Can someone explain these in basic english to me
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26-06-2023 11:45pm#1
13. Succession/Inheritance
The Parties agree and acknowledge that
a) They waive any right to a share in each other’s estate and they acknowledge that each of them shall be at full liberty to dispose of his or her property and the affects whether by Will, Codicil or other testamentary disposition as he or she may think fit
OR
b) The Parties agree and acknowledge that they shall respectively execute a Will devising to the other a one-third share in their estate
OR
c) Neither party shall apply for an Order for provision out of the estate of his or her cohabitant under Section 194 of the Act
d) Any such waiver shall not preclude an application by a surviving cohabitant for temporary maintenance based on the period of cohabitation of the Parties
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Comments
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Few questions:
- What document is this extracted from?
- Who are the parties, and why are they considering signing this document?
- Are the parties related to one another? How?
- Is one of the parties proposing this document to the other? Why?
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- What document is this extracted from? - Cohabitation Agreement
- Who are the parties, and why are they considering signing this document? - Both parties in a non marital relationship, one party owns a house, other doesn't, other party moving into house. protection of assets on both sides.
- Are the parties related to one another? How? - Not yet, possibly in future
- Is one of the parties proposing this document to the other? Why?- both agreed
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OK. Couple of comments:
- It's not well-drafted. i don't blame you for being confused by it. Obviously, neither of the parties should sign a document that they don't understand.
- Where did it come from? Has a professional adviser suggested it, or did you find it floating around on the web?
- The right cohabitation agreement (or any kind of agreement) for the parties has to depend on what they want, what they intend, what their objectives are. A cohabitation agreement that they found floating around on the web was drafted for someone else's wants, intentions and objectives; not theirs. I wouldn't say it's completely useless, but you shouldn't treat it as more than, say, something that will call your attention to issues that you might not have thought about and that you need to think about.
- Working out what the parties want, intend, what objectives they have is not easy, partly because the process will raise a lot of questions that they may not so far have thought about very much or at all, and partly because what each of them wants, intends, etc may not be the same. One of the functions of the cohabitation agreement is to document their agreed position, but for that to happen they have to have an agreed position. So identifying the relevant issues, talking them through, working them out and reaching agreement on them is essential work that has to be done before you look at signing a cohabitation agreement.
- Clause 13, that you have posted, raises the issue of what inheritance rights (if any) the parties will have as against one another. It offers alternative positions in paragraphs (a), (b) and (c); I think the idea is that before signing the document you cross out two of those three paragraphs, just leaving the one you want (or cross out all of them and write a paragraph that reflects what you want). Paragaraph (d) is not a fourth option; it's intended to supplement one of options (a), (b) and (c), but it's not clear from the wording which one. It may be intended to apply regardless of which option is chosen but, if so, it is very poorly worded.
One final point. In Ireland, a cohabitants agreement of this kind is legally valid only if (a) each of the cohabitants has received independent legal advice before entering into it, or (b) the cohabitants have taken joint legal advice before entering into it, and have waived their right to independent advice. So, if you just found this floating around on the web, so to speak, even if you sign it it will be of no legal effect; you have to get professional advice. And when you do get professional advice, well, your adviser(s) will help you with the process of working out what it is you need and want, and will draft and, if necessary, explain to your satisfaction the terms of a cohabitants' agreement that meets your joint objectives.
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It seems like two people proposing to live together are trying to use a separation/ divorce template to draw up an agreement. Even a cogent explanation of the meaning of the words used is not going to help the o/p. The o/p's requirements in the scenario of a co-habitation agreement are radically different to those of a separation or divorce. Both parties need separate independent legal advice from an insured professional. They are not in DIY territory!
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Thanks for replies so far guys:
I received the document from my own solicitor, I’m just trying to understand the sections before I go back with the requirements I want here.
We both have our own legal counsel, and this will go through the correct process.
We also know what we want from this, i.e. I need to make sure the property or pension cannot be claimed and she the same with her car (that’s all she has in terms of fixed assets).
Of course, all this will change in the future, but we know a lot of people going through dirty separations currently and this is preventative maintenance.
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The snappily-titled Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 Part 15 does confer - as the title of the Act suggests - certain rights and obligations on qualifying cohabiting couples. And it does provide, in s. 202, that a cohabiting couple can, on certain conditions, "enter into a cohabitants’ agreement to provide for financial matters during the relationship or when the relationship ends, on death or otherwise". And their agreement can have effect "notwithstanding any enactment or rule of law" — i.e. it can prevail over the standard rights and obligations imposed by Pt 15.
