What is a cohabitation agreement and why might I need one?

It’s becoming more and more popular for couples to move in together before getting married or entering into a civil partnership.  A cohabitation agreement can help, whether that’s both parties joining forces to purchase a property, or one moving into the other’s property, moving in together can represent a big financial commitment for both people. 

What is a cohabitation agreement?

A cohabitation agreement is a legally binding document, designed for couples who are living together without being married or in a civil partnership.  The cohabitation agreement outlines the couple’s intentions in relation to financial and other relevant matters that they wish to agree both while they are together and in the event of a break up further down the line.

What is covered in a cohabitation agreement?

A cohabitation agreement is tailored to meet the needs of the couple, but it is likely to cover one or more of the following areas:

• Property – how would the property be dealt with in the event of a break up?  This could include % splits based on the amount of equity brought into the relationship or the original owner of the property.
• Assets – aside from property what other assets were owned before the relationship started or purchased during the relationship and how would they be allocated in the event of a break up?
• Financial – the couple many want to outline an agreement of financial commitment while living together, for example partner X pays the mortgage, partner Y pays the bills.  
• Debts – if one or both parties brought debts into the relationship, the agreement could cover how these debts are paid back, and what would happen to them in the event of a break-up.  For example, if one partner entered the relationship with £10,000 of debt, and both partners paid this off, what would happen in the event of a break-up?
• Children – if the couple already have children from other relationships, or they go on to have children together in the future, the agreement could outline how the children would be looked after following a break up.  This could also extend to pets.

Why should I get a cohabitation agreement

There are many misunderstandings about the rights of cohabiting couples, including the term ‘common law spouse’ which is not actually a legally recognised term.  The truth is, outside of marriage or civil partnership, couples have very limited legal protection.  So, if there are elements such as property, debts, children or animals in the equation it is well worth considering putting a legally binding cohabitation agreement in place.

A report was published by the Law Commission in 2007 which stated that cohabiting couples should receive more protection around property and finances when their relationship eds, however in 2011 the government decided that they would not be moving forward with these proposals.

What are the benefits of putting an agreement in place?

When a relationship ends, it can be very stressful for both parties.  If a pre-agreed plan exists in the form of a cohabitation agreement, then the parties are free to focus on the emotional issues without having to worry about the finances.

What are the biggest concerns around cohabitation agreements?

As with prenuptial agreements for couples getting married or entering into a civil partnership, a cohabitation agreement can be a sensitive topic to discuss.  In essence you are agreeing up front what will happen in the event of your relationship breaking down, and that can cause rifts between a couple.  

If you’re considering putting a cohabitation agreement in place, Rucklidge Law can help you, contact us now.