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. 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.