Couples who chose to live together in relationships (also known as cohabitants) often believe that they have some form of legal status of protection. Unfortunately, this belief is wrong.
There is no such thing in English Law as a “common law” husband or wife, this is the same where same sex couples are concerned.
The reality is that cohabitants who have not entered into a legally-recognised relationship, either marriage or Civil Partnership – may have very few rights. It makes no difference that they may have lived together for many years. They will still not be entitled to the same protections that spouses and Civil Partners enjoy which can often seem very unfair.
Whist it may not be the most romantic start to a relationship a Cohabitation Agreement could be an essential part of preparing for a modern relationship. The agreement is designed to give protection for both parties in the event that things do not work out as intended, or if your partner suddenly passes away.
What is a Cohabitation Agreement?
This is an agreement which will regulate the terms upon which you live together and address what happens in the event that the relationship should end.
It is a written document that is signed as a deed by both parties in front of witnesses. It will generally deal with three separate areas:
Who owns (and owes) what at the time of the agreement, and in what proportions,
What financial arrangements you have decided to make whilst living together, and
How property, assets and income should be divided if you separate.
It is usual for both parties to receive separate legal advice to ensure that the document and agreement is fair and reasonable to ensure that the Court uphold the document in the event of a dispute. It may also be beneficial for the agreement to include provisions for future events such as discussing the needs of any future children, but this is not essential.
Why should I make a Cohabitation Agreement?
You are able to make a Cohabitation Agreement at any time. However, it is usual for those who are about to start living together to think about making an agreement.
As, unlike on divorce, there are no particular set of rules that automatically apply if you split up with a partner that you have been living with. Despite how long you have lived with them does not automatically mean that you are automatically entitled to some financial support or to share their property should you split up. Without an agreement in place you could be left in a very exposed position and disputes over properties following a split can lead to very expensive and protracted legal proceedings. A good Cohabitation Agreement can mean that areas of potential dispute on separation are reduced or eliminated.
What may be covered in a Cohabitation Agreement?
Your shared home
It is important to state within the Agreement who owns the home and how this is owned and whether this differs to what is reflected on the title documents. Ideally the agreement would also set out who is paying the mortgage and how the property will be dealt with if you and your partner separate.
Money and paying bills
For convenience many couples have a join bank account when they live together and the agreement will set out who pays what into the account, whether the contributions are equal, what the joint account should be used for and how the money in the joint bank account will be apportioned if you and your partner separate. If you decide not to use a joint account, then the Agreement can set out who will pay which of the household bills and may also take into consideration any other bills such as credit cards and other debts.
Do you want to nominate your pension to your partner? This needs to be considered and agreed. Your partner does not automatically get your pension should something happen to you as it depends on the individual rules of the particular pension scheme.
It may be sensible to include within the Agreement who owns and/or will keep household items, cars and other possessions which should prevent any dispute should a separation occur.
You may need to review the Cohabitation Agreement in the future should you and your partner move house, have children or your circumstances change dramatically. It is important that the agreement is kept up to date.
As well as the Agreement we would also suggest that you make a Will so that if you die whilst living with someone, your wishes can be put into effect. Whilst it is possible in some circumstances for a cohabitant to inherit, there are no strict rules about what should happen.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.