Cohabiting Couples – Three reasons why you should consider entering into a Cohabitation Agreement
As a follow-up to our recent article Cohabiting Couples – Three reasons why you need a Will, Ellie Davies, Solicitor in our Family Team sets out three reasons why entering into a Cohabitation Agreement is so important for couples choosing to live together.
Cohabitation is becoming increasingly common in modern relationships, as many couples are choosing to live together before getting married/not getting married at all.
At the moment, the law surrounding cohabitation doesn’t offer the same level of protection as the law afforded to married couples. If a couple is cohabiting and their relationship comes to an end or one of them passes away, they will find that there are very different laws in relation to property, pensions and inheritance for married couples in comparison to those who are cohabiting.
In order to avoid the uncertainty that cohabitating can often bring in the eyes of the law, couples can find reassurance in entering into a Cohabitation Agreement.
What is a Cohabitation Agreement?
If you live with your partner or are planning to live together in the near future, you can enter into a Cohabitation Agreement which sets out, amongst other things, matters such as the ownership of existing assets, what each person’s financial responsibilities are, and how savings and jointly owned assets should be distributed in the event the relationship comes to an end. A Cohabitation Agreement is a bit like a Prenuptial Agreement for unmarried couples.
With this in mind, here are three key reasons why couples should consider entering into a Cohabitation Agreement:
Protecting assets
Couples often bring their own personal assets into a relationship (such assets include savings, investments, or property) which they may wish to protect. These assets can become vulnerable in the event of the breakdown of a relationship and so a Cohabitation Agreement is a useful tool in such an instance as it can set out who owns what and in what proportion the assets should be divided if a relationship comes to an end.
Clarifying financial responsibilities
A Cohabitation Agreement can clearly set out the financial responsibilities of the parties within the relationship. Such an agreement allows couples to outline how they plan to manage their day-to-day finances to include joint expenses such as rent or mortgage payments, household bills, and debt repayments.
Whilst these aspects might be clear during a relationship, financial disputes can often arise when the relationship comes to an end. Having a clear and agreed plan upfront can prevent misunderstandings and potential conflicts later down the line, ensuring both parties are clear on their financial responsibilities.
Future planning
Cohabiting can be as much a long-term commitment as marriage whilst not carrying the same legal implications, and as a result, future planning is important to consider when couples are in a cohabiting relationship.
Entering into a Cohabitation Agreement can allow couples to plan for the future and consider various scenarios and life events which may occur such as what happens in the event of the breakdown of the relationship, illness, or death. Entering into an agreement with a forward-thinking approach can give couples the clarity and security they need.
A Cohabitation Agreement allows parties to agree on things in a fair way at the outset without the pressures that can arise if a relationship breaks down.
If you would like advice on entering into a Cohabitation Agreement or have any questions around cohabitation in general, the team will be happy to have a no-obligation consultation to discuss your situation. Please do get in touch with the Leathes Prior Family Team on 01603 610911, email us at info@leathesprior.co.uk, or get started via our online tool here.