Thinking of moving in together? Here are the reasons why you should consider arranging a living together agreement
It’s the new year, and a popular time for couples to start thinking about making the leap and moving in together. While your Facebook feed may be full of newly engaged couples over the festive period, cohabiting couples are actually the fastest growing family type in the UK.
According to the Office for National Statistics, we have seen a sharp increase in the number of cohabiting couples over the past 15 years – increasing from 6.8% in 2002 to 9.5% in 2015.
When the last census was held in 2014, there were around 3.2 million unmarried couples living together in the UK, double the amount of that in the mid-1990s. This dramatic increase of cohabiting couples has also led to a rise in complex and often costly legal disputes when they split up.
Living together and the law
Much like divorcing couples, the issues that arise when a cohabiting couple separate can vary considerably. Couples who are renting a property, may disagree over who will stay in the property, what to do with the joint account and who acquires particular belongings. For those who moved into their partner’s home, disputes around claiming back money they put into the property are common.
Despite the increase in the number of couples and families choosing to cohabit, virtually nothing has changed in how the law treats them, and their property, if they are to separate.
An alarming number of people believe they are protected as a ‘common-law spouse’ or ‘common law’ partner. According to research by the Co-op, around 1 in 4 people living together believe they have the same legal protection as married couples. Sadly, this is not the case.
Married couples who divorce can potentially receive an equal share of any matrimonial asset, regardless of in whose name that asset is held.
Cohabiting couples have no such rights, irrespective of how long they have been living together or if they have children.
Why is a living together agreement vital for all cohabiting couples?
It is becoming increasingly common for couples to enter into a pre-nuptial agreement before marrying, to protect their assets should the marriage end (see our article ‘5 Things to Know about UK Prenuptial Agreements’).
Cohabiting couples, who wish to have legal protection, can enter into a “living together agreement”, also known as a cohabitation agreement or a “no nup”.
Having a living together agreement in place means each party knows their financial rights and responsibilities while they are cohabiting, as well as defining what should happen if they are to separate.
Without an agreement, there can be a real risk of disputes arising upon separation. These disputes often lead to legal proceedings which can be lengthy and expensive, but also upsetting and stressful at an already emotionally charged time.
While putting an agreement in place can sound unromantic, and even pessimistic, a living together agreement can actually help the cohabitation as responsibilities are set out from the beginning. Think of it like health cover; taking it out doesn’t mean you will get ill, but it is good to know you are protected if anything should happen.
What is a living together agreement?
A living together agreement, (or a cohabitation agreement), can cover many areas and you decide on how much detail, or how little detail goes into it.
Typically, the agreement sets out who owns what, such as property, belongings, savings and any other assets. It also outlines who is responsible for certain things if the relationship should end such as bank accounts, debts, joint purchases and child support over and above any legal requirement to maintain them.
You can also set out the management of day-to-day finances while you live together, such as how much each person will pay towards the rent, mortgage and monthly bills.
Not just for couples.
While we have focused on couples moving in together in this article, living together agreements can also be used when moving in with friends, or pooling resources with family members to purchase a property.
Apart from a living together agreement, do we need anything else to protect ourselves legally?
English law does not recognise cohabiting partners, so it’s vital to make a will to ensure your partner will inherit what you would like them to in the event of your death.
(Note that the situation is different in Scotland where cohabitation and property rights are defined under the Family Law (Scotland) Act 2006.)
How we can help
At Osborne Morris & Morgan, we understand that this can be a difficult subject to broach, however we believe that these agreements can provide clarity and peace of mind.
Finding an experienced and trusted law firm to help with your living together agreement will make the process much easier for you and your partner.
We provide skilled advice on the steps you can take to help the cohabitation run smoothly, and protect your future should the relationship end.
We offer an initial consultation with one of our friendly and experienced lawyers for £79+VAT. Please call us on 01525 378177 or contact us in Leighton Buzzard for more information.