About one fifth of couples who live together in the UK do so without getting married or entering into a civil partnership. Sadly, many of those relationships will break down. When they do, each party will obviously have to seek their financial independence.
Few rights for cohabitees
Under the law as it presently stands in England and Wales one cohabitee cannot make a financial claim against their former partner, just because they lived together.
There is no such thing as a ‘common law marriage’ – former cohabitees do not have the same rights as those who were married, for example to claim maintenance, or a share of their former partner’s property.
This can obviously lead to considerable hardship for the less well-off partner. They may, for example, have been in a long relationship, living in their partner’s property and staying at home bringing up children, while their partner worked, amassing substantial assets, including a pension.
At the end of the relationship, however, they may have no claim to their partner’s property, assets or pension.
There are certain limited circumstances where a claim can be made against a partner’s property, but the law here is complex, meaning that any such claims can be expensive and uncertain. And there can also be problems if one cohabitee becomes ill or dies, as the other will not be treated as their next of kin.
So how does someone entering into a cohabiting relationship protect themselves from such things?
One way is to enter into a written cohabitation agreement (sometimes called a ‘living together agreement’) with your partner.
A cohabitation agreement is a legal document setting out arrangements for finances, property and children while you’re living together and if you split up, become ill or die.
An agreement can be made at any time, but it’s preferable to do it before you move in together.
The agreement can cover what should happen to each party’s assets if the relationship should break down. It can also deal with other matters, including arrangements for children, access to each other’s state pension, and next of kin rights in a medical emergency.
The precise terms of the agreement are obviously a matter for the parties to decide, but common terms include: what exactly will happen to the property in which the parties lived, who will look after any dependent children, and what should happen to other property, such as cars, furniture, etc.
The agreement may also deal with other matters during the course of the relationship, such as who should pay any mortgage and household bills.
Getting an agreement
A cohabitation agreement is a legal document and should really be prepared by a solicitor. There is, of course, a cost involved, but not having an agreement could end up being far more expensive.
Before the agreement is entered into both parties should give to the other full details of their finances and assets (if they do not do so the agreement may not be binding), and should seek legal advice upon the proposed terms of the agreement.
Once the terms have been sorted out, one party’s solicitor will prepare a draft of the agreement and send it to the other party, or their solicitor. And once the wording of the agreement has been finalised, fair copies will be prepared and signed by both parties.
The document can then be used as evidence of the terms that the parties agreed, for example in any future court proceedings.
Note that the agreement may need to be amended if there is any future change in the parties’ circumstances, for example when then have children, or when they buy property together. If it is not amended then it may no longer be legally binding.