Cohabitation contract

In our experience, the majority of young cohabitants have not signed a cohabitation contract. Most of them are also unaware of the financial consequences of a break-up.

Unfortunately, relationship breakdown is a reality you have to deal with. For many couples, finances and the division of wealth and assets in the event of a break-up is a taboo subject that can be difficult to deal with. That's why it's a good idea to have a cohabitation contract that regulates these matters. In the event of a break-up, many people will probably find that disagreements and a high level of conflict will stand in the way of a solution.

A cohabitation contract can also help you during your cohabitation by regulating the ownership relationship between you, especially if one of you buys into another's home.

It can be a good idea to get advice from an objective and independent third party when drawing up the contract. Particularly in cases involving large assets, such as a house, car and apartments, but also if you have children together. The more assets and the greater the value, the greater the benefit of having a third party quality assure the content of the agreement.

These are some of the conditions that can, or in many cases should, is regulated in a cohabitation contract:

• Ownership shares for residential and holiday properties, cars and other valuables. Future acquisitions can also be regulated, e.g. the increase in value of the home.
• Debt liability. Who is responsible for repaying the debt? Is the fraction other than 50/50, and perhaps one party has contributed more equity than the other?
• Savings and insurance. Do you have a joint savings account? Should you both have access to this? Who is responsible for joint fund investments?
• If one of the partners stays at home or has a reduced workload, it may be a good idea for this partner to arrange compensation in the event of a break-up. Also remember that you will not earn as much pension as the partner who is in full-time employment.

In principle, the parties are free to choose what should be included in the agreement. The most important thing is that the ownership and distribution in the event of a break-up are regulated.

As a general rule, cohabitants do not have the right to inherit from each other, unless you have or are expecting children together. Consequently, there is no legislation that regulates property or inheritance rights for cohabitants. This makes it all the more important that you draw up a cohabitation contract. If you wish to inherit from each other, this can be done through a mutual will. As shown above, you as a cohabitant can quickly experience unreasonable financial consequences of a relationship breakdown if debt responsibilities and ownership are not clearly clarified. Cohabitation contracts are therefore an inexpensive precaution, considering the financial risk many people face in the event of a future break-up.

Contact us for assistance in drawing up a cohabitation contract by phone 64 84 00 20 or [email protected]