Marriage or Legal Cohabitation: More Than a Romantic Decision

You have been in a relationship for some time and may be considering purchasing a home together, starting a family or otherwise planning your future as a couple. In that context, the question often arises whether it is preferable to marry, enter into a legal cohabitation arrangement or simply live together without further formalities. At first glance, these three options appear very similar. You live together, share expenses and may gradually build up assets together. Legally, however, there are important differences. These differences become particularly relevant if you separate, purchase a home, one of you passes away, or you wish to provide financial protection for one another. Choosing a form of cohabitation is therefore about more than romance. It largely determines the rights and obligations you have towards one another, as well as the possibilities available to organise your assets and secure your family’s future.

How Can You Marry or Enter into Legal Cohabitation, and How Can These Arrangements Be Terminated?

Marriage

A marriage is solemnised before the civil registrar. From that moment onwards, legal rights and obligations arise between the spouses, both on a personal level and in relation to their property and assets.

Before marrying, you may have a marriage contract (prenuptial agreement) drawn up before a notary. This allows you to make arrangements regarding the administration and division of your assets. In the absence of a marriage contract, the statutory matrimonial property regime applies in principle.

A marriage may be dissolved through divorce. This may occur by mutual consent, where the spouses reach agreement regarding the consequences of the divorce, or on the grounds of the irretrievable breakdown of the marriage. Depending on the procedure followed, intervention by the Family Court may be required.

Legal Cohabitation

Legal cohabitation involves two persons making a declaration of legal cohabitation before the civil registrar of their common place of residence.

This form of cohabitation is not limited to romantic partners. Family members, for example, may also enter into legal cohabitation.

Legal cohabitants benefit from limited statutory protection. Among other things, they are required to contribute to the expenses of cohabitation in proportion to their means, and the family home enjoys specific legal protection.

In addition, the parties may conclude a notarial cohabitation agreement setting out arrangements concerning their assets and life together.

Legal cohabitation may be terminated by means of a joint or unilateral declaration filed with the municipality. In the case of unilateral termination, the other partner must be formally notified by service of a bailiff's writ. No divorce proceedings are required.

De Facto Cohabitation

De facto cohabitation means that you live together without marrying and without making a declaration of legal cohabitation.

No specific formalities are required. Unlike marriage or legal cohabitation, merely living together does not create a comparable legal framework governing the partners’ mutual proprietary relationship.

This provides flexibility but may also create uncertainty. In the event of separation or death, disputes may arise concerning ownership of assets, the allocation of expenses incurred during the relationship or the protection of the surviving partner.

Certain arrangements may be formalised in a cohabitation agreement. However, such an agreement does not offer the same possibilities as a marriage contract and cannot simply override the statutory rights of third parties, such as certain heirs.

What Rights and Obligations Do You Have Towards Each Other?

One of the main distinctions between the three forms of cohabitation lies in the level of protection afforded by law.

In the Case of Marriage

Marriage creates reciprocal rights and obligations, including the duty to contribute to the expenses of the marriage and the duty to provide mutual assistance and support. The law also contains provisions relating to the protection of the family home, the spouses' assets and certain debts.

In the Case of Legal Cohabitation

The protection is more limited. The law provides, among other things, that both partners must contribute to the expenses of cohabitation in proportion to their financial means. There are also rules protecting the family home and a limited regime governing certain debts related to the cohabitation.

In the Case of De Facto Cohabitation

Such statutory obligations do not automatically arise. In principle, each partner remains responsible for his or her own income, assets and debts. Nevertheless, the parties may make agreements regarding matters such as the sharing of household expenses.

This does not mean that de facto cohabitants can never assert claims against one another. Depending on the circumstances, other legal principles or express agreements may apply. There is simply no general statutory framework comparable to that applicable to married couples.

What If You Purchase a Home Together?

