More and more couples are choosing to live together in a ‘factual’ cohabitation.
Although this offers flexibility (marriage or registered cohabitation involves some formalities), this form of cohabitation carries legal risks that are often overlooked. What happens if the relationship ends, or one partner passes away?
This blog outlines the most common issues and highlights some solutions to help those in factual cohabitation better protect their rights and avoid uncertainties.
Formal and Informal Cohabitation
Belgium essentially has three types of cohabitation, with marriage and legal cohabitation being the most well-known.
At the beginning of a relationship, couples often choose a third form: factual cohabitation. This means a couple shares a household without any official status.
While this is often a step toward more formal arrangements, couples can also maintain long-term relationships without official forms of cohabitation.
Disadvantages of Factual Cohabitation
However, factual cohabitation has its disadvantages. For instance, there is a lack of legal protection. Unlike married couples, those in factual cohabitation do not have statutory rights or obligations toward each other.
This can lead to complications when dividing property or making financial arrangements after a breakup. Here are two simple examples:
Marcus and Claudia are madly in love, rent an apartment together, and adopt Nero—a cute shelter dog they both care for. However, as their relationship deteriorates, they decide to part ways. Who has the right to keep Nero? What if both Marcus and Claudia want to care for the dog?
Businessman August and artist Julia have been living together for over twenty years, and their infatuation has turned into deep affection. Recently, August painted several works inspired by their shared warm moments. But then Julia dies unexpectedly. Can August claim ownership of the paintings, which clearly bear Julia’s name? Does he have any rights at all?
As these situations illustrate, joint purchases or verbal agreements often provide insufficient protection. So, what are some practical solutions?
Tips and Solutions
The Cohabitation Agreement
One of the best ways to protect your position is to draft a cohabitation agreement. This contract outlines the management and division of joint property, each partner’s financial contributions, and how expenses will be shared.
A cohabitation agreement provides the following benefits:
- Clarity in case of relationship termination: It prevents disputes over who gets what and what rights partners have after a breakup.
- Investment protection: The contract can specify that investments in the family home or other joint assets will be reimbursed upon departure or relationship termination.
Testamentary Protection
While a cohabitation agreement can address many issues, it does not provide protection in the event of death. Therefore, it is advisable to make testamentary arrangements. This may mean including each other in a will to secure the rights of the surviving partner. Testamentary provisions can:
- Provide inheritance security: Partners without a formal status do not automatically inherit from each other. A will ensures that heirs are not unexpectedly excluded.
- Ensure financial stability: This helps the surviving partner to continue without severe financial consequences.
Other Legal Arrangements
Couples may also consider additional agreements, such as a growth clause. This means that in the event of death, the ownership of jointly purchased assets automatically goes to the surviving partner. This clause can apply to joint property like a home and provides tax advantages, as it is regarded as a purchase rather than a gift.
Putting Solutions into Practice
Such solutions require clear agreements and joint decisions to safeguard each other’s position.
Couples would do well to consider their future together and determine which measures best suit their situation. By taking conscious steps now, unexpected legal issues and financial uncertainties can be avoided in the future.
Vanbelle Law Boutique is here to assist you in this process and work with you to find and develop the most suitable legal and fiscal solution.
Hugo G.T. Decker
Junior Associate
