Cohabiting couples who are not married or in a civil partnership are the fastest growing type of household in the UK, with the number having more than doubled from 1.5 million in 1996 to 3.3 million in 2016.
What many of these couples may not realise is that they have no automatic legal protection if their relationship ends. This could leave them involved in complex, lengthy and expensive legal disputes if they split up.
If you are planning to live with your partner without getting married or entering a civil partnership, a cohabitation agreement can allow you to protect your financial interests, both during the relationship and if it does come to an end. A cohabitation agreement is a legal document that sets out who owns what and how your assets, such as property, possessions and savings, will be divided if you separate.
Although all cohabiting couples should consider a cohabitation agreement, there are certain circumstances where it is particularly advisable. Below, we set out some of the situations you may find yourself in where a cohabitation agreement is strongly recommended.
When buying a property together
If you jointly own a property as an unmarried couple and have not specifically stated in what shares and you split up, the equity in property will automatically be divided 50:50 between you, even if one of you contributed more towards the purchase or mortgage payments. You would need to go to court to challenge this and there is no guarantee of success.
A cohabitation agreement can allow you to set out exactly what proportion of the property each of you owns, ensuring you will not lose out if your relationship ends. It is recommended that you also enter in a Declaration of Trust which backs up this agreement.
When moving into a property your partner owns
If you move into a home that your partner owns, you will have no automatic right to make a claim for the property if your relationships ends, even if you have contributed towards the mortgage. This means you could be left homeless and significantly out of pocket.
A cohabitation agreement allows you to set out the basis on which you will be occupying the property. This can include specifying whether any money you pay to your partner towards the mortgage will give you a financial interest in the property and how much notice you will be entitled to before having to move out if your relationship ends.
If you have children together
When you have children with a partner you are not married to or in a civil partnership with, it is essential to have a cohabitation agreement to protect your interests and those of your children. It is essential that you put the needs of the children first if you were to separate and that you and your partner are clear where they will reside.
Your partner will always have an obligation to pay child maintenance.
If your partner is supporting you financially
Even if you do not have children, if your partner is supporting you financially, it is sensible to put a cohabitation agreement in place. This can help to prevent you being entirely dependent on your partner’s goodwill for financial security if you separate.
If you are supporting your partner financially
There are often situations where one partner agrees to support another temporarily, for example where one partner is studying, so has a reduced income until they complete their studies. If you agree to support your partner during this period on the expectation that they will be able to “pay you back” once their studies are complete and they can get a better paid job, you could be left feeling you have paid too much if your relationship ends before they are able to do so.
A cohabitation agreement can set out specific terms for such situations, ensuring that your financial interests are protected whatever happens.
Get expert help creating a legally sound cohabitation agreement
When thinking about entering into a cohabitation agreement, it is essential to get the advice of a solicitor and highly advisable to have them draft the agreement for you. This will mean you can be confident that the agreement takes all of your assets and all likely eventualities into account, is written in a legally correct manner, and contains no loopholes that could leave you open to a financial claim.
If your partner has asked you to sign a cohabitation agreement, you should get a solicitor to review it for you before signing, to ensure the agreement does not place you at an unfair disadvantage and that your interests are protected.
Slade Legal is a well-established law firm operating out of 3 offices across Oxfordshire and the Thames Valley. Our highly experienced family law solicitors can help you with all aspects of planning your family life, including creating cohabitation agreements and resolving any legal disputes which arise either during your relationship or if your relationship ends.
To find out more, or to book a consultation with one of our expert family law solicitors, please get in touch.