Here’s why you need to consider legal protection if you are living together
The length of time couples are living together without getting married is on the rise, as well as the number of people choosing to get married declining.
Whilst that’s certainly not a bad thing, it can make joint finances more complex to divide if the relationship ends, or if the worst should happen, a partner dies.
That’s why it is important to put in place legal protection to plan for the unexpected.
Many people choose to live together and assume that because they share the same house, they have the same rights and protection as a married couple.
Unfortunately this is a misunderstanding.
Couples that cohabit have no rights over their partner’s income or assets unless they own the assets jointly, have made substantial capital injection or alternatively they have entered into a cohabitation agreement stating how their assets are to be divided.
You do not obtain rights against a person or their assets simply by living with them regardless of how long you live together.
It is possible for couples who live together to put in place a cohabitation agreement.
Most couples who do so are mainly concerned about what might happens if one of them dies.
However, most problems are caused by separation not death and the majority of couples have nothing in place for this eventuality.
At the start of a relationship, couples understandably don’t want to think about the relationship breaking down, however this is the time when such matters need to be considered.
As the old saying goes, “hope for the best but plan for the worst.” If you are cohabiting or thinking about living together, it is extremely important to protect yourself in case the worst happens.
A cohabitation agreement is flexible and can be drawn up to state whatever the parties agree.
- The agreement will provide a framework for what will happen if the relationship breaks down
- Creates certainty so both parties know where they stand
- The agreement provides a record of each party’s intentions at that time
It is common to include in the agreement details such as who will retain cars; items purchased jointly items on credit etc.
If, for example you have a hobby of motorbike racing and your partner buys you a motor bike, as a present, but the bike is in your partner’s name, then legally the bike is your partner’s asset.
The reality of the situation is that the bike was purchased for you as a present and it was intended to be yours.
If it is stated in the cohabitation agreement that you will retain the bike upon separation this has resolved a potentially explosive argument upon separation.
All matters must be considered, as the reality of situations is often very different to the position as far as the law is concerned.
Cohabitation agreements are based in contract law however this does not stop one of the parties trying to back down on the agreement.
If this happens, a Court would need to decide matters. If there is no agreement in place it is then one party’s word against the other and the parties have to resolve the issue amongst themselves.
A Court can only become involved when there is a legal matter in issue, i.e. in this instance breach of a contractual agreement. Without the agreement there is nothing either party can do to make the other party adhere to what they had previously verbally agreed.
To find out more about our complete range of legal services for couples who live together, please get in touch with us today.
Why should you get a pre-nup?
Whilst its not the most romantic subject, a pre-nup acts as a safety net in case your relationship does break down.
It’s a means for both you and your partner to protect your assets and enter your marriage secure in the knowledge that you have your best interests in mind.
If you are considering getting married or entering into a civil partnership and wish to protect yourself financially you should enter into a pre-nuptial agreement.
A pre-nuptial agreement – or ‘pre-nup’ – confirms the agreement reached between you and your future spouse or civil partner regarding what should happen with your finances in the unfortunate event that the relationship breaks down.
Pre-nups are not yet legally binding, however the courts do take them into consideration and appear to be giving increasing weight to them.
A court will take a pre- nuptial agreement into account providing there have been no significant events which are not covered within the agreement, such as the birth of a child of the family or serious illness and the following criteria are met:
- Both parties have either obtained independent legal advice or been given the opportunity to do so
- Both parties have provided full and frank financial disclosure of their respective financial positions
- There has not been any pressure applied to either party to enter into the pre-nuptial agreement
If you and your spouse/civil partner separate, the court will consider all the circumstances of the case in deciding what is a fair settlement and courts are now considering a pre-nuptial agreement as part of these circumstances.
Even if the court does not uphold the terms of the pre-nuptial agreement the terms of the agreement may still prove a significant factor in its decision and can provide a starting point for negotiations.
It is therefore far better to have such an agreement in place, rather than nothing at all.
An important word of warning: to ensure no pressure is considered to have been exerted on either party, the pre-nuptial agreement must be entered into ‘comfortably in advance’ of the marriage or civil partnership.
In practice, that means you shouldn’t sign a pre nup on the eve of the wedding as it may suggest that one of the parties was under duress to do so.
To find out more about our complete range of legal services for couples who live together, please get in touch with us today.
Contact us for support
At Palmers, our family law team can help you put in place both a cohabitation agreement and a pre-nup.
To find out more about our complete range of legal services for couples who live together, please get in touch with us today.
