Cohabitation agreements are a huge benefit for unmarried couples in need of structure and security for many aspects of their relationship. These aspects can include short and long-term finances — as well as more complicated matters such as fairly dividing assets in the event of a break-up.
In 2018, the number of men and women who got married was the lowest on record, demonstrating many couples are content with a committed relationship without feeling obligated to tie the knot. In these situations, the relationship often shares all the trademarks of a marriage, such as sharing a family home, raising children — as well as sharing funds and other assets. The issue some couples have is marriage laws and cohabitation laws differ somewhat — which is why cohabitation agreements are so vital to ensure you gain certain legal and financial rights.
What is a Cohabitation Agreement?
Cohabitation agreements establish who owns what and in what proportion and allows you to document how you will split property, personal belongings, savings and any other assets if the relationship does break down. It also often states how your children will be supported financially and what their living arrangements will be — as well as how you will deal with bank accounts, debts, mortgages, and shared purchases such as the family car.
It’s worth noting cohabitation agreements aren’t just for break-ups. They provide an ideal way of setting out how you and your spouse will manage day-to-day finances while living together, such as how much each person contributes to the mortgage or rent and bills — and also if you will take life insurance policies out on each other.
Why Cohabitation Agreements Can Benefit Unmarried Couples
If you and your partner are considering living together — by purchasing a new home or moving into a property one of you already owns — it would be prudent to look into getting a cohabitation agreement before you do so. The agreement will set out exactly what both of you will contribute financially and your agreed intentions regarding the division of assets in the event of a potential future separation.
Often, cohabitation agreements encourage couples to consider and objectively discuss their intentions before they start living together. The agreement will provide them with a clearer idea of where they are likely to stand in the event their relationship breaks down later on. Cohabitation agreements are usually upheld by the court — although the circumstances of each case can have an impact on its decision.
It’s always important to consider the possibility that one day, your relationship could break down. With this in mind, cohabitation agreements can save you a lot of money — if you do happen to break up — as the division of assets will be carried out according to the agreement. Far preferable to a complicated, hostile break up consisting of lengthy court battles and an abundance of legal fees.
Are you and your partner looking to make a cohabitation agreement and require the advice of an expert? At KMJ Solicitors, we specialise in all areas of family law, including cohabitation agreements. Get in touch today to schedule a FREE no obligation consultation.