Even if you move in together for purely romantic reasons, you should still try not to lose sight of a number of practical matters. The cohabitation contract is already a big step in the right direction. However, there’s still quite some arrangements to make in the financial field. Which property and accounts are jointly owned by the partners, and what are each of your individual belongings?
Cohabiting and will
As stated above, a cohabitation contract allows you to arrange a lot, but not everything. It would be a good idea to also draw up a will. One of the things to include is what will happen to private property owned by one of the partners, such as savings.
The cohabitation contract - when it is done right - will already stipulate that ownership remains with each of the partners individually so as to make sure that, in the event of divorce, the partner in question continues to be the owner. However, if you want your partner (instead of your family) to inherit your possessions when you die, you will need to make a will to that effect. Cohabiting does not automatically mean that you will inherit from each other when one of you dies, as is the case if you are married or in a registered partnership.
By including a survivorship clause in your cohabitation contract you can avoid certain problems. It implies, for example, that the surviving partner has access to the balance of your joint (savings) account(s).
Incidentally, just like married couples and registered partners, cohabitants can also qualify for the high exemption from inheritance tax. This means that the first €633,014 (2015) inherited by the partner is exempt from inheritance tax. This is another good reason for drawing up a cohabitation contract, because it makes cohabiting partners eligible for the high exemption after just six months. Without a cohabitation contract, it will take five years.
Living together and housing
In the cohabitation contract, you can specify the proportional ownership of a home that you bought together. Suppose one of the partners invests more savings in the house. You can specify in the contract how this will be settled should you break up. If the house is owned by one of the partners, the cohabitation contract may stipulate that the other is entitled to a certain settlement on the surplus value built up by both of you should the relationship end.
Living together and household costs
The cohabitation contract describes what will be considered household costs and who is going to pay them. Partners usually agree that the costs will be shared proportionally to the net income. This also means that if one of the partners has no income, the other pays all the costs of the household.
Living together and household contents
You want to keep some items private to avoid having to distribute them at the end of the relationship. It is best to add a list to your cohabitation contract stating what items each partner has contributed (e.g. a TV, expensive sofa, etc.). Make a will stating who will get what upon your death.