Are you moving in with a partner and would like to set out who owns what? Perhaps you would like to have a written agreement for financial arrangements. A cohabitation agreement may be the solution.
Changes in society over the years have seen more couples in the UK choosing to marry later or not at all and while cohabitation is on the rise, many people are unaware that cohabitees do not enjoy the same legal protections or financial benefits under UK law as those who are married or in a civil partnership.
Whether you are taking the plunge for the first time and moving in with someone, or perhaps you are a divorcee moving on, having a cohabitation agreement in place is a useful way to protect both you and your partner should the relationship come to an end. It can also help with dividing up bills and other outgoings while you live together.
What is a Cohabitation Agreement?
A cohabitation agreement is a bespoke legal document that is drawn up based on the agreement made by two people planning to live together (either as partners or just friends), that deals with three principal areas:
- Who owns (and owes) what at the time of the agreement, and in what proportions
- What financial arrangements you have decided to make while you are living together
- How property, assets and income should be divided should you part ways
Planning your Cohabitation Agreement
The first and most obvious point is that you need to put your cohabitation agreement in place before moving in together. The process typically starts with a discussion between you and your partner on how you would like your assets (savings, pensions, investments, and of course your property) and liabilities (mortgages, loans, debts etc) to be divided should your relationship break down.
Preparing the agreement might be viewed as lacking emotion and assuming the worst will happen, however, we say it is far better to think of it as a process of openness and transparency to ensure you are both on the same page!
As your solicitors, we will be a helpful advisor through this process. To prepare the agreement for you, we will typically require the following information:
- What you each wish to achieve
- Details of your assets and liabilities and their values
- Details of your incomes
- What outcomes you wish to achieve for your current and any future children
- Details of any expected inheritances or other money you expect to receive
It is very important that both parties give a full and honest account of their financial situation at this point. Failing to do this increases the likelihood that the agreement will be challenged by one party or even disregarded by the courts should the relationship fail in the future.
What are the benefits of having a Cohabitation Agreement?
- Clarification of responsibilities and specific arrangements
- Legal Protection
- Avoids potential disputes
- Financial Security
- Estate Planning
- Peace of Mind
Do you still need a Will if you have a Cohabitation Agreement?
If you or your partner dies, the normal rules of probate/intestacy will apply (see our more detailed page for the full rules). However, your partner’s wishes regarding shared assets and property are more likely to be respected in the event of death, even if you are not legally married if you have a cohabitation agreement in place. However, it is important that you also make a Will, to reflect the agreement reached and accurately record what you want to happen to your Estate after your death.
How can Backhouse Solicitors Help?
The Family Law team at Backhouse Solicitors are here to help get the ball rolling and make sure the correct steps are followed to make the agreement as full and complete as possible. For more information and advice or to book a free 30-minute consultation, contact our friendly team of experts today.
Tel: 01245 893400
Email: info@backhouse-solicitors.co.uk
Visit: 17 Duke Street, Chelmsford, CM1 1JU
Or send us a message through the Contact Us page on this website.