The idea of common law marriage is a myth.
Whether two people have lived together as a couple for a long time or if they have children – unless they have married or entered into a civil partnership, they do not have the same financial claims on separation as a married couple or civil partners.
So what can be done to protect yourself if you are cohabiting?
Just as a marrying couple might draw up a prenuptial agreement specifying how assets would be divided in the event of a divorce, a cohabitation agreement is a similar legal document for unmarried partners living together. You can make an agreement at any time but it is advisable to do it before you move in together. Cohabitation Agreement can be made between people who are not romantically involved too, such as friends.
The agreement can set out ahead of time what will happen in the event of a breakup between unmarried cohabitants. It can also outline the parties commitment to shared financial obligations (such as paying rent or bills) and other relationship matters.
Are Cohabitation Agreement legally enforceable?
Cohabitation Agreement are created with the intention of being legally binding and should be upheld court provided they have been created correctly. There is a requirement that both partners have received independent legal advice, have entered into the agreement freely (without pressure) and have been honest about their financial situation.
The agreement should be reviewed periodically, especially if circumstances have changed for example the birth of a child.
Who does a Cohabitation Agreement protect?
Often, an agreement is created to protect an individual who is less financially secure than their partner. On other occasions, it is created with the intention of ring-fencing assets. It can benefit both parties by ensuring that both partners are clear about whose assets are whose. Cohabitation Agreement s can be particularly useful when one or both parties have children from a previous relationship and where a party wishes to protect assets for those children.
Another example may be if one partner lives in a property owned solely by the other but pays utility bills. They may feel that they are entitled to a share of the property itself. Without a Cohabitation Agreement in place, by default they would have no automatic legal right to the property at all – and so drawing up an agreement can help to clarify these types of ambiguities.
If two cohabiting partners own property together and go on to break up, the property ownership will usually be divided 50-50 between the two of them (even if one party put in a lot more money than the other) unless clear legal arrangements have been made, including a declaration of trust and a Cohabitation Agreement defining each persons’ interest in the property. The cohabitation agreement can be used to spell out who owns what, and in what proportion.
What should be included in a cohabitation agreement?
Cohabitation Agreement can take many forms and fulfil many purposes, so there is no one-size-fits-all document.
A Cohabitation Agreement can often include the following:
Property bought during the cohabitation period – if property has been purchased during the cohabitation but only one partner is named on the title deeds, should the other have a claim to a share of the ownership? If there is a breakup, should the property be sold?
Property owned prior to the cohabitation period – if one partner already owns property before cohabiting, they may wish to ensure this is not eligible to be shared in the event of a breakup.
Utility and other household bills – if one partner pays all the bills but does not technically own the property, should they have any claim to a share of the home? A Cohabitation Agreement can clarify their intentions
Assets such as cars, jewellery, and so on – an agreement can spell out unambiguously who owns what.
Pensions – Unlike married couples, cohabiting partners do not have an automatic right to benefit from their partner’s pension, unless they have been formally as a ‘nominated beneficiary’.
What happen if we decide to marry?
You can either revise the agreement so that it reflects what you would wish to happen if the marriage breaks down or allow the agreement to end. You may wish to consider a pre-nuptial agreement as an alternative.
In summary, an appropriately drafted Cohabitation Agreement can save a couple thousands of pounds in contested legal proceedings should you break up in the future and is a valuable mechanism for ensuring disputes do not arise.
For further information or advice on any family law matter, please contact Cate Silvester on 01732 747900 or [email protected]. Warners Solicitors has offices in Sevenoaks and Tonbridge, Kent.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
