Cohabitation agreements: Law Society guidance

The Cohabitation Rights Bill is sluggishly making its way through parliament with little sign yet of it becoming law. Meanwhile, the Law Society has issued useful guidance on cohabitation agreements which couples ought to consider – and practitioners should be recommending when they can.

Cohabitation agreements could be a new area for your practice if you don’t currently offer it, says the Society, with unmarried cohabiting families the fastest growing type of family in the UK. And because they (still) have fewer rights than married couples and those in civil partnership, they may want a cohabitation agreement.

According to the Office for National Statistics (ONS), cohabiting couple families in the UK are growing the fastest. In 2017, the second largest family type was the cohabiting couple family at 3.3m families. It’s not hard to see, in light of these figures, that the cohabitee market is large (and growing) - and lawyers acting for individuals living as a cohabitee should be taking positive steps to help them protect their legal rights.

Assuming the Cohabitation Right Bill eventually becomes law, the rights of some cohabitees will have greater protection – though still relatively modest. Cohabitees will not be given the same extent of financial relief available on divorce but the courts may be able to adjust the financial position in some cases of relationship breakdown to reach a fair split – in order to redress a financial benefit or an economic disadvantage resulting from the cohabitation period.

The provisions will be limited and it is increasingly important for anyone living together, but who intend to remain unmarried, to consider formalising an agreement in this way.

Romantic and non-romantic cohabitees
The guidance, Cohabitation agreements, explains what you can discuss with the couple and why a cohabitation agreement should be considered. And it’s not just couples – friends and other family members, such as siblings, might decide to combine their financial resources to get a step on the housing ladder and buy a property together. Their rights need to be protected.

The guidance explains what information practitioners need, including any relevant documents to support the agreement, eg. birth certificates of any children in the relationship, proof of bank accounts and other assets, and tenancy agreement or evidence of property ownership.

You should also consider how any cross-border assets should be (or will be) dealt with in the case of a relationship breakdown. Should the agreement reflect the law in the jurisdiction in which a particular asset, for instance, a holiday home, is located?

Practitioners are reminded of the necessary legalities to ensure the final agreement is valid; and the importance of each party taking independent legal advice before committing to it. Reminding clients of the need to review it if there are any changes in circumstances is also recommended.

There are also opportunities to offer related legal services. If your clients have not yet made a will, they should do to – particularly if each wants the other to inherit their estate on death. If you know they are still married to someone else or have children from previous relationships, for instance, a consideration of making a will is vital.

 

 

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