What are Relationship Agreements?
Relationship agreements are legal documents that outline the rights, responsibilities, and financial arrangements between couples who are living together, planning to live together, married, or planning to get married, or planning to separate.
Are Relationship agreements a good idea?
Relationship agreements provide legal protection, clarity, assurance, mutual understanding, and peace of mind. They can cover a wider range of aspects in a relationship beyond just living arrangements. They can cover aspects like respect, personal needs, expectations, personal boundaries, and conditions in the event that a relationship ends.
Relationship Agreements are useful for protecting assets, inheritances, and financial contributions. They can help prevent misunderstandings and reduce potential conflicts.
What are the different types of Relationship Agreement?
There are various types of relationship agreements including Cohabitation, Prenuptial, Postnuptial and Separation agreements.
Cohabitation Agreement.
A Cohabitation Agreement is a legal document for unmarried couples who already live together or intend to cohabit, and do not wish to get married or enter into a civil partnership.
Any opposite or same sex couples who are not married or civil partners can enter into a Cohabitation Agreement. It is a formal way for couples to protect their individual interests and provide clarity on issues that may arise if they split up.
An agreement can outline the rights and obligations of each party during the cohabitation, and also in the event of the relationship ending. The agreement can cover various aspects such as property rights, financial arrangements, responsibilities for bills and debts, and arrangements for any children.
It is a good idea for a couple to enter into a Cohabitation Agreement when one of the following events occurs:
- When they purchase a property together, or make other substantial investments such as getting a joint mortgage.
- When they decide to have children, or adopt a child.
- When they experience a significant life event such as illness, unemployment, or receiving an inheritance.
- Following the end of a previous relationship, and receipt of a financial settlement to ensure the settlement is protected.
What legal rights do unmarried couples have?
In England & Wales, unmarried couples have significantly fewer legal rights compared to married couples or civil partners.
Despite popular belief, there is no such thing as common law marriage, regardless of how long a couple has lived together.
The law treats unmarried partners as separate individuals rather than a couple.
Unmarried couples have no automatic inheritance rights or claims to their partner’s pension on death. Therefore, if one partner dies without a Will, the surviving partner has no automatic right to inherit their estate. An unmarried partner is not automatically considered next-of-kin in medical situations.
Even if an unmarried couple live together in a home owned by one party, the other party does not automatically have rights to that property.
An unmarried partner does not have any claim for maintenance for themselves. They may however claim child maintenance if they have children together.
An unmarried father will only have parental responsibility if he is named on the birth certificate.
At present, a Cohabitation Agreement provide the most comprehensive legal way for couples who are not married or in a civil partnership to legally protect and clarify their rights, obligations, and responsibilities both during their relationship, and in the event of it breaking down.
Prenuptial and Postnuptial Agreements.
A Prenuptial Agreement or Prenup is a contract entered into by a couple before marriage or civil partnership. The main purpose of a Prenuptial Agreement is to specify how financial matters will be dealt with in the event of a divorce or separation.
Without a valid Prenup, the starting point for the division of assets in divorce is an equal split, however courts have discretion to depart from the starting point.
A Prenuptial Agreement can protect the following assets:
- Premarital assets and property owned by each spouse before the marriage.
- Assets received from a settlement under a previous divorce.
- Inheritances or gifts received by one spouse during the marriage.
- Business interests or intellectual property owned by one spouse. A prenup can ring fence a business from being affected by the breakdown of the marriage and protect its ownership.
- Pensions or shares owned by either spouse.
Prenuptial Agreements are not just for the rich and famous, or people with significant assets. They can be beneficial for couples of all financial backgrounds.
Here are some examples of couples who could benefit from entering into a prenup:
- Individuals who are likely to receive family wealth, heirlooms, or future inheritances.
- Couples entering second or subsequent marriages who wish to protect any assets or property from their previous marriage.
- Older individuals who have accumulated significant pre-marital assets or property.
- A couple where one partner earns substantially more than the other. A prenup can clarify financial responsibilities and expectations.
- Entrepreneurs and existing business owners who wish to safeguard their business interests in the case of divorce.
- Couples with significant debt who wish to protect themselves from being liable for the other’s pre-existing debts.
Postnuptial Agreement
A Postnuptial Agreement is a legal document entered into by civil partners or married couples any time after a civil partnership or marriage. It can be done immediately, to many years later.
An agreement typically covers the division of assets and property, and financial arrangements in case of a separation or relationship breakdown.
Postnuptial agreements can be updated to reflect changes in the couple’s situation such as one party receiving an inheritance.
Separation Agreement.
A Separation Agreement is a legally binding contract between separating couples that outlines the terms of their separation.
An agreement is useful for couples who are not ready or able to divorce immediately. The document provides legal protection and clarity on separation terms, and can be used as a basis for divorce or dissolution proceedings at a later date.
A Separation Agreement must be in writing, signed by both parties, and witnessed.
Full financial disclosure is also required for the agreement to be valid.
What are the benefits of a Separation Agreement?
A Separation Agreement offers a couple an amicable and structured way to manage their separation, and is beneficial in the following ways:
Agreements provide clarity by specifying the agreed responsibilities and arrangements during the party’s separation. This can be particularly important if one party is financially dependent on the other.
An agreement formalises a separation and can be enforced by the courts, if necessary, as a contract. If the couple later decide to end their relationship, a Separation Agreement can act as a foundation for their financial settlement.
An agreement can also specify arrangements for children, including living arrangements and child maintenance.
It allows couples time apart to reflect and decide if they want to end their marriage or civil partnership.
An agreement is less permanent than divorce or dissolution and allows the couple to reconcile. It, however, provides a clear framework for both parties and reduces any misunderstandings during the separation.
Are Relationship Agreements legally binding?
Relationship agreements are generally considered enforceable and upheld by Courts provided both parties have freely entered into the agreement.
For any Relationship agreement to be considered legally binding or persuasive in court, it should generally meet the following criteria:
- Be in writing and signed by both parties.
- Both parties should receive independent legal advice.
- Both parties should be honest about their financial position by providing full financial disclosure.
- The agreement should be fair and reasonable at the time of signing.
- The agreement should be entered into freely, without pressure or duress.
- Both parties should have reasonable time to consider the agreement and its effects.
- It is a good idea that an agreement should contain provision for periodic reviews or updates in the event of any significant life changes such as the birth of a child, unemployment, or illness.