Co-habitation agreements

Most people have heard of pre-nuptial agreements, a legal mechanism to predetermine what persons will receive as a financial settlement upon the breakdown of a marriage. Although same-sex couples cannot legally marry in this country, and overseas same-sex marriages are not recognised, a legal mechanism similar to pre-nuptial agreements is available to same-sex couples.
The Property (Relationships) Act 1984 is New South Wales legislation which deals with financial settlements upon the breakdown of de facto relationships, or domestic relationships. This includes same-sex relationships. Before a relationship is considered a de facto relationship, a number of factors apply. This may include living with one another, sexual relations, the sharing of finances, socialising with one another, and presenting each other to society at large as a couple.
As with marriage relationships, same-sex couples can enter into agreements which regulate their financial affairs, and predetermine how their property and finances are to be divided upon the breakdown of the relationship. The Property (Relationships) Act 1984 provides for such a mechanism, referred to as a “cohabitation agreement”.
A cohabitation agreement can be entered into at any time during a de facto relationship. For those people who seek to protect their assets coming into a same-sex de facto relationship, a cohabitation agreement can be entered into at the commencement of the relationship. What provision the cohabitation agreement will make will be entirely up to the parties and is subject to negotiation, although this may be somewhat of an awkward issue to address at the commencement of a relationship, where intentions are positive.
There are some requirements before a cohabitation agreement becomes legally enforceable, such as both parties receiving independent legal advice in relation to the agreement. It is also a good idea for each party to fully disclose their assets, liabilities and financial resources in separate schedules to the agreement.
The whole point of entering into a cohabitation agreement, apart from asset protection, is to avoid any issues concerning separating finances and property upon the breakdown of the relationship. Therefore the agreement needs to be carefully drafted to ensure it will achieve what both parties contemplate, and not lead to any issues having to be resolved at a later time.
Prior to instructing a lawyer to prepare a cohabitation agreement, both parties should have a frank discussion and confirm what they seek to achieve with the agreement, and what provision they want it to make. This will expedite the process of preparing the cohabitation agreement, and hopefully avoid any awkward further negotiation as to its content.
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This is an initiative of the NSW Young Lawyers Human Rights Committee.