How to propose … a cohabitation agreement

Moving in with a loved one is an exciting time and the last thing on your mind is likely to be the seemingly unromantic notion of making a plan for what should happen to your finances, property and children while you live together or if you split up or die.

‘However, if you plan to stay together for the long term then it is worth discussing the potential benefits of a cohabitation agreement,’ says Connor Williams, in the family law team with Borneo Martell Turner Coulston ‘Cohabitees do not enjoy the same automatic legal rights as a married couple when a relationship breaks down, which can lead to financial uncertainty and the potential for a costly dispute.’

It is sensible for an unmarried couple to have a cohabitation agreement – which is a legally binding document if properly executed as a deed – in place when they move in together setting out each party’s rights and responsibilities while they live together and if their circumstances change.

What a cohabitation agreement can cover
Every cohabitation agreement will be different, depending on the needs and circumstances of the couple involved, but will typically outline the rights and duties of each cohabitee regarding their property and finances while they live together, as well as detailing what will happen if they split up.

Arrangements commonly covered in a cohabitation agreement include:
next of kin rights in a medical emergency;
rights to each other’s pension;
each party’s legal and beneficial interest in the property they share; and
who does what and who pays for what.

In the event that you should separate, the agreement can outline:
how assets and debts will be allocated between the couple;
what will happen to any children of the relationship; and
who gets the pets.

Who else can benefit from a cohabitation agreement?
As well as giving you and your partner certainty of your roles and responsibilities as a cohabiting couple and beyond, if you split up or one of you dies, a cohabitation agreement can be used to give peace of mind to other people.

For example, the bank of mum and dad may have paid, or be planning to pay, the deposit on the home that you and your cohabitee share but want to protect this sum. Similarly, if you move into a property owned or financed by the family, such as on a farm, they may wish to ensure that the property remains in the family if you and your partner break up.

Cohabitation agreements are also not just for romantic couples – they can also be a useful tool for providing assurance for anyone who decides to share a property with someone as a housemate, such as a friend or relative.

Broaching the subject
You may be hesitant to propose a cohabitation agreement, fearing that your partner will see it as a sign that you have doubts about the future of your relationship.

However, they may also see the eminent sense in this course of action if you emphasise that the agreement demonstrates that you are thinking in the long-term and it will benefit each of you. Without one, your partner would not have an automatic right to your property or estate (even if you have children together), access to your pension or bank account and will not be considered next of kin if you have an accident.

Practical steps
You can visit a solicitor together to decide on the initial draft of the agreement. If you are initiating and paying for the drafting of the agreement, your partner will need to consult a separate solicitor before the agreement is signed, to ensure its terms reflect and protect the interests and wishes of you both. If such independent legal advice is not taken, the agreement may be deemed invalid and therefore not legally binding.