Cohabitation agreement

A cohabitation agreement is a form of legal agreement reached between a couple who have chosen to live together (whether they are heterosexual or homosexual). In some ways, such a couple may be treated like a married couple, such as when applying for a mortgage or working out child support. However, in some other areas, such as property rights, pensions and inheritance, they are treated differently.

A cohabitation agreement contains documentation for a couple who want to live together in order to protect themselves from unnecessary cost and litigation should their cohabitation break down. They can clearly regulate their property rights and what arrangements might be made for mutual financial support, dealing with debt, caring for children, etc.

The agreement also, much like a prenuptial agreement, allows the individuals concerned to determine in advance who will keep specific assets and what will happen to assets that have been purchased jointly if they separate. This agreement is intended to bind both parties.

Advantages

A cohabitation contract helps clarify financial commitments. Working out who pays what and how responsibilities are shared in running the home need sorting out for a harmonious home life. It is a good idea in that if the couple does break up, an altercation about who receives what may be less likely.^{[citation needed]} However, the courts may occasionally change or ignore provisions set out in a cohabitation agreement if they feel that they are inadequate under the circumstances.^[1]

Disadvantages and limitations

There's no guarantee that a court will support the terms of a cohabitation contract in the United Kingdom. Thinking about and talking through all the issues that should be covered – including death, divorce, and illness, often involve long, hard work. But talking about the terms of a contract could be looked on as a massive plus to a relationship, showing that it is mature enough to work through major decisions.

A cohabitation agreement will usually not be adequate to settle all legal issues that might arise, so a trust deed setting out property rights and a will are also recommended.

Common law marriage

In England and Wales, a couple can live together for 25 years without acquiring any legal rights to a share of the home or maintenance. However, the English courts have held that if one partner contributes to the mortgage or rental payment of the home, or have contributed in some other financial way such as contributing to the cost of repairs or improvements, then that partner gains a right to a share of the home.

Same sex couples

Some gay activists have been campaigning for legal recognition of their partnerships. Their campaigning for the right to take over a partner's tenancy of the family home on bereavement have been gained, regardless of any cohabitation agreement existing, but if a couple share a home their chances of buying the rights are much more limited.

In December 2005, the British government offered gay couples equal rights with married couples if they register a civil partnership legally. The government-backed scheme – which enables same-sex couples to qualify for next-of-kin entitlements on inheritance tax, pensions and property – is likely to attract many more couples.

There will still be large legal differences between civil partnership and marriage. For example, a couple can get married and have all the legal rights and benefits after knowing each other for only a few days, but a same-sex couple will almost certainly be required to show a lengthy commitment to each other before they are allowed to register their partnership. Currently, for immigration purposes, a same-sex couple must show they have a relationship of two years' standing, and it is likely that a similar term will be imposed for registering a partnership. Consequently, same-sex couples will need to make wills and a cohabitation agreement, to provide security in the event of break-up.

Legal changes ahead?

In 2002 the Law Commission recommended that cohabiting partners who lived together for two years should get the right to a share of their home if they separate, regardless of who paid for the property or its maintenance.

Prenuptial agreements

As afore mentioned, the term is also sometimes used loosely to refer to prenuptial agreements. These are often designed when one intends to protect his or her wealth in the event of the marriage ending in divorce. The contract aims to achieve a measure of certainty about what the financial "damage" would be if the marriage came to an end. However K v K (2003) has heightened the importance of prenuptial agreements by deciding that the wife had to stick by the terms of a prenuptial agreement she signed. The courts still keep their discretion about whether or not a prenuptial agreement will be upheld but this new case shows that the courts are in favour of couples making private agreements between themselves.

References

1. ^ Will my cohabitation agreement be accepted by the courts?