And the extract posted in the OP looks like an extract from a model cohabitants' agreement — the reference to s. 194 tells me that, since s. 194 is the provision giving cohabitants a right to apply for provision out of one another's estates.
(Whether it's a good model agreement, or whether it's a rehashed version of a standard separation agreement I cannot say. I've only seen the one clause. As already mentioned, I don't think the drafting would win any plain language awards.)
You should be aware — no doubt your solicitor has made you aware — that cohabitants' agreements are not absolute. A court can vary one or set it aside "where its enforceability would cause serious injustice".
I mention this because its clear that there is considerable economic disparity between the two of you. You own property and a pension which, you might reasonably hope, will appreciate in value as the years go by; she owns only a car which in a few years will be worthless. It's clear that she is the economically vulnerable partner, with potentially much to lose if your relationship endures for some time, and then ends. Much depends on what happens between now and then — does she make choices or life changes in reliance on the relationship that diminish her earnings or impair her capacity to build wealth? — but, when you say that you want to "make sure" that she cannot claim your property or pension, you need to be aware that you cannot make absolutely sure of this. The cohabitation agreement may be varied or set aside.
That's not to say that it's useless. The longer your cohabitation continues, the more likely it is that facts will change, developments will occur, etc that make its terms inappropriate to your circumstances, and the greater the risk that, when the time comes, it will not be enforced. But if your relationship ends after a relatively short time when both your circumstances are much as they are now then there is very little chance that it would not be enforced. And, of course, if after a couple of years you transition from cohabitants to spouses, your agreement has no relevance after that. (I note that you say the parties might possibly be related in the future, which I take to mean that you might marry.)
So, as to the draft provisions of cl. 13:
You need to think what should happen in the event that you die while this relationship continues. (I'm assuming here that you will both be living in the house that belongs to you alone.) Should your partner have to leave your house so that it can be sold and the proceeds distributed to your brothers and sisters, or other family members? Should your house be left to her? Should she have a lifetime right of residence in the house, with eventual sale when she leaves or dies for the benefit of your family? Something else?
And you could raise similar, if less pointed, questions in relation to the rest of your property.
Different couples will answer these questions differently, depending on their circumstances and on the way they see their relationship. An older couple, both of whom have had previous relationships and perhaps have children from those relationships, and both of whom already have some wealth, might decide to keep their estates entirely separate, each leaving all their property to their existing family. Or they might decide to do that, except for the home they share, which will go to the survivor of them. Or some variation that. Whereas a couple with no existing family commitments or obligations, and perhaps not much wealth between them, might decide the opposite; they will each make a will leaving everything to the other, which they will agree not to revoke or alter unless the relationship ends. Or, they might agree the opposite, if they both see their relationship as relatively casual or provisional or transient.
So, this is something you need to think about, and then its a conversation you and your partner need to have. What goes into cl. 13 will depend on the outcome of that conversation.
Draft para (a) is suggested for the couple who are going to keep their property and financial affairs entirely separate and who agree to leave nothing to each other.
Draft para (b) might be appropriate for a couple who do want to look after one another in the event that one of them dies, but who also have obligations to existing families.
Draft para (c) is not really alternative to (a) or (b), but might be something you would want in addition. Under s. 194 of the 2010 Act, if one cohabitant dies, the other can apply to court to get some part of the estate. If the court thinks that the deceased cohabitant hasn't made proper provision for the survivor and that this is unjust, it can award whatever it thinks appropriate. Draft para (c) would rule out a court application of this kind, based on the fact that the couple will make what they agree to be appropriate provision for one another, as reflected in para (a) or (b) or some variation of them.
Draft para (d) would be an exception to draft para (c) — "you can't apply for a share of my estate, but you can apply for temporary maintenance for a period after my death; e.g. a right to live in the house for 12 months, and to get a continuation for 12 months of whatever regular financial support you were getting from me before my death". That's the kind of practical arrangement that might need to be made when one partner dies unexpectedly.
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Thanks Peregrinus for your very clear explanations here. It’s very informative for all of us. I appreciate them hugely.
Thanks, likewise, to claw hammer.
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