A Living Together Agreement (also known as a cohabitation agreement) is essential for couples who are not married, and do not wish to marry, but share financial resources. This applies to same sex and opposite sex couples. There is no such thing as a common law husband and wife. There is no law protecting separating cohabitee partners, so signing a living together agreement will lessen worry and help to avoid court proceedings.
A couple can enter into a living together agreement at any time in their relationship, and it helps to manage their money matters, giving peace of mind. It should be considered a strength in a relationship, because it will clarify who pays the bills and how they are paid, and takes into account the sharing of future assets and liabilities.
Whilst there is a temptation to prepare an online template, it may not cover everything that is required. In the event of a dispute, an agreement is likely to be upheld if both parties have had independent legal advice.
A cohabitation agreement allows couples to consider their change of circumstances and may be appropriate if:
- Children are born
- There is a change in their own financial circumstances
- There is a change in their health
- One of them becomes unemployed or redundant
As there is no recognition of cohabitees in law, a couple may instead choose to enter a civil partnership.
Couples who own a home together should also consider a Declaration of Trust. A declaration of trust sets out what share each has in a property, having regard to their initial contributions and ongoing payments. Couples should also consider making a Will, if a property is owned by them jointly.
If you are moving in with your partner, or are already living together, contact us to get more advice.