Checklist for cohabiting couples

All-round protection for unmarried couples

Is a wedding ring really necessary to live together, have children and grow old together? More and more couples are deciding that the answer is no. And that is why the number of marriages in Switzerland is falling year after year.

If you think that marriage is rather too formal but that cohabitation is not binding enough, you can choose the middle path. As an unmarried couple, simply create your own commitments with individual agreements on matters such as children, pensions or inheritance. The practical checklist can help you with this.

Download checklist for cohabiting couples

Protect the partnership - here’s how it works:

Marriage is protected in matrimonial law on all issues ranging from retirement pensions to statutory matrimonial property regimes. It is the exact opposite for cohabiting couples. There are deliberately no statutory obligations here in order to protect the nature of this intentionally non-binding way of life. The only principle that could perhaps be cited is that man and woman share accommodation, table and bed. 

If you’d like more commitment for your relationship than ‘I love you’ from your partner but still don’t want to get married: Find out more below about the areas in which you can proactively obtain more protection. These measures and the downloadable checklist will help you implement this in practice.

1. Draw up a cohabitation agreement

At first sight, an agreement seems diametrically opposed to the informal nature of cohabitation, but it is that much more important if you want to play safe. It helps avoid disputes in the event of separation, but principally it serves as proof of your relationship, such as in dealings with pension institutions. Furthermore, drawing up binding rules for your partnership also offers a very unbureaucratic benefit, namely the opportunity to talk extensively with your partner about your relationship and your respective expectations for your joint future. 

In addition to details on place of residence and the duration of your relationship, a cohabitation agreement can include the following points depending on your life situation; these should ideally be checked by a lawyer and be witnessed before a notary.

1.1 Inventory

When your relationship comes to a hypothetical end, who owns what in the joint household? Or who is entitled to how much from a joint account? You can avoid disputes with an inventory list and a written agreement about how to deal with joint possessions upon separation. Simply make a list of items and assets that you or your partner brought into the relationship. Record the proportion of costs that both of you contributed towards joint purchases. And don’t forget to regularly update the inventory.

1.2 Budget

Whether rent, electricity, food or insurance - there are many household costs that affect you both and should be equitably divided based on your financial capacity. Through a joint account or by monthly settlement. These costs are normally divided between both of you:

· Rent including ancillary costs
· Electricity, gas
· TV, radio, telephone and internet connection costs
· Premiums for household contents and liability insurance
· Food, toiletries and cleaning materials
· Cost of joint holidays/excursions

1.3 Accommodation

Who stays, who moves out, who is liable to the landlord? And what is the legal situation when an unmarried couple buy their own home together? The subject of accommodation has many pitfalls for cohabitees in particular, and it is important that you have the arrangement set down contractually. Comprehensively. And in the good times.

You should normally only enter into a joint tenancy agreement if, at the same time, you both agree in writing what the consequences would be if you hypothetically separate, as you are jointly and severally liable to the landlord and can only terminate the tenancy jointly. If only one partner is the lead tenant, it is advisable to draw up a sub-letting agreement for the second person. Similarly and after seeking professional advice, you should also make formal arrangements in a cohabitation agreement covering separation and death, rights and obligations and mortgage repayments if you have bought a property together.

1.4 Children

Children are the reason why most couples one day decide to get married. This is because if people don’t tie the knot, many automatic procedures stemming from marriage do not come into play, starting with the fact that the father is not necessarily regarded as the father. He has to formally acknowledge paternity and the associated rights and obligations at the registry office. Joint parental care must also be declared there. As a couple and ideally before the birth, you should also consider what would happen if you separated. Where would your joint children live, what about maintenance payments and how would you organize access? You should have your agreed arrangements fixed in writing and recognized by specialists such as the child protection authority. 

2. Draw up powers of attorney

Unlike in a marriage, you and your life partner have no mutual obligation to provide assistance and consequently no right to stand in for one another in emergency situations. Without relevant powers of attorney, doctors are not allowed to give information on your partner’s health condition, and authorities, insurance companies and banks do not recognize you as an authorized representative either. You should therefore give each other the authority over the following points if you do not want to lose the support of your better half in an emergency.

