What is a cohabitation agreement?

Cohabitation Agreements

A cohabitation agreement is a legal document that protects the financial interests of couples who live together but are not married or in a civil partnership. You can sort out a cohabitation agreement whenever, yet it’s best to organise it before you move in with your partner. Under the law in England and Wales, cohabiting couples do not have the same legal protections as those in marriages or civil partnerships. This lack of rights means if you and your partner break up, there may be a disagreement about who owns your property and assets.

A break-up can create uncertainty for the division of assets, potentially impacting livelihoods. Cohabitation agreements remove this uncertainty and provide peace of mind that should you separate, you have a legally binding agreement stating how you share your property, money, and other assets. 

As the number of cohabiting couples increases, many more enter into cohabitation agreements to secure their rights to finances, property and other assets during and after the relationship. 

At Guillaumes LLP, our family law team are experts in creating cohabitation agreements for couples in the UK, ensuring the agreement is suitable for both parties.

What is a cohabitation agreement?

A cohabitation agreement is a legal document, protecting the financial interests of couples that live together, setting out critical decisions, including:

• Who will pay any bills during the relationship

• Ownership of assets

• Child arrangements in the event of separation

• What will happen to any joint and separate property following the separation

• Ownership of the home (whether in a sole name or joint name)

• How the sale of the home will be managed

• How joint bank accounts will be handled

• Who is responsible for debts

• Financial support from one party to another during cohabitation and if the relationship ends

• Financial support for children

• How Wills, pensions, and life insurance will handled.

It is a common misconception that those who are unmarried but in a long-term relationship enter into a ‘common law marriage’ and are, as a consequence, legally protected in the event of separation. However, this is not the case. A cohabitation agreement helps secure these protections for cohabiting couples and provides security during and after the relationship.

Why would you want a cohabitation agreement?

There are many benefits and reasons for having a cohabitation agreement. Cohabitation agreements protect your financial interests during the relationship and in the event of separation. A cohabitation agreement also gives you the flexibility and freedom to organise your finances freely. 

Many household situations can benefit from signing a cohabitation agreement, including security for your children or understanding financial responsibilities in your relationship. Cohabitation agreements detail ownership and responsibilities during and after the relationship, saving costly litigation fees and preventing the need to consult a lawyer to regain or protect your assets if you separate. This agreement can also provide additional security for your children if the relationship ends, detailing arrangements for childcare, support, and custody during and after the end of the relationship.

A cohabitation agreement offers clarity and guidance if you or your partner were to die during your relationship. It can state the estate of the deceased to prevent disputes arising over ownership of assets following death.

With the current law in England and Wales, cohabitees cannot claim maintenance or a share of their former partner’s assets as if cohabitation ends.  

Is a cohabitation agreement the same as a prenup? 

No, cohabitation agreements are for those who are unmarried or in a civil partnership but want the same protections over their finances and assets as married couples.

A prenuptial agreement or ‘prenup’ is for those who will be getting married and want clarity over their finances and assets. A prenuptial agreement is not legally binding but can be upheld in a court of law. Speaking with a prenuptial agreement solicitor can help you create a legitimate agreement.

Is a cohabitation agreement legally binding?

A cohabitation agreement is legally binding if done correctly. To ensure your document is legally binding, speak with cohabitation agreement solicitors like us at Guillaumes LLP. You can challenge a cohabitation agreement if there is proof of fraud, duress, undue influence, misrepresentation, mistake, or illegality.

What should be included in a cohabitation agreement?

A cohabitation agreement should cover various aspects of your life together, including:

• Ownership of property and how it will be divided if you separate

• Financial arrangements, such as contributions to household expenses and joint accounts

• Debts and liabilities, specifying who is responsible for what

• Arrangements for children, including parental responsibilities and financial support, and

• What happens to jointly owned assets, such as cars or pets

When should you create a cohabitation agreement?

There is no set rule to sign a cohabitation agreement by two cohabitees. For example, if planning to buy a house together, execute the agreement on completion, ensuring intentions are clear from the outset.

On the other hand, if you’ve already purchased a property for both parties to live in, a cohabitation agreement can be entered at any time, whether before or after cohabitation has begun.

Can we include provisions for our children in the cohabitation agreement? (H3)

Yes, you can include provisions for children in your cohabitation agreement, covering financial support, living arrangements, and parental responsibilities. For example, an unmarried parent with a child or plans to start a family with the other party should consider where and with whom the child will live and the need for any financial provision for the child if cohabitation ends.

How do we create a cohabitation agreement?

Creating a cohabitation agreement involves several steps:

• Discuss and agree on the terms with your partner.

• Both partners should disclose their financial positions fully.

• Each partner should seek independent legal advice to ensure they understand the agreement and its implications.

• Draft the agreement with the assistance of a family law solicitor.

• Review and sign the agreement, ensuring both parties voluntarily agree to the terms.

Can we change our cohabitation agreement later? 

You can amend or update a cohabitation agreement whenever both parties agree to the changes. It is necessary to change in writing and ensure both parties receive independent legal advice before signing the revised agreement.

What happens if we don’t have a cohabitation agreement and we separate?

Separating couples might face uncertainty and potential disputes over property and finances without a cohabitation agreement. Unlike married couples, cohabiting partners do not have automatic rights to each other’s property, which can lead to complex legal battles. A cohabitation agreement helps prevent such issues by clearly outlining each partner’s rights and responsibilities.

How much does it cost to create a cohabitation agreement?

The cost of creating a cohabitation agreement can vary depending on the complexity of the agreement and the solicitor’s fees. It’s advisable to discuss fees upfront with your family law solicitor to understand the potential costs involved.

Is a cohabitation agreement necessary if we plan to get married in the future?

While it is not strictly necessary, having a cohabitation agreement can still be beneficial, even if you plan to get married later. It provides protection and clarity during your cohabitation period. When you marry, the cohabitation agreement can sometimes change into a prenuptial agreement with legal assistance.

Can we draft a cohabitation agreement without a solicitor?

We highly recommend to seek legal advice when drafting a cohabitation agreement. Cohabitation agreements solicitors will ensure that the agreement is legally sound, fair, and tailored to your specific circumstances. Independent legal advice for both parties helps ensure the agreement is enforceable in court.

What if my partner refuses to sign a cohabitation agreement?

If your partner refuses to sign a cohabitation agreement, it is crucial to have an open and honest discussion about the reasons and concerns. Understanding each other’s perspectives can help reach a mutually agreeable solution. Consulting with a family law solicitor can also guide how to proceed.