Living together, an important new step in your life. For unmarried cohabitants, the law contains almost no rules. The rules that do exist almost all relate to tax laws. If you want to record that your relationship does encompass a bit more than that which exists between two friends, you can do so in a cohabitation contract. Generally, a cohabitation agreement only covers financial matters, assets, debts and pensions. You can choose to agree on many more things.
Communal or private
With cohabitants, both keep their own assets and debts. Only if you explicitly agree otherwise will possessions and/or debts become common. For example, you can agree that the contents of the house are communal. You can also think about making agreements on the division of the household costs. Will everyone contribute equally, or do you divide the costs in proportion to income, or in some other way?
What does and does not belong to the income?
In a cohabitation contract, you can also partly agree on what should happen to the joint property in case of death of one of the two. Without a cohabitation agreement, the family of the deceased gets half of the joint property. Furniture, for example, or money. Often, this is undesirable. Because your partner may want to keep the possessions for himself. With a cohabitation agreement with a residence clause, this can be arranged. Apart from those internal agreements, a notarised cohabitation contract can also offer many other advantages. Consider, for example, the inheritance tax exemption and rate. Cohabitants with a notarised cohabitation contract have an exemption of over €650,000 and the same rate as married couples. If you have a cohabitation contract, it does not mean that you are automatically each other's heirs. For married couples and registered partners it does, unless they deviate from this by will. If cohabitants want to name each other as heirs, they must document this in a will.
Pension
In addition, pension funds often require a notarised cohabitation contract if you want to designate your partner as beneficiary for the partner's pension. The partner's pension is a survivor's pension paid by the pension fund to the deceased's partner. In the cohabitation contract, you can also determine whether you want to share your retirement pension with your partner.
A common confusion is that a cohabitation contract would be the same as a registered partnership, but this is not the case. You enter into a registered partnership at the civil registry and it has almost the same consequences as marriage. With a cohabitation contract, this is not the case. For example, a cohabitation contract does not create a community of property, whereas registered partners do. For cohabitants, only joint purchases or debts incurred jointly become common. If there are children, a cohabitation contract can offer another advantage. If you stipulate in your will that upon your death (a large part of) your assets should go to your partner, the children can claim their legitimate portion if there is no cohabitation contract. If there is a cohabitation contract, the will can stipulate that the children's legitimate portion is only claimable upon the death of the surviving partner. This way, the surviving partner can continue living undisturbed.
For more information on drawing up a cohabitation contract, please contact us. We will be happy to advise you.
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