Cohabitation Financial Agreements: What You Need to Know
Cohabitation is becoming more common these days, as more couples opt to live together without getting married. While cohabitation can offer a lot of benefits, from increased intimacy and shared expenses to more flexibility in the relationship, it`s important to be aware of the financial risks involved.
One way to protect yourself and your partner financially is to draft a cohabitation financial agreement. This is a legal document that outlines how you and your partner will handle various financial matters, both during the relationship and in the event of a separation.
Here are some key things to keep in mind when drafting a cohabitation financial agreement:
1. Be thorough: The agreement should cover every possible financial scenario that may arise during the course of your relationship. This includes how you will split rent, utilities, and other expenses, as well as how you will divide any joint assets if you decide to separate.
2. Be specific: The agreement should be written in clear, specific language that leaves no room for interpretation. This will help avoid any misunderstandings or disputes later on.
3. Get legal advice: It`s always a good idea to consult with a lawyer when drafting a cohabitation financial agreement. They can help ensure that the agreement is legally binding and enforceable.
4. Update the agreement regularly: It`s important to review and update the agreement periodically, especially if there are any significant changes in your financial situation or relationship dynamics.
5. Don`t forget about taxes: It`s important to consider how taxes will be handled during the relationship and in the event of a separation. This includes things like how joint assets will be taxed and whether you will file taxes jointly or separately.
Overall, a cohabitation financial agreement can provide peace of mind for both you and your partner. By outlining how you will handle financial matters, you can avoid misunderstandings and conflicts down the road. So if you`re considering cohabitation, be sure to talk with your partner about drafting a cohabitation financial agreement.