There is a recent trend of more and more couples choosing to live together before seeking to enter into a civil partnership or having their relationship legally recognised through marriage. This is known as cohabitation and it has grown to be the second largest family type.  Couples who chose to cohabit do not have the same financial protection and security as is afforded to married couple or those in civil partnerships.

This short article discusses how entering into cohabitation agreements can alleviate some of the problems described above and the circumstances that a person might consider entering into one.

What are the risks of cohabiting?
  1. There is no permanency with cohabitation. While more people are opting to cohabit with their partners, there is no guarantee that their relationship will last, with most ending after 6 years or less.
  2. Uncertainty. Many people choose to marry because it offers a potential destination and final goal, which makes the decision to stay easier because it takes more work to just leave.
  3. Less financial benefits. Listed below are a few examples of what married couples are entitled to but cohabiting couples are not:
    • Spouses do not pay an estate tax.
    • Medicare, Social Security, and veteran’s benefits transfer to spouses.
    • Health insurance costs are lower for married couples compared to cohabiting couples.

Extra steps are needed to secure your estate. If you cohabit rather than get married, then you must take extra steps to ensure your estate goes to your partner if something happens to you, for example, creating a valid will to shift your assets to your spouse. Whereas spouses generally inherit all property without needing to draft a will.

How does a Cohabitation Agreement help?

Cohabitation Agreement (a living together agreement) is a legally binding agreement which can be put in place between a couple who live together, but are not married or in a civil partnership. The agreement allows you to enter into a legally binding contract with the person that you live with. This agreement can cover matters such as the ownership of existing assets (including property), what your financial responsibilities will be and what will happen to shared money and assets in the event that the relationship breaks down or upon separation. 

Why might I need a Cohabitation Agreement?

A cohabitation agreement is essential if you wish to protect your share in a property, record financial obligations and provide a clear definition of how a property is owned. 

Furthermore, cohabitation agreements have other advantages, such as, creating certainty and clarity, thereby avoiding current uncertainties that surround it due to the lack of legal protection given by common law to couples who choose to cohabit. Fundamentally, they establish your current and future entitlements , thus protecting your future as well as your child/children following the break down or separation from your partner.  

Finally, cohabitation agreements can save you a lot of time and money if you decide to separate whilst living together. Similarly, cohabitation agreements also make matters clear and avoid potential disputes in the event that a person passes away whilst cohabiting. 

How can I into such  agreement?

Our Family Law Solicitors can draft a cohabitation, pre-nuptial or post-nuptial agreement for a fixed fee which we will agree with you upfront before any work starts.

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