More and more of us are choosing to live with their partner rather than marrying. Consideration should be given to what will happen to property owned by each of the partners should the relationship breakdown.
We aim to remove the worry and answer questions which can arise. If my partner moves in, do they then have a claim on my property? How can I protect my asset?
What is a cohabitation agreement?
A cohabitation agreement provides a framework for you to record your intentions you have as to the financial terms of your relationship, and record your respective contributions. The assets can be owned jointly or individually, and what should happen if the relationship breaks down. It sets out in a clear and transparent way your agreement which can potentially prevent issues from arising in the future.
When should a cohabitation agreement be contemplated?
Preferably when you move in together, but can be equally valid if you have been living together for many years.
Why should I make a cohabitation agreement?
Cohabitees are vulnerable on the breakdown of a relationship or on the death of a partner. A cohabitation agreement provides a framework for you to record your intentions and record your respective contributions.
There is no status as a “common Law”” spouse or partner, and there is no automatic financial support or share of your partner’s property on separation. A cohabitation agreement provides clarity as to what will happen if a partner moves into your property, and to provide reassurance to you that your partner will have no claim or share than agreed on your property or assets.
What is required?
All we require of you is your instructions as to what you wish to be covered in the agreement, if there is a new home – how is this to be owned? Who pays the mortgage, in what share? What contributions have been made to the property’s purchase, extension. repair? Who pays which bills? Should there be a joint account? As to pensions, would you wish to agree to nominations for death-in-service benefits? There may be assets to be identified as being your sole property. Identification of key points at this stage is so important for there to be no ambiguity.
The cohabitation agreement can provide expectations (e.g. child support payments on separation, university fees) but it is not legally binding as to the children.
On separation a parent cannot be prevented from making a financial claim under the Children Act 1989. Under schedule I of the Children Act, provision has been provided allowing one party to make a financial claim against the other for the benefit of the children.
An unmarried mother will automatically have parental responsibility for her child but in order for an unmarried father to obtain parental responsibility, he must either marry the mother, be named on the birth certificate, or enter into a parental responsibility agreement with the mother. It is also possible to apply to the court for parental responsibility if the mother does not consent
What happens if the cohabitants marry?
The cohabitation agreement ceases on marriage. A prenuptial or postnuptial agreement should be considered.
Is a Cohabitation Agreement binding?
Yes, provided that it has been drafted and executed properly, and signed as a deed.
Who is the Cohabitation Agreement between?
You need not necessarily be romantically involved to be a party to such an agreement, but it can reflect an agreement between friends or family members.
Ownership of property
A Deed of Trust should also be considered to set out the ownership and respective beneficial interests you both have in your home.
There are two ways of owning a property in England and wales. The Legal Title, this is the person who is named on the Title Deeds, and there is Beneficial Ownership, being who is entitled to the equity in the property.
The percentage share between the legal and beneficial ownership of a property does not need to be the same. A beneficial interest can exist even if you hold no legal title.
If your name and the name of your partner (or simply another person) is on the title deeds of a property in England and Wales, then you will hold it as Joint Tenants or as Tenants in Common.
A Deed of Trust will set out how you wish to share the beneficial interest. If you hold the property by way of joint tenants, without such an express declaration, the starting point is to assume that you will be entitled to the equity equally. It is possible to argue a claim under the Trusts of Land and appointment of Trustees Act 1996. This is a civil rather than a family court remedy, and enables the court to determine who and in what shares, a beneficial interest in a property can be divided. These types of claims can be complex and expensive. A Deed of Trust can prevent such claims being justifiable.
By holding a property by way of Tenants in Common, the percentage share of your beneficial interest in the property can be identified.
As a cohabitee you have little protection under the intestacy rules. There is no status as “common law” souse or partner. A cohabitation agreement can outline what you would wish to happen on your death but for security of mind, a will is required to enforce your wishes. If you do not have a will then your property will pass in accordance with the Rules of Intestacy. These can be harsh. Unlike married couples, people living together do not automatically inherit from the other. The only way to provide assurance on one another’s death is to make a will.
We offer advice and offer fixed fees for cohabitation agreements.