Cohabitation Agreements – Say ‘I do’ to Protecting your Financial Position

Year Published: 2019

There is a common belief in ‘common law marriage’. Some believe that seven or maybe ten years of cohabitation turns their relationship into a ‘marriage’ but the reality is, no matter the length of a relationship, marriage is only marriage with the certificate to prove it. Therefore, the rights for cohabiting couples as opposed to married couples differ greatly and it is important to consider a cohabitation agreement in any cohabiting relationship in order to avoid unfair distribution of assets in the event of a relationship breakdown.

There have been many legal arguments and debates concerning the rights of unmarried partners, however the issues still remain the same. It is generally the case that the economically weaker party stands to be disadvantaged following the breakdown of a relationship between cohabiting couples. While a married individual may be protected by the likes of White v White and McFarlane v McFarlane, in which the court recognises their financial rights and respective contributions, unmarried persons cannot rely on any such rules of equality as provided for by the legal case law on divorce.

Signing a cohabitation agreement documentTake a person who agreed to give up their career to become the primary child carer, while their partner continues to work and provide financially. Here we have what would traditionally be described as the homemaker and the breadwinner. For married couples, the contribution of both parties, while different in nature, is considered to be equal. Accordingly, the needs of the primary child carer, as well as the consideration that their earning potential and capacity is likely to be lower, will result in the matrimonial financial pot being split in their favour. This strives to achieve overall fairness and ensure the child’s needs are met first and foremost.

For cohabiting couples on the other hand, the reality is very different. In the same situation, an unmarried person stands to gain just fifty percent of a jointly owned property, despite all the factors that suggest this would result in an unfair division of assets. Worse still, if the property is owned in the sole name of their partner they may have no claim at all against the home and could end up leaving the relationship with nothing tangible other than the feeling of complete and utter unfairness.

Why You Should Consider a Cohabitation Agreement

The stark picture painted above is not one that couples who have chosen not to marry want to find themselves in, nor does it have to be. To avoid such problems arising, entering into a cohabitation agreement may afford the necessary protection.

A cohabitation agreement will essentially confirm in writing how significant assets, such as the family home, are to be split. So long as the agreement is drafted as a Deed and signed by both parties voluntarily, it will be legally binding, affording both parties the stability of knowing their position in the unfortunate event that the relationship comes to an end.

In the current climate, where more people are choosing cohabitation over marriage yet cohabitee rights remain limited, entering into a cohabitation agreement is the most advantageous way to ensure your financial position is secured. If this is something you are looking to do, it is important that both parties gain independent legal advice to ensure the agreement you reach is both fair and reasonable.

For more information about cohabitation agreements, please contact our Family Law Partner, Shelley Chesworth, on 0161 475 7622 or email [email protected].

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