How do I protect my financial position if I cohabit without getting married?

How do I protect my financial position if I cohabit without getting married?

A coalition of legal organisations and family charities, including the bar Council, the law society, resolution, and relate, have urged the government to provide legal protection to millions of cohabiting couples as evidence continues to emerge of the increase in the number of civil partnerships and deathbed marriages being entered into.

Couples choosing not to marry, or enter into a civil partnership (currently available only to same sex couples-although the Supreme Court earlier this year ruled this as being discriminatory) have no benefits or inheritance rights should their partner die.

Upon death of a partner, unmarried couples do not have rights to their pension, and are left exposed to inheritance tax. They are also denied certain benefits. This is not the position in Scotland however, where cohabitants rights have been recognised since 2006.

Despite all of the publicity, it would appear that many people are still under the misconception that once you have lived with someone for a couple of years or more, you gain the same rights as if you were married. There is no such thing as "common law marriage".

Entering into a living together agreement (or cohabitation agreement, or “no-nup”) enables partners to record what has been agreed between them as to how you will own, and share things, with your partner. It enables you both to consider easy and fair ways of organising both your day to day finances, and insures that should your relationship end, neither of you loses out financially.

An agreement that sets out matters such as who will pay the rent or mortgage, the household bills, etc. can avoid arguments during the relationship, but it comes in really useful if you split up. Couples who have not entered into a living together agreement often find that they have very different expectations as to what should happen, or ideas as to what is fair. For couples that have been in a relationship for a long time, it is often difficult to even remember who made what financial contribution, let alone what was said about it at the time.

Ideally, you would enter into a living together agreement at the time that you first start to cohabit. However, there is never a wrong time to enter into such an agreement, and doing so late is better than never having done so at all.

He living together agreement is not legally binding unless it is written as a formal legal deed, but the court will usually follow them as long as what has been agreed is fair, and that you are both honest about your financial positions when you first entered into the agreement. The court is even more likely to oppose the agreement if you both took independent legal advice about what you were doing before the agreement was signed.

If you want to ensure that the agreement is binding then must be made in the form of a deed.

If you have children, either together, or from an earlier relationship, it is important to include them in the agreement. You need to consider who is to be responsible for them, the physically and financially.

A living together agreement considers many different aspects. It looks at your income, capital, home ownership, insurances, expenses and debts, savings, ownership of contents and other personal possessions, vehicles, pensions, what happens should your relationship end, what the transitional arrangements are to be, and other ancillary matters. It will encompass transitional arrangements whilst you go through the process of terminating your relationship.

It can be seen from the above that considerable thought needs to go into the contents of a Living Together Agreement, and some people may find the prospect of sitting down together and discussing all of this somewhat daunting. It is, however, much more daunting to separate without financial certainty, and entering into a Living Together Agreement will provide you with certainty and security.

If we can help you, or you have any concerns regarding your current legal status, please do not hesitate to contact us for an initial appointment when we can discuss the position with you.