Why You Should Have A Cohabitation Agreement

Man and woman holding hands

For couples who have decided to move in together, the excitement is palpable.  It is a huge step forward in any relationship and no one ever expects to break up after making such a big commitment.  Therefore, why would you need a Cohabitation Agreement?

Well, I am sure you know what I am going to tell you.  According to a report by the Institute of Fiscal Studies, around 27% of couples who are cohabiting when their child is born will have separated by the time the child is aged five; compared with 9% of couples that are married when their child is born.  Although the report was at pains to state that this and other statistics do not necessarily mean that marriage protects couples from splitting up, it does show that cohabitating couples separate at a higher rate.

At the risk of raining on your parade even further, contrary to popular belief, there is no such thing as a ‘common law marriage’ or ‘common law spouse’ in the UK.  Under English law, cohabitees have no legal rights to each other’s property.  This includes situations where one partner dies without a Will (known as dying intestate).  Under the laws of intestacy, your unmarried partner has no right to inherit your property.

As the law stands today, you can live with someone for decades, have children with them and share a household, but have no right to any property in their name or future financial support (known as spousal maintenance in a financial settlement following a Divorce).

For example, if you live in a house in which your partner is the sole legal owner (i.e. your name is not on the title), and they hold a pension, if you had given up your career to take care of the children you had together, you could be left completely destitute if your relationship breaks down.

Therefore, the best family law solicitors in London recommend to anyone thinking of moving in with their partner to enter into a Cohabitation Agreement and have a valid Will drawn up.  By taking these two relatively simple steps, you can avoid any bitter disputes if you separate and provide the ability for your partner to inherit your property if you die.

What is a Cohabitation Agreement?

A Cohabitation Agreement allows you to regulate how bills will be paid during the relationship and how any property will be divided if you break up.

In the past, the courts refused to validate Cohabitation Agreements on the grounds they went against public policy.  However, it is now well recognised by the judiciary that many couples choose to live together outside of marriage or a civil partnership.

For a Cohabitation Agreement to be recognised as valid by the courts, it must have been entered into freely and voluntarily, with both parties receiving independent legal advice and full financial disclosure on both sides being made.

A cohabitation contract may be made orally, except insofar as it relates to any matters concerning an interest in land. However, as case law illustrates, the parties' intentions may be more difficult to determine in the case of an oral cohabitation contract, and to avoid disputes it is always best practice to have a family law solicitor put what is agreed in writing.

 What is contained in a Cohabitation Agreement?

Cohabitation Agreements can set out the following:

  • the assets and wealth each party brought into the relationship
  • who owns the home you live in and what rights the other party will have to it in the event of a separation
  • the rights each of you have to any furniture, cars, bank accounts, pensions, and other assets
  • how you each will financially support any children you have together (over and above the legal requirement to maintain them)
  • who is liable for any debts
  • how you divide the mortgage or rent and other bills whilst you are living together
  • how any home improvements will be agreed and funded
  • the circumstances in which the home can be sold

When should we update our Cohabitation Agreement?

As the years go by, circumstances change.  Costly and stressful disputes can arise if you and your partner do not keep your Cohabitation Agreement updated.  To ensure you receive the best legal protection, contact your family lawyer to revise the agreement if:

  • you and your partner have a baby
  • one of you is made redundant
  • one of you suffers a serious illness or accident, which prevents that person from working
  • one of you receives a significant inheritance
  • there is a large change in the amount of money one of you is contributing to the relationship as a whole

Do I have to have a family law solicitor draft my Cohabitation Agreement?

It is possible to create a Cohabitation Agreement yourself.  However, it is unlikely to be considered legally valid unless both of you receive independent legal advice.

The risks associated with organising and drafting your own Cohabitation Agreement are numerous and include:

  • one or both of you failing to make a full financial disclosure, resulting in disputes surrounding assets which were not made part of the agreement
  • third parties having obligations under the agreement without their prior consent
  • the agreement is executed as a contract rather than a deed, which can create issues around whether or not consideration is present (one of the necessary elements of a legally binding contract, along with offer and acceptance)
  • a confidentiality clause is not included in the agreement
  • the key terms are not drafted correctly, making you and your partner’s intentions ambiguous

Final words

A Cohabitation Agreement may not be romantic, but it can save you a great deal of misery and expense to ensure you have one.  The old saying, “hope for the best, plan for the worst” undoubtedly applies when it comes to choosing to live with your partner.

OTS Solicitors is one of the most respected immigration and family law firms in London and is highly recommended by the Legal 500.  By making an appointment with one of our family solicitors, you can be assured of receiving some of the best legal advice available in the UK today.  

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