Five reasons to make prenuptial and cohabitation agreements

Couples planning to marry or to live together are usually caught up in the romance of the moment and the wondrous prospect of a life together. This is what makes the world go round and should not be discouraged or diminished.

Statistics tell us, however, that approximately 50% of first marriages and significantly higher percentages of second and subsequent marriages end in divorce. The figures for marriage like or de-facto relationships are less reliable, but there is every reason to believe that the incidence of breakdown is at least as high as for marriages.

There are very good reasons for certain couples about to move to a new stage of togetherness to consider making a prenuptial or cohabitation agreement.

1. With the average age to marry increasing and with many partners having previously been married or in marriage like relationships, it is common for one or both to bring significant property assets into the relationship. A properly prepared agreement can protect these assets.

2. Many partners need to consider children from previous relationships. An agreement may protect the financial interests of these children well into the future.

3. It makes sense to negotiate financial matters at a time when trust is high and arguments rational and logical rather than tinged with the illogicality, intransigence, grief, loss, guilt and bitterness that often accompany relationship breakdown.

4. Discussing financial matters before making a major commitment into the future can be enlightening as to each partner's attitudes and values. In the course of negotiating an agreement, there will either be a resolution which takes the pressure off the relationship or a decision that this union might not have been the best idea after all. There is a lot of truth in the old adage, "Better now than later".

5. Preparation and planning in the form of a prenuptial or a cohabitation agreement may, through clarification of where each partner stands financially, reduce unrealistic expectations and increase the sustainability of the relationship. In the unfortunate event that the relationship does end, however, such agreements can significantly reduce the emotional anguish, financial uncertainty and cost of a property settlement.

Because negotiation of prenuptial or cohabitation agreements occurs in a unique romantic context, mediation provides an ideal process. Mediation is less divisive and more user friendly, placing significantly less stress on fledgling relationships.

Legal advice remains vital and opinions on the implications of the agreement for each should be sought from suitably trained and experienced lawyers before the mediated agreement is signed.

Denise Britton - Co-Principal Brisbane Mediations