Manders Law Senior Paralegal Izzie Denison went to see the movie and so this blog was born ……….
First things first – what is a Cohabitation Agreement?
A Cohabitation Agreement, also known as a “living together agreement”, is a legal document that outlines the rights and responsibilities of unmarried couples who live together and who wish to have clarity on the financial arrangements between them during the period of cohabitation, with a view to avoiding a costly dispute at some later stage if the cohabitation ceases. The agreement can specify how expenses, bills, and financial responsibilities are divided between the partners. It can also outline how property, assets, and debts acquired during the relationship will be distributed if the relationship ends.
Are Cohabitation Agreements legally binding?
Cohabitation Agreements are not automatically legally binding in the UK. However, they can carry significant weight in legal proceedings if they have been entered into freely by both parties with full understanding and without duress. To increase the likelihood of the agreement being upheld, it’s advisable for each party to seek independent legal advice before signing and to ensure that the agreement is properly and comprehensively drafted.
Why are Cohabitation Agreements a good idea?
Contrary to popular belief there is no such thing as “common-law marriage” in this jurisdiction. This means that a couple is not legally married in England and Wales unless the relevant statutory criteria is met. Unjust though it is, it follows that those who cohabit rather than marry do not have the benefit of the protections afforded by law to married people if the relationship breaks down. There will be no:
- entitlement to financial support or relief, unless there is a child or children involved (and there are limits here too).
- prescribed method of dealing with property issues, and debts/liabilities.
A formal Cohabitation Agreement, if properly prepared, is designed to minimise, and where possible eliminate, the messy disputes involved in the division of property, assets and income that arise when an unmarried couple split up.
If a couple own property together, the agreement can define the ownership shares and outline what should happen to the property if the relationship ends. This is particularly important as property ownership laws for cohabiting couples are different from those for married couples.
Children and parenting
Cohabitation Agreements primarily focus on the legal and financial aspects of living together as an unmarried couple such as property ownership, division of assets and financial support if the relationship ends. Child arrangements by contrast regard making decisions on the care of children upon separation and will, for example, deal with where and with whom the children should live and set out the arrangements for contact and financial support for the children.
Child arrangements are governed by separate laws and regulations (primarily the Children Act 1989) and issues are determined on the best interests of the children, their welfare being the court’s primary concern. Couples who have children and are living together, or are considering doing so, should consider creating a separate agreement specifically in relation to arrangements for the children.
Inheritance and Wills
The Agreement can specify whether either partner will inherit from the other’s estate if one of them passes away. It can also address the distribution of assets and possessions in the absence of a Will.
Other rights and obligations
Cohabitation Agreements can cover a range of other issues, such as joint bank accounts, joint purchases, and even details about how the couple’s everyday lives are managed.
Now, what about Barbie and Ken?
So now we know what a Cohabitation Agreement is, what do we know about Barbie and Ken?
- Barbie and Ken have been together since 1961.
- Barbie has her Dreamhouse in her sole name, which she bought before she met Ken. The couple have been living together in the Dreamhouse since they first got together.
- Barbie has a mortgage on the Dreamhouse in her sole name, but Ken agrees to contribute to the monthly mortgage repayments and all other outgoings on the property while he is living at the Dreamhouse, including bills, repairs and maintenance, and housekeeping and cleaning. They have set up a joint account together to pay for these outgoings.
- Barbie receives a generous monthly salary from Mattel.
- Ken also receives a monthly income as a part-time lifeguard on their local beach, but in order to subsidise his income he also decides to rent out his Mojo Dojo Case House while he is living at the Dreamhouse. The title to the Mojo Dojo Casa House is in Ken’s sole name.
- Despite Ken’s sources of income, the couple accept that Barbie earns significantly more than Ken. They therefore agree that in terms of all outgoings on the Dreamhouse Barbie will contribute 60% and Ken will contribute 40%. Barbie also agrees to pay Ken a monthly allowance.
