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Statistics show the divorce rate in England & Wales is slowly decreasing. One of the main reasons is due to the rise in the number of cohabiting couples who choose to share a home together without formalising their relationship by marriage or civil partnership.
Many people refer to the term common law marriage based on the fact they have lived together. They automatically assume they have the same financial protection as if they were a married couple but this is not the case. In the event of relationship breakdown, this can cause financial hardship for either one or both of the parties due to the confusion over what may or may not have been agreed in respect of financial division of assets and liabilities at the outset of the relationship.
The cohabitation agreement will lay out matters including payment of bills, what happens to the assets owned either jointly or individually, joint savings, bank accounts, personal assets and pension (death in service benefit) upon separation.
It is always advisable for both parties to instruct a solicitor in the preparation of a cohabitation agreement so they are aware of their legal rights.
By having a cohabitation agreement together with a will, the parties will have necessary protection in the event of death or separation. Provided it is executed properly and signed a deed, they are legally binding contracts and can be enforced providing both parties have been transparent about their finances. This avoids the need of incurring unnecessary legal costs in litigation.
The agreement must be entered into by consent, drafted in the correct form and reviewed periodically especially when there has been a significant change in circumstances such as a birth of a child. Both parties must sign the agreement. Should the parties decide to get married, they may consider entering into a pre-nuptial agreement.
At Consilia Legal we can assist you with the preparation of a cohabitation agreement. We offer a 30 minute no obligation consultation. If you require further information please contact our offices on 0113 322 9222.
