There has been a huge increase in co-habiting couples over the last decade.  If you and your partner are intending to set up home together or are already living together, you should think carefully about setting up a Cohabitation Agreement.  

This is a formal written agreement for couples who choose to live together but not to marry. No one wants to think negatively at the beginning of a relationship but it’s important to understand that, should the relationship break down in the future, cohabiting couples have no legal status. 

Unfortunately, couples often do not take legal advice when making joint financial decisions such as buying a house and this can cause problems in the event that the parties’ relationship breaks down. The law treats unmarried couples differently to married couples and contrary to belief in England and Wales there is no such thing as a ‘common law spouse’ and, if couples separate, they must rely on complex property and trust law to establish who owns what. It is therefore very important that the parties’ intentions in relation to contributions towards any financial assets are recorded to avoid a contentious dispute in the future.  

In this respect, Cohabitation Agreements and Declarations of Trust can be entered into to record both parties’ intentions  

Good reasons why you should consider a Cohabitation Agreement: 

• It will help to protect your finances by clarifying financial commitments, working out how income and expenditure responsibilities are to be shared
• It is sensible when only one of you owns the home you both intend to share
• If you buy your house together a trust deed can make clear your plans for mortgage payments, share in the property and how the proceeds of a future sale should be divided should you separate or one of you die
• It allows you to look ahead and put in place contingency plans for unexpected events such as children, separation, long–term illness or death
• There is some financial protection for the children of unmarried couples; however couples with children or thinking of having children outside marriage should seriously consider taking legal advice
• Discussing what goes into an agreement can be emotionally difficult but can bring a maturity to the relationship by talking through major decisions

Right now a Cohabitation Agreement is not enforceable or binding by law, but Judges are increasingly placing weight on the contents when they are given in evidence in Court following a breakdown in the relationship. If both of you share information honestly, and both get independent legal advice to form the Agreement, then there is a much better chance that the Courts will hold each party to their side of the bargain. 

In the event that there is a financial dispute between cohabitees where no legal document exists defining each party’s financial interest, we are able to advise you on reaching a settlement with your former partner in relation to this. There are legal principles which set out how property should be divided and a settlement can be negotiated and if this is unsuccessful, Court proceedings can be instituted. 

It is also advisable for couples who live together to make Wills because, without one, any assets owned by you will go to your next of kin and not to your partner.   

We welcome telephone enquiries so please do not hesitate to telephone Emma Patel on 01306 884432