2.1 Disclosure authority

You can release banks, (social) insurance bodies, authorities or landlords from their duty of confidentiality through a mandate. This way your life partner can gain access to your circumstances if you are incapacitated through accident, illness or death.

2.2 Release from duty of confidentiality

By releasing doctors from their duty of confidentiality, cohabiting partners can be given information, in the hospital or at the doctor’s, on the health condition of their loved one.

2.3 Living will

This order enables your partner to represent you with respect to medical treatment if your power of judgment is compromised through illness or accident.

2.4 Power of attorney

With this type of authority, your life partner is entitled to represent you legally when it comes to personal care or financial matters.

3. Amend pension

Many couples opt for cohabitation in order to avoid the marriage penalty in terms of taxation and Pillar 1 benefits. As unmarried people are provided for individually and not jointly, their future AHV pension is not capped. Furthermore, their BVG capital from the time they were together cannot be halved in the event of separation – their pension contributions are and remain their contributions. However, unbroken pension profiles are the condition for this account to pay out for you in retirement. Find out here how cohabiting couples can be properly provided for in retirement, how to avoid gaps and what you should bear in mind in terms of state, occupational and private pensions:

3.1 AHV (Pillar 1)

Everyone earns their own AHV pension. If a cohabiting partner dies, then, unlike married couples, the surviving partner has no claim to a widow’s/widower’s pension. This is why you should both be able to pay your own AHV contributions without interruption. As soon as either of you neglects your own provision in favor of staying at home and looking after children, the working person should be supportive and take over pension contributions. Ideally any gaps that arise through looking after children are covered by AHV education credits.

3.2 BVG (Pillar 2) 

Unlike married couples, the pension fund assets accrued during unmarried couples’ time together is not divided upon separation. Only upon death are BVG benefits possible for the surviving partner, but there is still no legal claim. Pension funds that grant partner’s pensions often link these to a specific cohabitation period or care for joint children. Either way you should notify the pension fund early about your life partnership. And draw up a cohabitation agreement which can be used as evidence if necessary.

3.3 Pillars 3a and 3b

As for all other Swiss, pensions with Pillar 3 also offer you the option of saving capital so that you can continue to maintain your accustomed standard of living in retirement. But Pillars 3a and 3b are also particularly advisable for you for the simple reason that Pillars 1 and 2 are only partially suitable for protecting life partnerships in the event of death. In a pensions consultation, you will ideally find the best individual solution. Overall the following can be said:

For tax-efficient tied Pillar 3a pension provision, there is a statutory prescribed sequence, under which biological children come first in your situation, only then followed by life partner and other family members. To provide clarity in the event of death, the order of beneficiaries and therefore succession for your 3a capital should already be defined with your pension institution during your lifetime.

Pension provision with flexible Pillar 3b is particularly suitable for cohabiting couples. Whether savings, bank accounts, life insurance, bonds, money market investments, shares, securities funds or property - all options can be used for mutual financial protection, as the order of beneficiaries can be freely chosen up to statutory compulsory portions. Of course you can additionally record here the nature and extent in the beneficiary clause and also in your will.

3.4 Mutual protection 

Making each other a beneficiary through life insurance not only makes sense for cohabiting couples due to the discrimination in the social security system, but also often from an inheritance and inheritance tax perspective. Children in the household should also be considered in the event of incapacity to work. What happens if one income is lost temporarily due to illness or permanently as a result of disability? Take responsibility, not only for yourself but also for your life partner - insure against misfortunes such as occupational disability or death.

  • Teaser Image
    How can cohabitation be protected?

    Pillar 3a is an ideal instrument for helping cohabiting couples protect against risk. The SmartFlex pension plan allows individual, return-oriented saving for retirement with suitable risk coverage.

    SmartFlex

4. Write a will

As cohabitation is regarded as non-existent for inheritance purposes, you should both take each other into consideration in a will if your relationship lasts several years. Even if some compulsory parts are automatically allocated to close family, you are always free to decide on a portion. There is also the option for those who receive compulsory portions by law - such as children or parents - to renounce their inheritance. In this case you can also bequeath this portion to your partner. But if you do so, remember that unlike children or married couples, unmarried couples are always subject to inheritance and gift tax. In any event it is worth seeking legal advice.

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