The Importance of a Cohabitation Agreement
21 September 2021 by Aimee Edwards
Between the years of 1996 and 2020 there was a 137% increase in the number of couples deciding to live together. In today’s society it is extremely common for couples to move in together prior to getting married or entering into a civil partnership, and many couples do not have plans to ever marry or enter into a civil partnership.
Despite popular belief, there is no such thing as common law husband and wife. In fact, at present there are no specific laws in England and Wales granting rights on separation to couples who live together and are not married or in a civil partnership. As a result, no matter how long they have lived together, cohabitating couples do not have the same legal rights on separation as married couples or those in a civil partnership.
Are there any financial claims I can make on the breakdown of a cohabitation relationship?
If a dispute arises regarding the equity held within a property, for example the amount due to each individual from the equity in the jointly owned family home, if matters cannot be agreed outside of court then the parties can apply to the court under the Trusts of Land and Appointment of Trustees Act 1996. The starting point for a court would be to look at the legal ownership of the property. However, there are circumstances under trust law where financial or significant contributions can lead to a non-legal owner of a property having a claim to a beneficial interest in the property. These claims are often complex, particularly as one of the considerations a court will look at are the intentions of the parties. Intentions can sometimes be hard to prove which means that the outcome of these applications are very dependent on the evidence of the facts in each case.
There is also the possibility in some cases for unmarried parents to make an application to court when they separate for financial provision for the benefit of the children under Schedule 1 to the Children Act 1989, which can include provision of a home for children.
An unmarried individual, or an individual not in a civil partnership, who was dependant on the income of their partner would have no right to make a claim for financial support for themselves on separation. However, if the couple have children then there is financial support available for the benefit of the children in the form of child maintenance for the parent who has day to day care of the children. It is hoped parents can agree a suitable amount of child maintenance between themselves and there is an online calculator that parents can use if they wish to find out what the Child Maintenance Service would suggest. If parents are unable to agree, either parent can apply to the Child Maintenance Service to assess the amount for maintenance.
Could a Cohabitation Agreement help you?
A cohabitation agreement, or a living together agreement, could reduce the chance of a dispute arising should a cohabitating couple breakup. A cohabitation agreement can set out the intentions of both parties and this could be particularly important where one party is the sole legal owner of the property or the parties contributed different amounts to the purchase price of a property.
We would usually recommend that these agreements are drawn up prior to couples moving in together. However, this does not always happen and a cohabitation agreement can be made after a couple have started living together.
A cohabitation agreement can also include details of how household bills are paid, how the mortgage or rent will be paid and what will happen in the event of separation, including how couples will divide assets acquired between them. It is a document that can be as detailed as you wish to make it.
As there are no specific laws in England and Wales dealing with cohabiting couples, a cohabitation agreement would need to be drawn up which satisfies the rules of contract law, including the court being satisfied that the parties intend to create legal relations, even though they are living in a domestic arrangement. For this reason we would advise that both parties seek independent legal advice when looking to enter into a cohabitation agreement.
What happens if a cohabitee dies?
It is very important that if cohabitees wish for the other to benefit in the event of their death that they make a Will providing for this.
If no Will is made when an individual passes away when cohabiting with their partner, or if their Will does not make adequate provision for their cohabiting partner, then it may be possible to bring a claim against their estate under the Inheritance (Provision for Family and Dependants) Act 1975 if they were someone who was maintained wholly or partly by the deceased immediately before their death or if they lived in the same household as the deceased for a period of two years ending immediately before the date of death of the deceased as if they were married or in a civil partnership.
A cohabitation agreement can provide for someone to voluntarily give up these claims under the Inheritance (Provision for Family and Dependants) Act 1975, and this can be an important consideration in the decision to have a living together agreement.
We offer new clients their first appointment with a Family Solicitor at a fixed fee of £99 including VAT. This appointment is an hour long and will allow you to get advice from a solicitor so you know where you stand and allow you to make plans for the future.
If you would like advice about drawing up a living together agreement, please contact please contact our Family Team at 01206 700113 or email [email protected]
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