Cohabitation agreements: where do unmarried couples stand?
There is a myth that couples who cohabit for a long period of time are married under common law. This myth is untrue. Couples who live together do not have the same rights as couples who have married or entered into a Civil Partnership. The reality is if you choose to live with your partner and that relationship ends you are not protected by the law in the same way as those who have either married or entered into a Civil Partnership.
Cohabiting couples are the fastest growing type of family unit, and as the law doesn’t provide basic protection to these families (including those who have children) it is important that you take the necessary steps at the outset to protect your finances and property should your relationship breakdown.
It is not always clear who owns what when a relationship ends. Whereas married couples or those in Civil Partnerships who divorce can have their property legally divided, unmarried couples without proof of ownership do not have the same rights. The court is also limited in its powers as to what they can order. When a married couple divorce, the court has a wide discretion to make orders based upon what the husband and wife need, and what they can afford. The court in a case where a couple have lived together do not have the same discretion. In these cases, the court has to look at the property rights, the intention of the couple and how finances were divided. This means that there may be a real inequality for a couple.
There is no automatic right of inheritance unless you have specifically been named in a will, and if a will has not been created, a cohabiting partner is not entitled to share in or make claims on their deceased partners estate.
A cohabitation agreement can help provide some clarity should the relationship end. The agreement will set out both parties intentions around property, finances and how they would support any children of the family at the point of separation. If you are acquiring property jointly, you should ensure that both of you have had a discussion about what you want to happen when you separate. You should tell your solicitor and they can advise you how best to secure that position legally. In addition, a cohabitation agreement can make it clear what you both intended at the time you signed the document, and can detail how future contributions are made, whether you keep certain property or savings yourself, or whether you share them. You should also consider taking out the necessary life insurance and making a will.
Cohabitation agreements are not automatically legally binding. However if:
- The agreement has been prepared properly
- The terms are not inherently unfair to the other party
- You have both taken independent legal advice
- One party is not being pressured by the other, by a third party or an impending change of circumstances to enter into the agreement
The court can consider the agreement as evidence of what your intentions were at the time.
If you are considering cohabiting with your partner and you wish to protect your assets, please contact a member of our family team on 0800 8 60 62 65 to discuss how such an agreement could assist you.