Creating a Cohabitation Agreement in Australia: A Step-by-Step Guide

It’s common for couples to live together without being married, but it’s essential to protect your financial interests in case the relationship ends. A cohabitation or de facto prenup agreement can help you outline your financial arrangements and avoid disputes later. Here’s how you can create a cohabitation agreement using a DIY kit.

Learn more about de facto relationships and why a financial agreement can help protect your financial future.

Starting the Process

To begin creating your cohabitation agreement, you should:

1. Gather essential information;
2. Understand your rights and options;
3. Explore potential solutions to disputes;

If you have a clear idea of how you want to manage your property and finances, drafting your cohabitation agreement before involving solicitors can significantly reduce your legal fees.

What Is a Cohabitation Agreement?

A cohabitation agreement (more correctly known as a Financial Agreement 90UC) is a legal document between unmarried couples living together, detailing how their property and assets will be managed, both during the relationship and if it ends.

Using a DIY Cohabitation Agreement Template

In Australia, you can use a DIY template to draft your cohabitation agreement, provided you obtain the required legal advice before signing the document. It’s crucial that the template covers everything necessary for the agreement to comply with Australian law, so ensure you source it from a reputable provider.

There are 5 steps to putting a de facto agreement in place using our template kit.

Key Sections of a Cohabitation Agreement

A comprehensive cohabitation agreement typically includes:

1. Introduction: Identifies both parties involved.
2. Recitals: Provides context about the relationship, including its duration and key events.
3. Assets and Liabilities Schedules: Lists the property owned jointly or individually by the parties, along with their respective values.
4. Property Division Instructions: Details who will receive each asset and liability.
5. Arrangements for Property Transfer: Explains the process for transferring property ownership.
6. Financial Support Clauses: Outlines any financial support or maintenance arrangements between the parties.

Recitals

Recitals in a de facto agreement offer pertinent facts about the relationship, such as:

• The dates when the relationship began and any significant milestones.
• Information about children, including their names, dates of birth, and current care arrangements.
• External factors impacting the agreement, such as debts or legal matters.
• Each party’s employment status and regular income.

Assets and Liabilities Schedule

This section is a detailed list of all assets and debts both parties possess. It should include:

• Real estate, vehicles, bank accounts, investments, businesses, and personal belongings.
• Debts such as mortgages, loans, and credit card balances.

Full disclosure of all assets and liabilities is crucial for the validity of the agreement.

Dividing Property and Assets

Couples can either let the court decide on the division of property and debts or make their own arrangements through a cohabitation agreement. Your agreement should cover:

• The fate of the shared home.
• Division of proceeds from the sale of property or buy-out arrangements.
• Allocation of other properties like cars, furniture, and bank accounts.
• Financial support provisions, if applicable.

Do I Need Legal Advice?

While using a DIY template is a cost-effective way to draft your cohabitation agreement, it’s essential to get independent legal advice before signing. This ensures the agreement is legally binding and protects both parties’ interests.

Why Not Use a Solicitor Instead?

Relying solely on solicitors can escalate tensions and lead to high legal costs. A DIY approach allows you to negotiate directly with your partner, potentially saving thousands of dollars in legal fees.

Free Templates vs. Paid Templates

Be wary of free templates from overseas websites, as they may not meet Australian legal standards. Using a reliable, Australia-specific template ensures your agreement is valid and enforceable.

Ready to take control of your future? Learn more about our cohabitation agreement template kit and start drafting your agreement today.