both individuals have in place.