Cohabitation Agreements – What you Need to Know

An increasing number of couples choose to live together before getting married or without getting married to one another.

According to the Office for National Statistics (ONS) the total number of cohabiting couples increased to 3.6 million in 2021, an increase of 144% from 1996.  In 2021, 22% of couples who lived together were unmarried.

Cohabitation

The definition of a cohabitation is broad.  It usually refers to people living together, usually as a couple, without entering into a marriage or civil partnership. The ‘period of cohabitation’ is simply the length of time the couple are living together.

Couples who are cohabiting have fewer rights and responsibilities to one another than couples who have married.  Cohabitation does not necessarily always lead to a marriage, but the law continues to be slow to recognise this modern reality.  However, cohabiting couples are able to agree a position on their property and assets much in the same way as a couple may enter into a pre-nuptial agreement prior to getting married.

When a relationship between an unmarried couple ends, a divorce is not necessary.  However, a number of erroneous assumptions continue to prevail when it comes to relationships between unmarried couples which can lead to unexpected consequences.

Risks

If an unmarried couple are living together and their home is owned solely by one of them, the other person will generally own no legal interest in the property.  This is the case even if that person was making regular contributions (financial and otherwise) towards the maintenance and upkeep of the couple’s home.  Their payment of household bills, even over the course of many years, will not be sufficient to generate ownership.  That person’s contributions will need to be significant and have added material value to the property.

Regardless of how long the unmarried couple were living together, if one of the couple dies without having made a Will or having made a Will which excludes the surviving person, the surviving person does not have an automatic right to financial support or to inherit their deceased partner’s estate, including their home if it was owned solely by the deceased partner.  The surviving person will be unable to claim any interest in their deceased partner’s assets regardless of the duration of their relationship or how long they have lived together unless they can sufficiently demonstrate that, immediately before the death of their partner, they were being maintained, either wholly or partly, by their deceased partner.  This would likely involve a prolonged and expensive claim being made to the Chancery Court under Inheritance provisions.

Any property or assets that are owned jointly between the couple will be divided according to legal ownership, in the event of the death of one person in the relationship.  The precise manner in which the assets will be divided depends on the type of asset and the form of joint ownership under which the asset was held.

Managing the Risks: Cohabitation Agreements

A Cohabitation Agreement is a written document between a couple who are not married and who are living together or intending to start living together.

The couple can set out a broad range of matters in a Cohabitation Agreement, such as who owns specific assets; what will happen to the couple’s assets in the event of the relationship ending; who is responsible for bills and expenses during the relationship; what contributions will be paid towards the upkeep of property; how any children’s needs will be met; how any jointly held assets such as bank accounts and investment properties will be divided if the relationship ends; and how the position may change after a particular period of cohabitation.

One key benefit of Cohabitation Agreements is that they can be very flexible and cover wide-ranging matters whilst providing certainty to both individuals.  A second key benefit is that they are useful documents to have already in place in the event that the relationship breaks down and communication becomes strained.

The Cohabitation Agreement can be varied (by written consent) as the relationship advances or the nature of the relationship changes, and the Agreement can also be revoked or replaced in the event of marriage by a pre-nuptial agreement and/or post-nuptial agreement.

Cohabitation Agreements are a practical step for all unmarried couples who are living together or intending to do so.  They are particularly useful in circumstances where only one person owns the property that the couple will be living in together, for couples who intend to buy a property together or start living together, particularly at an early stage of their relationship, and for mature couples living together and bringing individual wealth into the relationship.

Receiving professional advice from a Solicitor on your rights and entitlements before entering into any formal agreement with your partner can help protect you from unfair arrangements and potential losses now and in the future.

Aside from Cohabitation Agreements, you can also take steps to secure the future of your long-term partner and your children by having a Will in place to ensure your partner and /or children are adequately provided for in the event of your death.  One may also wish to consider if your home should be held in one of your sole names or held in your joint names.  It is important that you receive independent legal advice on these important considerations before taking any such steps.  The Private Client team at Cleaver Fulton Rankin are best equipped to provide you with legal advice that enables you to make informed personal decisions that are in your best interests.

For further information on cohabitation agreements or any of the issues raised in this article please contact Ryan Elliott in our Family & Matrimonial team.

This article has been produced for general information purposes and further advice should be sought from a professional advisor.