Cohabitation Agreements

During the Covid-19 pandemic, many couples who previously did not live together, made the decision to cohabit during the periods of lockdown. If the periods of living together have been successful, many may now be considering making these arrangements more permanent. When making the decision to live together, there is no legal requirement to have a cohabitation agreement in place, but such an agreement can be a useful tool to protect each party’s finances and establish the practical arrangements involved. People who live together (known as cohabitants) do not have the same rights as married couples, so many couples who have lived together before separating find themselves in unpleasant disputes because there was no prior agreement between them about what should happen to their property, debt, money and/or businesses beforehand.

A cohabitation agreement can help with this by setting out what a couple has resolved should happen in the event of a relationship breakdown. Cohabitation agreements are documents tailored to each couple but the common aim is to protect financial interests, provide peace of mind and certainty as to what each party will leave the relationship with. Often cohabitation agreements will make provision for how the following shall be dealt with :- owned property, rented property, household bills, debts, money which may have been gifted / inherited by each party, any other jointly owned assets and even the time by which a party should move out following the relationship breakdown.

In addition to a cohabitation agreement, if parties are purchasing a property together, it is sensible to obtain advice on how the property should be held (sole or joint names) and whether a declaration of trust would be appropriate. A declaration of trust is a document which sets out the respective shares that each party owns in any equity of the property.

Whilst a cohabitation agreement will not include provision for childcare arrangements, it is possible for parents to agree these arrangements in a separate document.

If a cohabitation agreement is not in place, in the event of a relationship breakdown, parties will be left to organise the division of assets, furniture, cars and household bill payments informally at a time which is already often sensitive and difficult. Generally, it is preferable to manage the financial aspects of a relationship whilst the parties are on good terms. If a cohabitation agreement is in place, it is often sensible to make provision for it to be periodically reviewed.

If having lived together, parties decide to marry, the legal status of their relationship changes again so it is always sensible to take further advice as to whether the cohabitation agreement arrangements can be reflected in a post or prenuptial agreement.”

If you require further advice on cohabitation agreements or would like to discuss arranging an initial meeting with a member of our family team, please contact us on 01689 887887.