If you are planning to buy a property with your partner, or are already living with them in a property that one of you owns, you should consider having a ‘Living Together’ or ‘Cohabitation’ Agreement. This clearly states what property you each own at the start of your relationship and how you intend to manage your finances while you are living together.
This is important because there is still no Law in England and Wales that allows for the assets of cohabiting couples to be divided after separation in the way that they would be after marriage. After a divorce, the Law looks to share the family assets along principles of priority and fairness which take a starting point of an equal division, irrespective of who legally owns any property, but the same Law does not apply to couples who have not married.
If you separate after living together the general rule is that you leave the relationship with any property or other assets, such as savings or investments, that you legally own in your name. This can often result in a sense of hardship, particularly if one of you feels you have made significant contributions in terms of financial or family commitment, such as looking after the home or family, which is not reflected in how you own the assets if your relationship ends.
If you and your partner live together but are unmarried, you do not necessarily have the same legal rights as a married couple. Even if you are in a long-term relationship and have lived together for an extensive period of time, you are generally not legally protected.
A cohabitation agreement is the formal agreement which can protect you and your partner’s assets, should you decide to end the relationship.
If you would like further information or advice about Cohabitation Agreements or any other issue related to living together, please contact us.