PRENUPTIAL & BINDING COHABITATION AGREEMENTS
Did you know that there are proactive steps you can take at the commencement of a relationship or marriage that will effectively quarantine your assets and those of your partner, allowing for an agreement with regard to the division of those assets should the relationship break down. These agreements, known as binding cohabitation agreements, allow the parties to a relationship to give consideration to their individual financial circumstances and those of their partner when looking at either moving in together or getting married.
When thinking about a prenuptial or cohabitation agreement some things you may wish to give thought to are:
- Do you wish to protect your assets that you hold at the commencement of the relationship from a claim by your partner?
- How do you intend to deal with assets that are accumulated during your relationship and jointly owned?
- How do you deal with joint funds being paid to meet a mortgage during your relationship, even if one party owns the property?
- Do you need to, or want to make a provision for spousal maintenance?
- Do you intend to keep your finances separate during your relationship?
- Do you want the agreement to last for the entire relationship or only for a certain period of time?
- Will you need to review the agreement on occasion in the event of certain events?
- How are you going to divide the property if you separate eventually?
While some people think that such an agreement has no place in a relationship built on love, trust and respect, others, and particularly those that have gone through previous relationship breakdowns, feel that it spares both parties from the stress and acrimony of possible future property proceedings.
If you are going to consider such an agreement, first of all you have to have a very frank conversation with your partner. An open discussion on all of the financial circumstances of both parties is required and you may need the assistance of an independent legal advisor or even a mediator to resolve any fine points of the agreement.
Once you have reached agreement you should have a solicitor draft the document which must contain a complete statement of all of the parties’ assets, liabilities, financial resources, income and expenditure, plus a declaration from each parties legal advisor that they have received independent legal advice.
It is important to note that if full and frank disclosure is not made by each party the agreement could be set aside based on incorrect information which misleads the other party.
Another reason a Court could set aside a binding pre-nuptial or cohabitation agreement may be that by putting the agreement into effect it will give rise to a substantial injustice to one party. Or in the event that there is children involved, that the party with the caring capacity for the children would suffer hardship if the agreement is not set aside.
If you wish to discuss pre-nuptial or binding cohabitation agreements in more detail please contact one of our solicitors. The cost of these agreements will vary depending on each party’s individual circumstances and the complexity of each party’s financial circumstances.