Do I need a Cohabitation Agreement?
If you and your partner are living together, or are about to move in together, a cohabitation agreement can provide reassurance, certainty and clarity on each person’s rights and responsibilities in the event of a break-up.
Many couples are under the assumption that, if they are living together but unmarried or not in a civil partnership, then ‘common law marriage’ protects them in the same way as married couples.
No such law exists. Couples who live together do not have the same legal rights as married couples or those in a civil partnership.
For peace of mind in your relationship, a cohabitation agreement may be a suitable option to ensure that there is no uncertainty over who gets what. It can also allow a level of security for couples who share large assets such as houses and businesses.
By coming to an agreement before or whilst you are living together, you will:
- have a clear understanding of what your financial commitments are
- avoid misunderstandings regarding your rights and responsibilities as you continue to live together, in particular with regards to ownership of property
- avoid difficulties and disagreements if you split up
- have clear evidence of your intentions should you have to go to court
How does a Cohabitation Agreement work?
A cohabitation agreement involves you and your partner agreeing upon the share each of you should have in any joint assets (property, bank accounts, cars and other items) as well as your liabilities in respect of household bills, credit cards, etc. It can also cover other aspects of your relationship, such as pet ownership.
Once agreed, our family team can then assist you in ensuring that your cohabitation agreement is a legally binding document that you can both rely on to avoid any future uncertainty. You can then carry on as normal with your life and hopefully never have to resort to bringing it into action.
If you and your partner eventually get married or form a civil partnership, you may wish to convert this into a prenuptial agreement. Your solicitor can advise on what is best for your circumstances as things change.
What is a cohabitation agreement?
A cohabitation agreement is a legal document. It can be enforceable by the court if it is properly executed, granted that both parties have:
- Been honest about their finances
- Each obtained separate legal advice upon its terms
In the event of a split, unmarried couples do not have the same legal rights as married couples, regardless of how long a couple have lived together.
In law as it currently stands, their potential claims are extremely limited, with only being able to claim money held in a jointly owned property. If the separating couple have children, they do also have other potential claims but only limited to claims on behalf of the children, not themselves.
A cohabitation agreement is designed to give unmarried couples who live together certainty in relation to what rights they have or do not have when it comes to assets.
What is included in a cohabitation agreement?
A cohabitation agreement sets out what arrangements should be made if a couple separates.
Shared responsibilities and assets are typically included, like property, joint debt, or even any pets.
The following information should be included in a cohabitation agreement:
- Property you owned before moving in together
- Property you purchased after moving in together
- Any household expenses that you have
- Inheritance and wills
- Any children that you have together
What information is needed for a cohabitation agreement?
When it comes to creating a cohabitation agreement, you’ll need to set out what happens to your property in the event of a split.
In addition to this, you’ll also need to lay out plans for any shared business or material assets, like cars.
Knowing what to include can be complicated – but working with an experienced solicitor can make the process simpler.
What happens if cohabitants get married?
If you get married after signing a cohabitation agreement, you should seek the advice of a solicitor.
In lots of cases, your agreement can carry some weight in a financial claim if the marriage were to break down; but it all depends on how the document is worded. It is best to enter into a pre-nuptial agreement in such circumstances.
When should I draw up a cohabitation agreement?
There is no right or wrong time to draw up a cohabitation agreement.
Often, couples decide to sign one after they have bought a house together or share a business. There is nothing wrong with this, and it is best to have one rather than not.
It is best to enter into such an agreement early on, to ensure that your interest in any shared or individually owned assets are protected at the outset.
What about child arrangements if cohabitants separate?
Claims can still be made for the financial support of children (this is separate to statutory child maintenance) but not for spousal maintenance (i.e. financial support for a former husband or former wife.)
Instead, any claims will be determined by reference to a combination of complex trust and property law.