The Cohabitation Agreement
Cohabitation is now the fastest growing type of family with approximately 3.6 million couples currently living together in the United Kingdom. The number of couples choosing to live together (cohabit) in a stable intimate relationship, without getting married or entering a civil partnership, in what some people refer to as “a common law marriage”, increased by 144% between 1996 and 2021.
Despite its popularity, cohabitation gives no general legal status to a couple, unlike marriage and civil partnership from which many legal rights and responsibilities flow. For couples who are living together or have shared assets, this can lead to issues and uncertainties upon the relationship breakdown.
If you cohabit rather than get married or enter a civil partnership you have:
- no automatic rights to your partner’s property in the event of their death
- no automatic entitlement to inherit their estate, even if you have children.
- no tax reliefs or exemptions that spouses and civil partners enjoy, including pensions.
Basically, neither party in a cohabiting relationship is entitled to any financial support or a share in the other’s assets if the relationship ends.
What is the solution?
Currently, the only way for unmarried couples to gain legal protection in the event of a break-up is to be married, in a civil partnership or to enter into a cohabitation agreement. An agreement (sometimes called a living together agreement) can grant cohabiting couples legal protection, allowing them to legally define and protect their share of the property, and other financial matters in the event they decide to end the relationship.
What is a Cohabitation Agreement?
It is a legal document between unmarried couples (whether as a opposite or same sex couple) who are living together. It can specify the ownership of existing assets (including property), what your financial responsibilities will be towards each other and how savings and jointly owned assets will be distributed should your relationship break down.
An agreement encourages a couple to think about fair ways to organise their finances and what will happen if their relationship ends. Making an agreement is not an admission that you think your relationship will fail, but simply a contingency plan for the future.
Who can enter into a Cohabitation Agreement?
Any opposite or same sex couples who are not married or civil partners can enter into a Cohabitation Agreement. It is recommended for those who already live together or intend to cohabit, and do not wish to get married or enter into a civil partnership.
What should a Cohabitation Agreement include?
A cohabitation agreement is a legally binding contract between two individuals who are living together but are not married or in a civil partnership. It sets out the terms of their living arrangement and can include a wide range of provisions related to financial and property matters. An agreement can include:
- Ownership of property, and how it will be divided in the event of a split.
- Record the payment of any deposit on your home.
- What share of the mortgage or rent you will pay?
- How household bills will be dealt with
- Bank accounts and money
- Life insurance
- Pensions
- Assets such as cars, furniture, other property, jewellery
- Payment of debts
- Pets
- Next of kin rights
- Outline a process for resolving any disputes that may arise between the parties.
- Set out the circumstances under which the agreement will terminate, such as marriage, civil partnership, or the end of cohabitation.
It is important to note that a cohabitation agreement must be fair and reasonable to both parties.
Can an agreement be modified after it is created?
Yes, a Cohabitation Agreement can be modified once it has been created. It is advised that you keep it updated as your relationship changes or if anything significant happens in your relationship. Key reasons may include the following:
- The birth of children
- One of you becomes seriously ill.
- One of you becomes disabled.
- One of you is made redundant.
- Your financial circumstances change significantly.
- One of you receives a large inheritance.
- You plan on getting married or entering a civil partnership.
When should I get a Cohabitation Agreement?
It is never the wrong time to make a cohabitation agreement. Ideally you would make an agreement when you first move in together, but late is definitely better than never.
What are the benefits of a Cohabitation Agreement?
A Cohabitation agreement can provide peace of mind in your relationship. It can help to avoid the kind of arguments and minor worries that can build up over time or that might cause difficulties in the future. By reaching an agreement before or whilst you are living together, you will:
- have a clear understanding of what your financial commitments are.
- avoid misunderstandings regarding your rights and responsibilities as you continue to live together, with regards to ownership of property
- avoid difficulties and disagreements if you split up.
- have clear evidence of your intentions should a dispute ever arise.
An agreement can also be useful if one of you becomes seriously ill or dies. It will protect you both, and any other family members who will be affected.
For example, an agreement can make sure you have:
- a share of each other’s assets
- access to each other’s state pension
- next of kin rights in a medical emergency
Are Cohabitation Agreements legally binding in the UK?
Cohabitation Agreements are legally binding when executed correctly. They should be properly drafted to ensure the agreement is clear and unambiguous, and signed as a deed. Courts typically uphold and enforce these agreements, ensuring that the terms outlined within them are legally recognised and followed.
What rights do cohabitating couples have in UK?
If you cohabit rather than get married or enter a civil partnership, you DO NOT receive the same level of protection as a couple in a marriage or civil partnership. In general terms the current law treats you as two unrelated individuals.
The current law relating to cohabiting couples and property rights states you have:
- no automatic rights to your partner’s property in the event of their death
- no automatic entitlement to inherit their estate, even if you have children.
- no tax reliefs or exemptions that spouses and civil partners enjoy, including pensions.
- No rights to be financially supported by your partner.
Basically, neither party in a cohabiting relationship is entitled to any financial support or a share in the other’s assets if the relationship ends.
Frequently asked questions
How much does a Cohabitation Agreement cost?
As specialists in divorce and family law with backgrounds as Solicitors, Mediators and Collaborative Lawyers we offer couples focused approached solutions and services to meet your objectives.
Can I make a claim on my partner’s pension?
Generally speaking, unmarried couples do not have any right to benefit from their partner’s pension, unless they are formally named as a “nominated beneficiary”. Although in respect of the Local Government Pension Scheme, there is currently an exception to this rule.
What evidence do I need to prove cohabitation?
The existence of an Agreement signed by both parties is excellent proof of cohabitation and the terms of your living together.
What is common law marriage?
Common law marriage does not exist. There is a common misconception that if a couple have lived together for long enough, they are effectively treated as married in the eyes of the law, and automatically gain rights equal to a marriage or civil partnership. This is false.
If a couple cohabits rather than gets married or enter into a civil partnership, they DO NOT receive the same level of protection. In general terms the current law treats an unmarried couple as two unrelated individuals. Neither party will be entitled to any financial support or a share in the other’s assets if the relationship ends.
What is my girlfriend entitled to if we split?
In general, unmarried couples do not have the same legal rights to property as married couples. If the property is owned outright by one party, the other partner may not have an automatic right to any share of the equity.
To claim an interest in a property owned by one party it is necessary to show evidence of a beneficial interest in the property, such as contributions to the mortgage or home improvements.
If the couple jointly owns the home, they will be entitled to continue living in the property after the split, until the property is sold. The net equity will then be split depending on how the property is jointly held.
