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Why do unmarried couples need a Cohabitation Agreement?

Unlike married couples, unmarried couples have very few legal rights if they separate or die.  A Cohabitation Agreement allows unmarried couples to set out arrangements for their property, finances and children whilst they live together but also if they split up or die.

As of March 2022, the Office of National Statistics reported that over the preceding 10 years the number of unmarried couples living together had risen to 3.6 million – an increase of 22.9%.

Many of these will have started living together without even knowing they need a Cohabitation Agreement.  Even though it is not a legal requirement, it is a very prudent choice.

What is a Cohabitation Agreement?

A Cohabitation Agreement is a legal agreement between an unmarried couple who are either living together or planning to live together.

The document sets out how you will manage your finances and property and confirms what will happen to your family and your assets should you separate or should one of you die while you are living together.  In addition you should put in place a Will.

Although this list is in no way exhaustive, Cohabitation Agreements generally cover:

  • The ownership of the property
  • The agreed ownership/split of the deposit on your home
  • What share of the mortgage/rent each of you will pay
  • Who will pay for repairs/improvements to the property? How will this impact on overall shares in the property (if it all)
  • In the event one party wants to sell the property will there be an opportunity for the other to buy out the share of the other? When will a sale be triggered?  If there are children will this affect any proposed sale?
  • How household bills will be split and paid
  • The ownership of the contents of bank accounts and/or other savings and financial assets
  • Life insurance including who will pay the premiums and what are the beneficial interests?
  • Pensions
  • Any valuable assets (e.g. cars, furniture, jewlery, heirlooms and other properties)
  • How any debts will be apportioned
  • Will there be any financial support post separation?

It is always best practice to make a Cohabitation Agreement before you start living together but we understand this is not always an option.  You can make one at any point.  Most couples would make that decision when their circumstances change, for example if they have a child or enter into a joint mortgage.

Why do you need one?

Unlike married couples or couples in a Civil Partnership,  cohabiting couples don’t automatically have legal rights.  This position does not change if you’ve lived together for a number of years or if you have children from your relationship.

The current legislation covering unmarried couples in England and Wales is extremely limited in scope.  This means it is likely to be expensive to navigate making it prohibitive for many.  In addition you will be relying on Property Law rather than Family Law Statutes and as such ‘fairness’ does not affect the outcome.

Where children are involved Schedule 1 of Children Act 1989, allows parents to make a claim for financial provision on behalf of children.  However, these terms will never be as generous as those that would be reached following a divorce or the dissolution of a civil partnership and the law is very clear that the financial provision is for the children and not for the former partner of a relationship.

In the absence of a Cohabitation Agreement neither party have financial obligations to each other.  As an unmarried couple there is no requirement to provide ongoing maintenance payments or provide them with a share of any properties, pensions or savings despite the length of the relationship or despite contributions made during the relationship.

In fact, the court is unable to consider the financial and housing needs of the parties at all.  Neither can the court consider any non-financial contributions either party has invested in the relationship, such as looking after the children or home.

Again, this could leave you or your partner in an extremely vulnerable position should your relationship break down.

If you are either planning to live with your partner or are already living with your partner and see benefit in putting a Cohabitation Agreement and Will in place, please contact kate.moran@collinshoy.com