Typically, your grandmother raised her children while completely dependent on her husband’s income. Fast forward just two generations and meet the cashed up Millennial woman. You are successful and hesitant to put your hard-earned assets into the “communal pot”, especially if your first choice is living together, over a traditional marriage.
Enter, the era women demanding a de facto pre-nup – or a Cohabitation Agreement as Australian law calls it.
What is a Cohabitation Agreement?
A cohabitation agreement is a Binding Financial Agreement made under the Family Law Act. The goal of a Cohabitation Agreement is to contract out how the court will divide up property should the relationship dissolve. It means that the couple get to negotiation and decide how to divide property on their own terms. Note that the laws may differ from state to state, so it’s vital to speak to a lawyer before you move in together.
“In just a few generations, women have gone from being largely dependent on their husband’s income for survival, to opting to remain unmarried and enjoying their own financial success. The culture may not yet have caught up. Women need to have more conversations around their financial security.” Said Jennifer Hetherington, a Divorce Lawyer in Brisbane.
Why you can’t just ‘agree’
A Cohabitation Agreement only becomes legally binding in Australia if both parties have sought legal advice before signing. A family lawyer must provide evidence that they’ve provided you with that advice. You can’t just draw this up together.
* What are communal assets and what will remain separate from “the communal pot”
* Future inheritances
* What will happen to joint assets
* Provisions for future changes of circumstance (births, deaths etc)
Changing the conversation
Pre-Nup – one little phrase that once put a grinding halt on wedding plans. A pre-nup was once code for “my future spouse doesn’t trust me, my fiancée thinks I may be a gold digger”. Raising the idea of a cohabitation agreement may feel like you’re putting your relationship at risk. Organisations like WIRE have been encouraging women since the early 80s to re-examine how you see “your money” and how you enter into financial agreements. And, while it’s not written on your average greeting card, a romantic relationship brings legally binding financial agreements. It’s time to discuss it openly to help change the way Australian culture sees women’s finance.