In the unfortunate event that you and your partner were to separate, a cohabitation agreement can help protect you financially. Below we’ll take a look 5 things you should include in your agreement…
If you’re planning to move in with your partner or have already been living together, it’s important to understand the legal status of your relationship. Unlike the concept of common law marriage, cohabiting couples in the UK don’t automatically have the same rights as married couples.
To safeguard your property and ensure a fair and equal partnership, you should look into cohabitation agreements. This agreement can outline the division of property, finances and responsibilities in the event of separation. Protecting your rights and assets now can give you peace of mind and avoid conflicts in the future.
What is a Cohabitation Agreement?
A cohabitation agreement is a legal contract between partners who live together but are not married. It outlines the terms of their living arrangements and details how they plan to manage their finances, property and other assets. This agreement provides a clear understanding between partners and can help to avoid disputes if the relationship ends.
So, let’s take a look at the things you should consider including in the agreement…
Cohabitation agreements can encompass properties held in joint names or solely in one partner’s name. The agreement should outline each partner’s ownership and share of the properties, including their ‘beneficial interest’ in the net sale proceeds.
This should be reflected in the title deeds through a deed of trust. Matters such as mortgage payments, utility bills, endowment policies linked to the mortgage, and life insurance policies should also be considered and clearly defined in the agreement. This includes who is responsible for payments and how they will be handled in the event of a separation.
It’s important to take into account the potential establishment of a joint bank account, the fairness of contributions, and the division of the funds in case of separation. Also, the allocation of pensions or death-in-service benefits to a partner should be considered, subject to the agreement of the respective pension scheme.
Inheritance and Wills
Unmarried couples often have misconceptions about their legal rights when it comes to inheritance and estate planning. The common assumption is that if one partner passes away, the other partner automatically inherits their estate. However, this is not the case in the absence of a will or proper planning.
It is crucial for unmarried couples to understand that without a valid will, their estates will be distributed according to the laws of intestacy, which do not take into account the relationship between partners. This can result in the surviving partner not receiving any assets or property, even if they lived together for many years.
In addition to this, life assurance can play a crucial role in providing financial security for the surviving partner. However, it is important to make sure that the life assurance policy is set up properly, and that the beneficiaries are designated correctly.
To ensure that your wishes are fulfilled, and your partner is protected, it is crucial to have a will in place. This will give you the peace of mind that your assets will be distributed according to your wishes upon your passing. It is also important to regularly review and update your will to reflect any changes in your life and circumstances.
As a cohabiting couple with children, it’s crucial to address the welfare of your offspring in case of separation. Consider creating a co-parenting plan that outlines where the children will reside and how child support payments will be made.
Additionally, it may be worth discussing the ownership of your home and ensuring that the children have a stable living environment. If one parent’s earning capacity may be impacted by childcare responsibilities, consider making provisions for financial support.
It’s important to give consideration to the division of assets and possessions in the event of a separation. Who owns what and who will keep what can be overlooked, but it’s crucial to address these matters in advance.
If one partner earns significantly more, they may have the advantage of purchasing new household items in the event of a split. Additionally, if one party brings a valuable asset into the relationship, it’s essential to have a plan for how it will be handled in the event of separation.
The Importance of a Cohabitation Agreement
It can be all too simple to go through life as a couple assuming that everything will fall into place should something happen. However, it’s a sad truth, that unexpected things happen all the time. Moreover, having a cohabitation agreement can be a great way of ensuring everything is in place.
It will give all parties complete peace of mind knowing they are protected. Furthermore, it will also help to clear up what happens to pets, furniture, property, finances and children.
Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained legal professional. Be sure to consult a family lawyer/solicitor if you’re seeking advice on cohabitation agreements. We are not liable for risks or issues associated with using or acting upon the information on this site.