For many couples, purchasing a family home is one of the most important financial decisions they will make. The chosen form of cohabitation may significantly affect the legal consequences of such a purchase.

If You Marry Without a Marriage Contract

The statutory matrimonial property regime generally applies. This regime distinguishes between three patrimonies: the separate property of each spouse and the matrimonial community property.

Not everything acquired during the marriage automatically forms part of the community property. Statutory rules determine which assets remain separate and which become community property. The source of the funds used to finance an acquisition may also be relevant.

A property acquired during the marriage using community funds will, in principle, form part of the community property. Different rules may apply where the spouses have opted for a separation of property regime or another contractual matrimonial property regime.

The choice of matrimonial property regime therefore has consequences not only during the marriage but also in the event of divorce or death.

If You Are Not Married

A jointly acquired property generally belongs to the partners in co-ownership. Each partner owns the share specified in the deed of purchase.

For example, if each partner acquires a one-half share, each will own 50% of the property. This remains the basic principle even if one partner later contributes more towards certain expenses, unless legally relevant agreements or other circumstances justify a different legal assessment.

It is therefore important to consider in advance how the purchase price, personal contributions, mortgage repayments and any renovation costs will be allocated.

Cohabitants may also agree in advance on what should happen to the property in the event of separation or death.

Can You Protect Each Other in the Event of Death?

Several legal mechanisms may be used to protect the surviving partner.

An advance contribution arrangement (anticipatory contribution) may, for example, be considered where a couple purchases a property together and subsequently intends to marry. Subject to the applicable legal requirements, such a provision may allow the property to be contributed to the future matrimonial community upon marriage. The precise wording and conditions must be examined at the time of acquisition.

In addition, an accrual clause (beding van aanwas) may offer a solution. This is an aleatory contract whereby the parties agree that the share of the first-deceased partner in a specified asset will automatically accrue to the surviving partner upon the occurrence of the contractually agreed event.

An accrual clause will not necessarily be the most suitable option for every couple. Its validity, the balance of risk between the parties, the specific drafting and its tax consequences must be assessed on a case-by-case basis. Factors such as a significant age difference, the partners' state of health and the method of financing the acquisition may also be relevant.

A will may likewise play an important role, although the rights of forced heirs must be taken into account. Furthermore, a will may in principle be amended or revoked unilaterally.

The most appropriate solution will depend, among other factors, on the nature of your assets, the presence of children, the level of protection sought and the associated tax implications.

What Are the Tax Consequences of Marriage or Cohabitation?

The tax consequences differ depending on whether one is considering personal income tax during lifetime or taxes due upon a gift or death.

Personal Income Tax During Lifetime

Married couples and legal cohabitants are, in principle, treated similarly for personal income tax purposes. Depending on their circumstances, they may be taxed jointly and benefit from certain tax rules applicable to partners.

However, marriage or legal cohabitation does not automatically result in a tax advantage. The outcome depends, among other things, on the income of both partners, the family situation and the applicable tax legislation.

De facto cohabitants are, in principle, taxed separately.

Care should also be exercised in relation to the acquisition of a home. The tax advantages associated with a mortgage loan depend on the applicable legislation and on the date and circumstances of the loan. There is no general tax advantage arising solely from being married or legally cohabiting.

Gift Tax and Inheritance Tax

Important distinctions and points of attention also arise in relation to gifts and inheritances.

For inheritance tax purposes, account must be taken of the legislation of the Region competent for the estate. The conditions under which legal and de facto cohabitants are treated in the same manner as married spouses are not identical across all Regions.

In Flanders, for example, de facto cohabitants may, under certain conditions, qualify for the tax rate applicable to partners. Specific conditions also apply to exemptions from inheritance tax on the family home. The applicable conditions and time limits should always be verified.

Consequently, it is insufficient to consider only your civil status. The duration and factual characteristics of the cohabitation, the nature of the assets involved and the applicable regional legislation may all be decisive.

