Financial Agreements

Cohabitation Agreements (also known as “pre-nups” and “lifestyle agreements”) are a type of Binding Financial Agreement.

The general purpose of these agreements is to legally bind the parties to a relationship or marriage as to how they are going to conduct themselves financially.

They are also intended to pre-plan how finances are to be split in the event of 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.

Some agreements also include a “fidelity” clause. This type of clause is becoming more common as the perception of the rates of infidelity rise.

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 breakdown.

A Will is not sufficient to protect what you have financially for your children in the event of 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”.

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 are financially worse off, it may have been to your advantage in hindsight not to have signed a Cohabitation Agreement.

It is usually the “better-off party” who wants one of these Agreements, to protect what they have from division with the other party should the relationship or marriage break down.

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