Unmarried couples have no automatic legal rights if they separate. So, unless there is clear evidence of joint ownership, the Family Court has very little power to divide assets where parties are not married.
Entering into a cohabitation agreement provides each of you with the necessary legal protection for the share you have in any joint assets – ensuring a fair split should the relationship end.
A popular myth exists about the concept of the “common law spouse”.
Many people still believe that if they live with their partner and aren’t married, they are entitled to a share of the assets should the relationship break down.
There are proposals for the law to be amended to give greater rights to separating cohabitants but these are yet to be implemented.
Additionally, and in line with the lack of legal rights for cohabiting couples, it is equally important that you write a will to ensure your wishes are catered to in the event of your death.
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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.
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.
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.
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.
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.
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Our specialists in Family Law are looking forward to helping you.
