Cohabitation Agreements FAQs

Cohabitation agreements are an essential tool for couples living together but not married or in a civil partnership. While many couples might assume that the law will treat their relationship in a similar way to marriage, this is often not the case, especially when it comes to property, finances and inheritance. A cohabitation agreement can help protect both parties by clarifying financial and property matters.

In this blog, we’ve compiled answers to some of the most frequently asked questions about cohabitation agreements, so you can understand why they are important and how they can work for you.

What Is A Cohabitation Agreement?

A cohabitation agreement is a legal contract between two people who live together but aren’t married. The agreement sets out the terms of how finances, property and other key aspects of the relationship will be handled both during and after the cohabitation. This can include agreements on:

How assets like property, savings, investments and crypto currency will be divided if the couple separates.
What financial responsibilities each partner has during the relationship.
In the case of death, who will inherit what.
How to handle debts and liabilities.

Having a cohabitation agreement in place can help both partners avoid potential conflicts and financial disputes in the event of a separation.

Why Should I Have A Cohabitation Agreement?

A cohabitation agreement can be crucial for several reasons:

Clarifies Financial Arrangements: Many unmarried couples assume they have the same legal rights to property and finances as married couples. However, this is not true in the eyes of the law. A cohabitation agreement can specify how assets and debts should be shared or divided, providing clear expectations for both parties.
Protects Individual Assets: If one partner has significant personal assets or property before the relationship, a cohabitation agreement can protect those assets, ensuring that they remain the sole property of the individual if the relationship ends.
Child Arrangements: In the event of a separation, having clear agreements in place regarding child care, living arrangements and financial support is crucial. A cohabitation agreement can make these arrangements clear from the outset.
Minimises Legal Costs: By agreeing on terms upfront, couples can reduce the likelihood of disputes arising later, which could lead to lengthy and expensive legal proceedings.

Who Needs A Cohabitation Agreement?

Cohabitation agreements are ideal for any couple who:

Is living together but is not married or in a civil partnership.
Wants to protect their individual assets and financial interests.
Wants to ensure their financial responsibilities are clearly outlined.
Has children and wants to ensure proper care and support arrangements.
Wishes to avoid potential disputes in the event of separation.

Even if you have been living together for a long time, it’s never too late to create a cohabitation agreement. This is particularly important if your financial situation or assets have changed over time.

What Should Be Included In A Cohabitation Agreement?

A comprehensive cohabitation agreement can cover several key areas, including:

Property And Assets: Who owns what and how will it be divided if the couple separates?
Contributions To Household Expenses: How will household bills and expenses be divided? Will it be 50/50 or will one person contribute more?
Debts: How will debts be managed during the relationship? Who will be responsible for paying off any existing or future debt?
Inheritance Rights: What happens if one partner dies? A cohabitation agreement can outline inheritance arrangements, especially if the couple does not have a will in place. This can be of particular importance if there were previous partner(s) and / or children before the relationship commenced.
Child Custody And Support: How will arrangements be made for children, including visitation, custody and financial support?

Is A Cohabitation Agreement Legally Binding?

Yes, a cohabitation agreement can be legally binding, provided that it is drafted correctly. To ensure the agreement holds up in court, both parties must have made full financial disclosure, entered into the agreement voluntarily and sought independent legal advice.

To make sure the agreement is enforceable:

Both parties must disclose their financial situation in full.
The agreement must be fair and reasonable.
Both parties must sign the agreement voluntarily, without any undue pressure or influence.
Independent legal advice is recommended for both partners.

If these conditions are met, a cohabitation agreement can be upheld in a court of law, providing protection for both partners in the event of a dispute or separation.

What Happens If We Don’t Have A Cohabitation Agreement?

If you and your partner don't have a cohabitation agreement and your relationship ends, the division of assets, property and financial responsibilities may be left up to the courts. For example, the court may determine how property and finances should be divided based on the contributions made by each partner, or they could apply general laws regarding property rights in cohabiting relationships.

Without a cohabitation agreement, one or both partners may be left feeling unfairly treated, leading to legal disputes. By agreeing on terms before any issues arise, you can avoid unnecessary conflict and ensure that both parties are treated fairly.

How Do I Create A Cohabitation Agreement?

Creating a cohabitation agreement involves:

Full Financial Disclosure: Both partners should be open and honest about their financial situation, including income, assets and debts.
Discussing Terms: Both parties should agree on the key terms, such as the division of property, responsibilities for bills and any plans for children.
Legal Advice: It’s crucial that both parties receive independent legal advice before signing the agreement. This helps ensure that both partners understand their rights and that the agreement is enforceable.
Documenting The Agreement: The agreement should be documented in writing, signed by both parties and witnessed if necessary.

Can A Cohabitation Agreement Be Changed Later?

Yes, a cohabitation agreement can be amended if circumstances change. For example, if one partner inherits property or there is a significant change in your financial situation, you can review and update the agreement. However, any changes must be agreed upon by both parties and documented in writing.

If there is a significant change in your relationship, such as the birth of a child, it’s a good idea to review your agreement to ensure it still reflects your current situation.