8 reasons why you need a cohabitation agreement if you are living together

Aka there is no such thing as a common law wife or husband

By Jennifer Carr – Associate Solicitor

No happy couple living together likes the thought that they might break up, let alone talking with their partner about what might happen.

This article includes eight reasons why drawing up a cohabitation agreement can offer peace of mind and protection during your life together.

Where do you legally stand if you live together?

Contrary to popular belief, there is no such thing as a ‘common law marriage’.

Today, many people are choosing the ‘test before you buy’ approach – if you pardon the expression! Many couples are now living together before they get married or choosing to cohabit together indefinitely. Did you know that cohabitating with someone does not entitle you to the same legal rights as you are not bound together in the eyes of the law. This can cause issues between cohabiting couples and bitter break-ups can lead to confusion between the rights of each person in the relationship; sadly the reality is that if you are not married or in a civil partnership, you have absolutely no legal rights in a relationship.

This confusion can be settled by a cohabitation agreement.

A cohabitation agreement usually covers the financial aspects of your relationship while the parties are living together, and sets out who gets what if the relationship ends. This can include any property you own or rent, your financial split of household bills and expenses, and what happens to jointly owned property.

As well as financial concerns, here are 8 reasons for deciding to enter into a cohabitation agreement:

  1. You wish to divide your assets as a married couple would.
  2. You are purchasing a home together.
  3. One party is contributing more to the purchase of a home than the other.
  4. You have children or are hoping to have children in the future.
  5. To decide who will pay certain debts or bills.
  6. What proportion of share in the property each person will hold.
  7. What would happen to assets in the event of a separation.
  8. Who would be nominated for death in service benefits.

Below are prime examples of how a cohabitation agreement can help in some of the common situations above.

Buying or moving house together

Along with the excitement of moving can be conversations about who pays for what and how much. The more difficult part is also talking about how finances and assets should be divided in the event of a break up, which is also actually an essential thing to do. 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.

Setting out how assets should also be divided in a cohabitation agreement before a relationship starts to break down prevents that horrible inevitable conversation of ‘who gets the dog’ or the prized vinyl collection.

Receiving an inheritance to buy property

People who receive money from their parents or get a loan by themselves 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.

Relationship breakdown

Cohabitation agreements are also cost effective and a way to avoid acrimonious litigation, should the relationship break down. Taking legal action is usually lengthy and costs a significant amount of money so is definitely something to be avoided where possible. Furthermore, if you are the unsuccessful person in the proceedings, you may be liable to pay for all of the legal costs from the person who wins.

Why a cohabitation agreement makes sense

So, if you are thinking about the following:

  • buying a property with your partner
  • putting your partner on the mortgage
  • have inherited money which is going toward buying property
  • want to avoid costly litigation

We would strongly recommend that you enter into a cohabitation agreement with your partner.

This step taken now will offer peace of mind and protection by helping to avoid confusion about what will happen to children, property, other assets and pets, in the event of the relationship breaking down.

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