By drawing this contract, you can ensure that your and your partner's interests are protected, responsibilities are divided, and legally recognized. Although it is typical for a notary to draft this agreement or contract, it is only deemed necessary if the couple intends to enrol in a partner pension scheme.
The contract resolves certain matters and makes consensus on topics like:
the costs of caring for and raising children;
Who keeps the property if the relationship ends;
There are two ways to draw a cohabitation contract - draw it with your partner or have a notary draw it up for you. It is advised to make the notary draw an arrangement for you in case of unnecessary mistakes, and they can explain complex terms.
Only a limited portion of the inheritance is free from inheritance tax without a cohabitation agreement. On the other hand, if you have a cohabitation contract, a more substantial part of the inheritance is exempt from taxation, and any amount above this threshold is taxed at a lower rate of 10-20%.
In short answer, yes. A cohabitation contract is subject to the general contract law and has legal effect. This contract affects legal aspects like income tax, social security deductions and benefits.
Cohabitation agreements differ from marriages or civil partnerships in several ways:
No automatically allocated rights: unlike marriage or civil partnerships, where certain rights and obligations are automatically established, a cohabitation agreement only agrees on these rights if specifically said within the contract. In other words, there is no common property unless you specify it in the agreement.
A cohabitation contract does not mean you are officially registered as a civil registry partner. In the unfortunate event of your partner's passing, the death certificate will not list you as the deceased's partner.
Although it's not mandatory, drawing a cohabitation contract has benefits, especially in the unfortunate event of death. The contract agrees on who is responsible after paying off the mortgage. Without this contract, the surviving partner may not have legal rights to inherit. If you do not have a cohabitation contract, the most important impact is that many pension funds (e.g. surviving pension) won't allow you to register your cohabiting partner.
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