May 17, 2013

Considering cohabitation? Ten key questions to ask yourself

As statistics highlight that cohabitation has soared to a record 6 million people in the UK, many couples planning to live together are unaware that they have few legal rights if the relationship turns sour.

Contrary to perception that ‘common law marriage’ is a legal entity, the harsh reality is that if the couple splits, one party could be left penniless and homeless.

In many areas of life from buying a car to safeguard our health, property and even our pets we take out insurance to cover worst case scenarios. So why when it comes to cohabitation – now the fastest growing family type in the UK – do we leave ourselves vulnerable and exposed?

While increasing numbers of couples are signing pre-nuptial arrangements before they marry, people planning to cohabit are often unaware that they could protect themselves with a similar agreement.

It may not be romantic to agree the ‘what if’ scenarios should one partner leave, win the lottery – or die. However, putting in place safeguards in the form of a cohabitation agreement before the furniture is unpacked or even after it can potentially save emotional and financial trauma at a later stage.

If you are among the six million cohabitees in the UK we recommend that you sit down with your partner and consider the following ten key questions:

  • How long do you want the agreement to last
  • Who has contributed what?
  • Who owns what?
  • How will monthly outgoings be met?
  • What happens if you separate?
  • How do you ensure that your children, including any from a previous relationship, are protected financially and otherwise in the event of your death?
  • Should a property be bought in joint names and if so in what shares will the ownership be?
  • What happens to that property if one of you dies?
  • Can the survivor stay in that property forever, or at all?
  • When do your children receive your part of the property as their inheritance?

Your answers will be instrumental in formulating a cohabitation agreement with legal and financial advisors. It is important that each party seeks independent legal advice and discloses all financial information in the lead up to signing the agreement, which should be reviewed regularly – particularly as personal circumstances change.

While a cohabitation agreement may not be 100 per cent enforceable, embarking on this arrangement – often achieved through “round-table” meetings within the collaborative process – can reduce the likelihood of cohabitees being left destitute should the relationship flounder.

Jones Myers LLP can help if you or someone you know is about to cohabit. We have considerable experience in drafting cohabitation agreements and, sadly, in dealing with disputes arising from separations where there has been no such agreement.