Do I need a cohabitation agreement?

With common law marriage nothing more than a myth, it is important that cohabiting couples take steps to protect their assets and prepare for the future. The Family Law team at Lodders explains more.

Cohabitation is the act of two individuals, who are not married or in a civil partnership, living together in the same household. Cohabitation is an increasingly popular choice, with figures from the 2021 UK census showing there were around 3.6 million couples cohabiting in the UK.

Whilst cohabiting is the preferred choice for many couples, in the event of a death or separation, they will not automatically receive the same levels of protections as those in a marriage or civil partnership.

What is a cohabitation agreement?

A cohabitation agreement is a sensible option for an unmarried couple who are residing or about to reside in the same household as it provides a clear and legally defined document to record their responsibilities and entitlement in the event of a separation.

Cohabiting couples do not automatically have the same rights as married couples irrespective of the length of their relationship and even if they have children.

A cohabitation agreement can ensure financial rights and responsibilities are agreed and defined in advance and financial entitlements are pre-determined. The intention is to avoid disputes at a later stage, which may be expensive and take time to resolve.

Areas often covered within cohabitation agreements are:

• The shared home – it is important to record how this is owned and to define the entitlements (if any) to an interest within it, who will pay the mortgage, and to address any endowment policies / saving arrangements linked with the mortgage and life assurance.
• Access to assets, for example, a right to reside in a property held in the sole name of the other cohabitee.
• Money, joint bank accounts and paying bills.
• How assets will be divided in the event of separation.
• Children – for example, to provide above the minimum expected by the child support system for private school or university fees and specifying expectations in relation to how children would be cared for.
• Pensions – nominations of the death in service benefits of pension provision.

It is important for couples to regularly review the agreement in the event of any significant changes in circumstances and to ensure it is up to date.

The legislation in relation to cohabitation is undefined. It is not as straightforward as the law relating to marriages and civil partnerships. Therefore, prior to settling down and buying assets or property together before cohabiting, both parties will benefit from legal advice on questions such as:

• What rights will I have in relation to our home?
• If we separate, how will our assets be divided?
• How are the mortgage and bills to be paid?
• Am I liable for joint debt?
• Am I entitled to a share of the assets acquired during our relationship? 

Common law marriage myth

The idea of a common law marriage dates to medieval times. The concept refers to a couple who have been living together for a certain period of time and wrongly suggests they will gain the same legal rights as a married couple due to the length of their cohabitation. This is a myth; common law marriages do not exist in modern law and some cohabiting couples may have no legal obligations towards the other should they separate.

Without the safety net of a cohabitation agreement, cohabiting couples may not automatically have any right to share property or other assets, nor reassurance in the event of scenarios such as illness or injury, as well as many other rights which apply only to married individuals or those in civil partnerships. Setting up a cohabitation agreement can ensure peace of mind and clarity over shared assets in the event of a separation.

Consideration should also be given to making a will to ensure if you die whilst cohabiting, your wishes can be put into effect. Although it is possible in some circumstances for a cohabitant to inherit, there are no strict rules about what should happen, so it is important to define your testamentary wishes.

Whilst it is possible the law may change in the future to give cohabitants specific rights, there is currently no defined route to settlement in the event of separation of cohabitants.

Help with your cohabitation agreement

At Lodders, our expert family law solicitors understand how important it is to protect your assets and to have a clear plan for the future. We can assist with the preparation of cohabitation agreements and pre-nuptial agreements, and we can also help in the event of a disagreement occurring about entitlements to assets.

If you have any further questions or are looking to set up a cohabitation agreement, please get in touch with our Family Law experts.