According to the Office for National Statistics, cohabiting families are currently the fastest growing family type in the UK. The ONS has calculated that the number of cohabiting families has more than doubled from 1.5 million families in 1996, to 3.3 million families in 2017. This increase has led to a greater focus on the rights of cohabiting couples especially in the event that the relationship breaks down.
Currently, co-habiting couples do not have the same legal rights as married couples. Despite common belief, there is no such thing as a “common law marriage” in UK law. One way co-habiting couples can protect themselves is by having a Cohabitation Agreement.
What is a cohabitation agreement?
A cohabitation agreement is a written, signed document which often deals with the following matters:
- who owns (and owes) what at the time of the agreement, and in what proportions;
- what financial arrangements you have decided to make while you are living together; and
- how property, assets and income should be divided if you separate.
If the agreement is properly drawn up, the terms are reasonable, and each party has had separate, independent legal advice on its effect, a court is likely to uphold the agreement in the event of a dispute following a breakdown of the relationship.
When should I make a cohabitation agreement?
You can make a cohabitation agreement at any time, whether you are about to start living together or if you have been doing so for many years. We can help negotiate and draft an agreement which suit your individual circumstances.
Why should I make a cohabitation agreement?
Unlike on divorce or civil partnership dissolution, there is no particular set of rules that automatically apply if you separate from someone you have been living with. Living with someone for a certain period of time doesn’t mean you are automatically entitled to some form of financial support or to a share in their property after you separate. When a couple has not been married or in a civil partnership, sorting out disputes about property without an agreement can be expensive and time-consuming. A good cohabitation agreement can mean that areas of potential dispute on separation are reduced or eliminated.
Many couples also find the process of making a cohabitation agreement means that they have the chance to think and talk about how living together is going to work financially. This can help avoid disputes later on.
Things to consider in a cohabitation agreement:
1. Your shared home
It is important to record how this is owned, and whether there has been any separate agreement or promise that isn’t currently reflected in the legal documents. Who is to pay the mortgage? If there are any endowment policies or other savings arrangements linked to a mortgage, what contributions are to be made to those and how will they be dealt with if you separate? Are you going to insure each other’s lives?
2. Money and paying bills
Many people find it convenient to have a joint bank account when they live together. Will the contributions into this account be equal? If not, will the money in the joint account be considered equally owned? What will the joint account be used for and when should your personal accounts be used instead? If you’re not using a joint account, who will pay the different household bills and will this be considered an equivalent contribution to something else? What about credit cards and debts? Who will be responsible for them?
3. Personal possessions
You should consider who owns and/or will keep items such as furniture and cars. It may be helpful to set down rules about ownership of important things or establish a method to sort out any disagreements about them in the event of a separation.
Although not legally binding, it may be worthwhile to think about whether you would like to provide for any children over and above the minimum expected by the child support system in the event of your separation (e.g. in respect of school or university fees), and to set down some expectations about how children would be cared for if you were to live apart.
Some final points to note:
It is possible that the law might change in the future to give cohabitants specific rights so it is advisable to keep your agreement under review. You may also need to review the agreement if you move house, have children or your circumstances change in other ways.
You should also make a Will so that if you die while living with someone, your wishes can be put into effect. Although it is possible in some circumstances for a cohabitant to inherit, there are no strict rules about what should happen so it is important that you make clear what you want.
Contact us for more information
This articles provides only a summary of the issues regarding cohabitation agreements. Please contact one of our solicitors to discuss in more detail.