The Case For Cohabitation Agreements

The main reason to have a Cohabitation Agreement or 'Living Together Agreement' is to avoid the possibility of both complex and costly Court proceedings in the event of relationship breakdown or the death of one of the parties to a relationship. Robert Worthing, Partner and Head of our Family Team looks at Cohabitation Agreements in further detail.

Many people still believe that cohabiting couples have statutory rights against each other if a relationship comes to an end. The reality is that there is no such thing as common law marriage. As the Supreme Court confirmed in the leading judgment of Jones –v- Kernott in 2011, the law dealing with the distribution of property on relationship breakdown is both complex, uncertain and fact specific.

We take the view that the majority of couples entering a cohabitation relationship need the security of a Declaration of Trust regulating legal interests in a property that they live in or, a Cohabitation Agreement, which is a more flexible agreement dealing with the financial aspect of their cohabitation.

A Cohabitation Agreement may be entered into by a couple at any time in order to regulate their affairs during the relationship or record their financial arrangements upon and after separation. It should be borne in mind by the parties that the Agreement may subsequently fall to be scrutinised by the Court and it is important that both parties have the opportunity to take independent legal advice and that there is full and frank financial disclosure before the Deed is entered into.

The contents of any Deed may suit the needs of any individual couple. Some may agree that everything held by them individually prior to the commencement of the relationship should continue to be held in that way. Others may wish to provide that assets are shared equally or in some other proportion in the future. Consideration will often have to be given as to how assets acquired after the Deed is entered into should be held. The Deed itself can cover provisions in respect of all properties, Bank accounts and liabilities, chattels and business interests, although this is not an exhaustive list.

The drawing up of a Cohabitation Agreement is an ideal opportunity for both parties to review their testamentary provisions and to ensure that adequate provision is made for their partner in the event of death. Any agreement reached should be reviewed regularly so as to ensure that it adequately meets the couples' circumstances.

Finally, it should be made clear that a Cohabitation Agreement will come to an end automatically upon marriage or civil partnership. At that stage, any individual wishing to protect their interest would be advised to enter into a Pre-Marital Agreement or Pre-Civil Partnership as appropriate.

This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from taking any action as a result of the contents of this document