Moreover, a civil-law solution that appears advantageous may not necessarily be the most tax-efficient. A will, gift or accrual clause may each produce different consequences.

What Happens If One of You Dies?

The distinctions between the various forms of cohabitation become particularly significant upon death. The key questions are not only who owns the assets, but also who inherits them and whether the surviving partner can continue residing in the family home.

Married Couples: Extensive Statutory Protection

The surviving spouse benefits from statutory inheritance rights. The precise extent of these rights depends, among other factors, on the existence of children or other heirs and on the applicable matrimonial property regime.

Where the deceased leaves children, the surviving spouse will generally inherit the usufruct of the entire estate. The children will typically acquire the bare ownership of the assets subject to that usufruct.

In the absence of descendants, different rules apply. Depending on the matrimonial property regime and the existence of other heirs, the surviving spouse may acquire a larger share in full ownership.

Furthermore, the surviving spouse is a forced heir. This means that certain minimum inheritance rights cannot simply be removed by will. The reserved portion consists of the usufruct of one-half of the estate, with a minimum entitlement to the usufruct of the family home and its household contents.

The surviving spouse also benefits from particular protection of the family home during the marriage.

Legal Cohabitants: More Limited Inheritance Rights

Under the statutory rules, the surviving legal cohabitant generally inherits the usufruct of the family home and its household contents.

These inheritance rights are, however, more limited than those of a surviving spouse. A legal cohabitant is not a forced heir. As a result, the deceased may in principle deprive the surviving partner of these statutory inheritance rights through a will.

Legal cohabitants may nevertheless provide additional protection for one another, for example through a will or certain contractual arrangements. In doing so, account must be taken of the rights of other heirs and the applicable tax rules.

Persons who are legally cohabiting should therefore not assume that the surviving partner is fully protected.

De Facto Cohabitants: No Automatic Inheritance Rights

De facto cohabitants do not automatically inherit from one another.

Where one partner dies, the surviving partner acquires no statutory inheritance rights merely by virtue of the de facto cohabitation. A will may offer a solution, although the available options depend, among other things, on the existence of forced heirs.

Other mechanisms, such as an accrual clause or life insurance policy, may also be considered in certain situations. Each instrument produces its own legal and tax consequences.

If you wish to ensure that the surviving partner can continue living in the property or has sufficient financial resources available, it is important to make appropriate legal arrangements in advance rather than relying solely on the chosen form of cohabitation.

How Do You Make the Right Choice?

There is no single form of cohabitation that represents the best solution for every couple. The most suitable option depends on your personal and financial circumstances and the level of protection you wish to provide to one another.

The following questions may help identify your priorities:

• Do you wish to keep your income and assets as separate as possible, or would you prefer to build them up jointly?
• Are you purchasing a property together, and are your individual contributions equal?
• Do you have children, possibly from a previous relationship?
• Do you want the surviving partner to be able to remain in the family home?
• Do you wish to protect one another in the event of death while also preserving certain assets for your children or other heirs?
• What should happen to the property, outstanding loans and accumulated assets if your relationship ends?

Depending on your answers, a marriage contract, cohabitation agreement, will, accrual clause or another asset-planning arrangement may be appropriate.

It is also important not to focus solely on your current situation. Your wishes and circumstances may evolve when you have children, purchase a home, start a business or receive assets through a gift or inheritance.

How Can Fairway Assist You?

At Fairway, we work with you to determine which legal arrangements are best suited to your personal circumstances and future plans. We help you understand the consequences of the various options available and ensure that appropriate arrangements are put in place in a timely manner to provide legal certainty and protection.

Are you considering marriage, legal cohabitation, purchasing a property together, or organising your estate and succession planning? Or would you like existing arrangements to be reviewed? Feel free to contact one of our specialists in family and private wealth law.

By considering your rights and obligations at an early stage, you can avoid a great deal of uncertainty and reduce the risk of future disputes.