Avoiding Break-Up Fighting Over Property With Life Partner: A Layman's Guide
As the saying goes, "An ounce of prevention is worth a pound of cure." This couldn't be truer for couples who live together. While sharing a home can be wonderful, things can get messy if the relationship ends, especially when it comes to who gets what.
Unfortunately, there's no such thing as a "common law marriage" in our legal system, a persistent myth that often leads to heartbreak and hefty legal bills. This means that if you're not legally married, you don't automatically have rights to your partner's property, even if you've been together for years.
The Pitfalls of Not Planning Ahead
Imagine a couple living happily in a house owned by one of them. They decide to expand, and the other partner chips in a significant amount of money for the renovations from their pension. Five years later, the relationship sours. The contributing partner then tries to claim a share of the house, arguing they had a "universal partnership" – a legal term for a shared venture where assets are pooled for profit.
In a recent court case in Limpopo, this exact scenario played out. The man who contributed to the house renovation lost. Why? Because he couldn't prove that he and his partner had actually agreed to share their assets and make a profit together. Even though they shared expenses and he paid for a big chunk of the renovations, the court saw it as nothing more than two people cohabiting. He walked away with nothing but a large legal bill.
What does this mean for you?
- It's your job to prove an agreement: If you want a share of assets, you need to show that you and your partner had a clear agreement to pool your resources.
- Proof is key: This agreement doesn't have to be in writing, but proving a verbal agreement or one based on actions is incredibly difficult and often leads to disputes. Without a written agreement, it's a recipe for misunderstandings.
- Living together isn't enough: The court emphasized that simply living together doesn't give you a right to your partner's property.
Your "Ounce of Prevention": The Cohabitation Agreement
All that stress, heartache, and legal expense could have been avoided if the couple had simply put a cohabitation agreement in place when they first started living together.
Don't make the same mistake! A cohabitation agreement is a document that clearly outlines who owns what, who is responsible for what, and what will happen to your shared life if your relationship ends. It's not about planning for failure; it's about protecting both of you and ensuring a fair outcome if things don't work out. It actually increases your chances of success by providing clarity and reducing potential conflict.
Here's what you should consider including in your agreement:
- Start Date: When did your relationship officially begin, or when does this agreement take effect?
- Asset Ownership: Clearly list who owns what, both before and during your time together (furniture, cars, investments, etc.).
- Debts: Who is responsible for which debts?
- Your Home:
- Who owns or rents the house?
- Who will pay the bond or rent?
- Who will cover upkeep, major repairs, or extensions?
- Shared Expenses: How will you split ongoing household costs?
- Bank Accounts: If you have joint accounts, how will they be managed?
- Businesses: If you run businesses together or separately, how will contributions, profits, and management be handled?
- Children: How will you handle financial support and schooling for any children?
- If the Relationship Ends:
- How will you officially end the agreement?
- Who gets which assets?
- Who is responsible for which debts?
- How will any shared businesses be wound down?
- Will either of you be entitled to ongoing financial support from the other (like spousal maintenance)?
- What happens regarding your children's financial support, parental duties, and contact rights?
- Dispute Resolution: Include a clause on how you'll resolve disagreements if you can't agree on something.
- Anything Else: Your situation is unique, so brainstorm any other specific points, like who gets the pets.
Don't Forget Your Will!
It's also crucial to create or update your Last Will and Testament at the same time you draft your cohabitation agreement. These two documents go hand-in-hand and should align with each other. A cohabitation agreement even comes into play if one of you passes away, ensuring your wishes are clear.
The bottom line: If you're living with a partner, protect yourselves by having both a cohabitation agreement and up-to-date wills. These documents provide peace of mind and can save you a lot of heartache and expense down the road.