Are you living together with your partner or intend to do so soon, but you are not yet thinking of marriage or entering into a civil partnership?

Then keep on reading, as this may save you some money and trouble.

What Is a Cohabitation Agreement?

First, let me explain what a cohabitation agreement is. It is a legal document between partners that lets you document an agreement on how you intend to split your personal belongings, savings, properties and their contents in case your relationship ends. It can also include how your children will be supported, how debts will be split, and what will happen to any joint purchases, like a car, for example. One of the things that can be included in a cohabitation agreement is also your life insurance.

You may wonder why would you even need this if you trust your partner, love them and have the utmost faith in your relationship. Well, we all know that most relationships tend to end with time. When that happens, a cohabitation agreement is a piece of paper that can save you lots of time, trouble and money.

How unromantic, I know! But nevertheless, very smart.

How Can a Cohabitation Agreement Save You Money?

These days, more and more couples are choosing to live together before marrying or entering into a civil partnership. Some even choose to never recognise their relationship legally (through marriage or civil partnership). However, cohabitation does not give you the same legal rights as a marriage or civil partnership, because it does not bind you in the eyes of the law. For couples who live together, this can lead to problems and uncertainty in the case of a break-up.

Imagine this:

Let's say that partner A transfers their assets to partner B (partner B, whose name appears in the Land Registry, is the sole owner of the property). If they break up, whether after one, ten, or even 40 years, partner A is not entitled to financial support from partner B, even though they have always been financially supported. Partner A is also not legally entitled to any part of the property, even if they paid part of the loan or contributed in another way, for example, if they were a stay-at-home parent. Therefore, if partner B does not voluntarily agree to support them, partner A may be homeless if they are unable to go to court. That will cost them lots of money, time and effort. Not to mention that the chances of success for partner A are limited.

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How Does the Process Work?

While you can find some DIY contracts online, I would not recommend going down this path. It may not be the cheapest (from £600 to £3000 and more). In order for an agreement to have a chance of being accepted by a court, both parties must get some independent legal advice, and there can be no mistakes in the agreement.

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Note: Scotland has different laws and is excluded from this advice!

An advice from Genius James

Make a will! If you die without leaving a will, there are strict rules about who gets what. If you are not married or in a registered partnership, the only way you can be sure that your partner will inherit anything when you die is to make a will.

Written by: James Webb

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