When two individuals decide to enter into a de facto relationship, they may or may not have the intention of becoming financially involved with one another. However, as the relationship progresses, it`s important for both parties to consider the financial implications of their commitment.
Forming a financial agreement in a de facto relationship can help to clarify the responsibilities of each party and protect both individuals from potential misunderstandings and disputes in the future.
Firstly, it`s important to understand what a de facto relationship entails. Generally speaking, a de facto relationship is defined as a domestic partnership between two individuals who are not married or in a civil partnership. It can involve cohabitation, sharing financial resources and assets, and other aspects of a committed relationship.
One of the key reasons to create a financial agreement in a de facto relationship is to protect assets that each party brings into the relationship. For example, if one individual has significant savings or investments prior to entering into the relationship, a financial agreement can specify how those assets will be treated in the event of a separation or breakup.
Similarly, a financial agreement can help to clarify how expenses will be shared between the two parties. This can be particularly important if one individual earns significantly more than the other, or if one individual has other financial obligations such as child support or debt repayment.
In addition to protecting assets and clarifying financial responsibilities, a financial agreement can also address issues such as inheritance and estate planning. For example, if one party has children from a previous relationship, the financial agreement can specify how inheritance and other assets will be dispersed.
Creating a financial agreement in a de facto relationship may not be the most romantic aspect of commitment, but it can be an important step in protecting both parties` financial wellbeing. Consider speaking with a legal professional to ensure that your financial agreement is comprehensive and enforceable.