Understanding Cohabitation Agreements: Part 1

Common law wife/husband?

There is a common misconception that there is something called a "common law marriage" This does not exist. This often comes as a shock to separating unmarried couples who believe that they will be entitled to the same as a separated spouse.

Cohabitation is becoming increasingly more important as the number of couples who choose not to marry but live together grows over the years.

What is a Cohabitation Agreement?

Separating from your partner will inevitably be a very emotional and difficult decision to make. Consequently it can be particularly stressful to deal with the financial and administrative issues following a separation. The idea behind a separation agreement is that it will remove this stress and the long drawn out arguments.

A Cohabitation Agreement is a written document that sets out the parties' intentions. They are useful for any couple who does not intent to get married or enter into a civil partnership. The document should detail who owns what and what would happen if the relationship ends. The couple should try and be as specific as possible as to what their intentions are. The document should answer questions like what if one party puts in a greater sum of capital? If the couple separates should the property be sold or can one party buy the other out? Couples should also give consideration to the maintenance and improvements of the property and whether this should impact their respective shares in the future. Other issues to be considered include joint debts, personal possessions, cars and even child arrangements. This is not an exhaustive list and each couple's personal set of circumstances should be discussed with their legal advisor.

We appreciate that having this discussion with your partner will be difficult however it is important to protect yourself.

Is the agreement binding?

If the agreement is drawn up correctly then it is a contract between you and your partner. The agreement should state that you both intend to be bound by its terms. Ideally both parties should have obtained legal advice and the document itself be signed and witnessed as a Deed.

If you choose to buy a property together then you can also have a Deed of Trust drafted by your solicitor. This provides clear evidence as to how the property is legally owned. You must also give consideration to your Wills if you wish your property to be left to your partner. As stated above an unmarried partner is not automatically entitled to any of their partner's property. Couples should also seek specialised advice on inheritance tax liability as unmarried couple do not enjoy the same exemptions as a married couple.

Is a Cohabitation Agreement for life?

The short answer to this is no. It is advisable to review your cohabitation agreement every five years so upon a change of circumstance for example the birth of a child. Furthermore if you marry the document could potentially be considered in future divorce proceedings.

How much will this cost?

Every couple's situation is different and therefore we will be able to give you an estimate at our first meeting. We offer a free 30 minute consultation and during this meeting we will be able to provide you with a time and cost estimate.

Who do I contact?

Please contact Lucia Mills on 0117 9292811 or you can e-mail her directly at lucia.mills@wards.uk.com