- Barbie and Ken each have a sole current account, where they hold their respective incomes and from which they pay their shares of the outgoings on the Dreamhouse into their joint account.
- Barbie has a luxurious pink car, which she also bought before she met Ken and which only she drives. Barbie pays for all the relevant maintenance and running costs.
- Ken is an avid fan of horses and as such owns a valuable collection of paintings by George Stubbs. He also has an expensive custom-made surfboard for work.
- They have a dog, Tanner, which they bought together once Ken moved into the Dreamhouse.
- The couple are not married and have no children.
What could a Cohabitation Agreement between Barbie and Ken look like?
The Dreamhouse is home to Barbie and Ken. It’s in Barbie’s sole name, but the couple have been living in the property together for just over 60 years, and Ken has contributed, and continues to contribute, to all outgoings on the property (albeit not as much as Barbie does – just saying). Without a formal agreement to recognise Ken’s contributions they will remain unrecognised, and he will face the unpleasant prospect of a challenging legal dispute to have his contributions taken into account.
At the very least the Cohabitation Agreement should address:
- how the property was purchased – by Barbie
- how the legal title to the property is held – in Barbie’s sole name
- whether it is intended that Ken should acquire any share/legal interest in the property by way of his contributions, and if so in what shares
- who is to pay for all outgoings on the property, or if payment is to be shared how much each party is to contribute
- what is to happen in respect of repairs, maintenance and home improvements
- what is to happen to the property in the event of Barbie’s death – she should make a Will!
- what is to happen to the property if one of the parties or both of them relocate during the period of cohabitation
- what is to happen to the property in the event that the parties separate – is Ken to vacate the property and return the keys to Barbie upon receiving appropriate notice?
- the Mojo Dojo Case House – Ken is after all only able to rent it out because he is living in the Dreamhouse!
- whether it is intended that Barbie will provide any financial support to Ken in the event they break up – she does after all have a generous salary from Mattel
- what is to happen to their bank accounts and personal possessions – Barbie does have a nice car after all, and Ken’s surfboard and paintings may be very valuable
- last but never least – what is to happen with Tanner the dog!
This is usually dealt with by way of Schedules which are annexed to the Cohabitation Agreement. These Schedules can contain a wide variety of provisions that address various aspects of the couple’s cohabitation and potential separation. While these Schedules can be tailored to the specific needs and preferences of the couple, here are some common elements that may be included:
- how joint bank accounts are managed, and how assets and debts will be divided if the relationship ends.
- if the couple owns property together, the schedule might outline the ownership percentages and what happens to the property in case of separation.
- if one partner will be financially supporting the other during or after the cohabitation, this can be specified in the Schedule.
- which personal possessions belong to each individual and how these will be divided if the relationship ends.
- who is responsible for any debts incurred during the cohabitation and how these debts will be handled upon separation.
- as explained above, while child arrangements are typically better addressed in a separate agreement specific to children, the Schedule might touch on how childcare responsibilities and costs are shared.
- the steps and procedures to follow in case the relationship ends, including notice periods, moving out arrangements, and any agreed-upon dispute resolution methods.
- details about how disputes or disagreements will be resolved, including whether Mediation or Arbitration will be used before resorting to legal action.
- other specific clauses that the couple wishes to include, such as confidentiality, or any unique arrangements they have agreed upon.
It’s important to note that while Cohabitation Agreements can cover many aspects of the couple’s relationship, they may not be legally enforceable in the same way as marriage or civil partnership agreements. The courts will consider the circumstances and intentions of the parties when assessing the validity and enforceability of a Cohabitation Agreement.
To ensure that a Cohabitation Agreement and its Schedules are legally sound and properly reflect the couple’s intentions, it’s advisable to seek legal advice from a qualified family lawyer.
For an initial FREE consultation on any aspect of family law, call Manders Law on 01245 895 105 or email us here.
Note: this blog is intended to give an overview (rather than comprehensive guidance and advice) on your legal or financial position and is provided for information only. It is not an endorsement of any product or service provider.