What is a Cohabitation Agreement?

23 January 2018

A Cohabitation Agreement is a legal agreement which can be put in place between a couple who live together, but are not married or in a civil partnership. The agreement allows you to enter into a legally binding contract with the person that you live with.

A cohabitation agreement can cover matters such as how household costs will be met, ownership of property and what will happen to shared money and assets if the relationship breaks down.

How is Cohabiting Different to Marriage / Civil Partnership?

When married or in a civil partnership there are a laws in place to help determine how financial assets should be divided if the couple separates. Couples who live together when not married or in a civil partnership are called ‘cohabitants’.

Many cohabitants believe that they are protected under something referred to as ‘common law marriage’ but the fact is that common law marriage does not exist in England or Wales. This means that you could be left with nothing in the event of a separation. One way to clearly set out your rights as a couple living together is to put a cohabitation agreement in place. A cohabitation agreement is very beneficial when trying to establish matters such as:

  • Who shall pay for the upkeep and bills in a property, and how
  • Who owns a share in a property and in what proportions
  • What will happen in the event of a separation
  • Who shall pay certain debts
  • Who shall be nominated for death-in-service benefits.

A cohabitation agreement is vital if you wish to protect your share in a property and provide a clear definition of how the property is owned. People who receive money from the bank of mum and dad to buy a property often make a cohabitation agreement to specify who paid what, and how the money is to be repaid; whether or not the cohabitants separate.

Cost Effective Benefits of a Cohabitation Agreement

A stitch in time saves nine! Cohabitation agreements can save you a lot of time and money if you decide to separate whilst living together. Without a cohabitation agreement, if there is any dispute as to who owns an asset or what share they have then it may result in Court proceedings. These types of disputes are usually lengthy and could cost you a significant amount of money. Furthermore if you are unsuccessful in the dispute you could be required to pay for all of the legal costs of the winning party.

Cohabitation agreements also make matters clear if one of you were to pass away whilst cohabiting. The agreement will show exactly what belongs to each person at the time of death. This can avoid potential disputes as to the deceased person’s Estate.

What Happens if Cohabitants Get Married?

In this event the cohabitation agreement will cease to exist upon the marriage, as you will then be subject to matrimonial law. Marriage means that in the event of separation, a Court has the power to decide how property is divided. Their decision will be based on fairness with regards to numerous factors including needs, sharing and equality.

What Can You Do to Ensure You’re Still Protected?

If you have a cohabitation agreement in place and you are getting married, you can choose to enter into a matrimonial agreement, which can incorporate the terms of your cohabitation agreement.

A matrimonial agreement can be drafted if you wish to protect assets in the marriage or decide between you and your partner how you would like assets to be divided in the event of a divorce. There are two types of matrimonial agreements available which are Pre-nuptial agreements (Prenups) and Post-nuptial agreements (Postnups). Postnups are treated as legally binding by the Court under certain conditions and both are legally recognised in England and Wales by the family Courts and can be taken into consideration or followed by a Judge in the event of a divorce.

Matrimonial agreements give you a greater degree of freedom, as you can tailor the agreement to suit your individual circumstances. This means that you can decide for yourselves what you believe is fair at divorce and which assets mean the most to you, rather than a Judge deciding what they believe to be fair in light of the current law.

Fixed Fee Agreements

Our Family Law Solicitors can draft a cohabitation, pre-nuptial or post-nuptial agreement for a fixed fee which we will agree with you upfront before any work starts. Our fixed fee includes a Family Law Solicitor providing you with clear advice on how an agreement can assist you in your current situation, and in the future.

Once we have provided you with a written fixed fee quote for the agreed work to be done, that price will not change.

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