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Cohabitation agreements

Cohabitees have few rights and the division of assets between a separating couple will be based on Property Law and Trusts Law alone. This can often cause a dispute if the couple separate in the future and their assets need to be divided.

In addition, on the death of an unmarried partner not only do the intestacy laws make no provision for the surviving partner to inherit from the estate, but also the surviving partner does not benefit from the exemption from Inheritance Tax that would apply if the deceased’s estate passed to a spouse or civil partner. The surviving partner may also have to prove that they qualify for financial provision to be made out of the estate under the Inheritance (Provision for Family and Dependants) Act 1975.

One inexpensive solution is to prepare a cohabitation agreement. This is a contract between two people who live together that sets out their agreement on the division of their assets should they separate or one of them dies. It is sensible when cohabiting with anyone, without the protection afforded by marriage or civil partnership, to enter into a cohabitation agreement.

The agreement should state who it is between, how long it is intended to last and that it is intended to be legally binding. If there are assets (e.g. your home) which are to be dealt with in a particular way, these should be specifically mentioned and details provided as to how they are to be dealt with on death or break-up of the relationship, such as percentage shares. The ownership of all significant assets should also be considered, including bank accounts, insurances and specific valuables.

A cohabitation agreement is normally best considered in tandem with your will, as there are tax planning and other issues to consider.

We can help you by:

  • Drafting a cohabitation agreement
  • Advising you on your legal position now and your possible legal position in the future
  • Helping you to negotiate an agreement in relation to any specific issues or assets
  • Advising you of the likely legal costs involved

If you require further advice or would like to discuss arranging an initial meeting with a member of our family team, please contact us on 01689 887885 or fill in our Enquiry Form.