Why do I need a cohabitation agreement? The position in England and Wales
If you are a couple living together or planning to do so, it is wise to have a cohabitation agreement.
Contrary to popular belief, cohabiting couples in England and Wales do not have the benefit of any all-encompassing law either during their relationship or on separation. Current legislation, such as it is, is limited in scope, expensive to access and uncertain in outcome.
If you are a couple living together or planning to do so, it is wise to have a cohabitation agreement. An agreement can confirm or declare how you own property or other assets with or without your partner, regulate financial arrangements while you live together, detail what will happen and who will get what if you separate, and indicate what should happen if either of you dies while you are living together.
So what do you and your partner need to think about for your cohabitation agreement? Here are 10 issues to consider:
- Children: do you have or plan to have children? How will they be provided for if you separate?
- Property ownership: how do you want to own your house or other property? Will it be owned solely by one of you, or jointly? If jointly, in what shares?
- Running costs and repairs: what about contributions to the upkeep and repair of the property? Who will pay the mortgage? If one of you pays more towards the property or contributes to improvements, is it agreed that they should be reimbursed or gain a greater share of the property?
- Timing: what happens if you separate? Will you sell the property or will one of you buy the other out? If the property is owned by only one of you, how soon would the other person be expected to move out?
- Contents and belongings: what about the household contents? Who will keep them, particularly those jointly purchased or given to you as a couple?
- Business ventures: are you in business together? Will you continue to run the business together if you separate? Or will one of you buy the other out? For more information see our article on families and business.
- Joint accounts and investments (and debts): will you operate a joint account or other joint investments? If so, what are the arrangements and how will you separate your finances on relationship breakdown? Have you any joint debts? If so, you are jointly and severally liable for the debt, whoever runs it up.
- Death and wills: what about the death of one of you while you are a couple? How will you provide for the survivor? Will they have the right to remain in the home or receive anything from the deceased’s estate? Do you need to make a will to put your wishes into effect?
- Plans to marry: are you engaged and/or planning to marry? Do you need a prenuptial agreement as well as a cohabitation agreement?
- Third parties: is it just you and your partner who will live in the property, or will you allow others to do so? If so, what will the arrangements be?
With some forethought, a cohabitation agreement can be prepared which should address many of the questions that commonly arise during cohabitation or when cohabiting couples separate, and help to avoid much pain, cost and uncertainty.
If you need guidance on living together as an unmarried couple, contact our cohabitation solicitors.