NEWS

Cohabitation Agreements

Cohabitation Agreements deal with the division of an unmarried couple’s finances in the event that they separate. Currently couples who are neither married nor in civil partnerships have no legal protection when they separate and in many cases costly legal disputes can arise. Merricks can advise you on what is involved in creating a Cohabitation Agreement, what should be taken into consideration and whether they are suitable to your circumstances.



Do I need a Cohabitation Agreement?

When married couples divorce the Matrimonial Causes Act ensures that where possible the needs of both individuals are looked after regardless of who owns the matrimonial assets. With unmarried couples there is no protection and there is no legal obligation on the individual with the greater share of the assets to maintain or share their assets with the weaker individual. This is the case even when there are children involved and the relationship had been of long duration. This can be particularly contentious when one individual owns the family home in their sole name and both individuals have contributed to the mortgage and the household bills during the course of the relationship. Disputes over implied and imputed ownership are not uncommon, they are often costly and acrimonious and can be avoided. Cohabitation Agreements set out a couples main assets and establish who owns what and in what proportion. It also records how the assets will be divided should the relationship break down.Cohabitation Agreements can also be used to set out how a couple will manage their day to day finances while they live together, such as how much each individual will contribute to rent or mortgage and bills.



What is the procedure?

Once a couple have agreed what assets they own, how they are owned, and how they should be divided in the event of a separation, one individual will instruction a solicitor to prepare the Cohabitation Agreement incorporating the information. The draft Agreement is then sent to the other individual who will ideally obtain independent legal advice on it and the effect of entering into it.



Will it be upheld by a court?

Provided that the Cohabitation Agreement is properly signed and witnessed, that there was no undue influence and that there was full disclosure of each parties assets prior to entering into the Agreement then the Courts will enforce the Agreement. Entering into a Cohabitation Agreement when you first move in together might be unromantic but it can save emotional and financial heartache in the future.



What if I die?

If unmarried couples wish their partner to benefit from their estate on their death then they must make a will. Under the Intestacy Rules unmarried partners have no rights to their deceased partner’s property. If you wish to instruct us to draft a Cohabitation Agreement for you or if you wish to discuss any aspect of this article then please call us on 01208 812068.