Unmarried Couples and Cohabitation

Protecting your interests

Cohabitation agreements

Cohabitation agreements are one of the ways that cohabiting couples can look to protect their financial interests.

This document set out how finances will be arranged during their relationship and their intention as to how they will be dealt with in the event they separate.

Some of the areas that can be covered in a cohabitation agreement includes property ownership, bank accounts, liabilities, household expenses and financial support.

Cohabitation agreements reflect the agreement reached between the parties in a legal document. Provided that both parties have obtained legal advice and financial disclosure has taken place, it is likely that a Court would hold the parties to such an agreement, in the event of separation.

Declaration of Trust 

Another way that cohabiting partners can protect their financial interests is by entering into a declaration of trust.

A declaration of trust is a legal document which confirms the beneficial ownership of an asset, such as a property.

This is commonly used when:

• There are unequal contributions to a deposit when purchasing a property;
• A family member has contributed towards the deposit but wishes to receive this sum of money back on the eventual sale of the property;
• If a cohabiting partner is not the legal owner of the property but is making financial contributions towards the property by paying towards the mortgage; or
• If a cohabiting partner contributes towards renovating the property but is not a legal owner of the property.

On separation

Rights of cohabiting couples

In the event of separation, cohabiting couples do not have financial claims that arise from their relationship in the same way as spouses do.

For example, cohabiting partners cannot bring claims to share in their partners pension or to benefit from spousal maintenance. This can often place individuals who are financially dependent on their partner in a vulnerable position, in the event of separation. 

A cohabiting partner may be able to assert a financial claim in relation to property, such as the family home.

Ultimately, such a claim will depend on if the individual can prove that they have a legal or beneficial interest in that asset.

The starting point to determine beneficial ownership is that equity follows the law and therefore, the onus is on the individual to prove that they have acquired this interest.

It may be that this can be shown by way of a declaration of trust or other written evidence of an agreement between them.

If there is no evidence of an agreement, the individual may be able to provide evidence that they have contributed towards an asset and the intention of the parties differed to the way the asset is legally owned.

This area of law is particularly complex, but our experienced team are well versed in assisting clients through this process.

Reaching an agreement

If a cohabiting relationship breaks down and an individual does believe that they have a legal or beneficial interest in an asset, we can assist them in trying to negotiate an agreement with their partner to try and resolve this.

Further, if a cohabiting couple have separated and reached an agreement between themselves as to how financial matters are to be dealt with, we can assist them by preparing a separation agreement to record this.

Arrangements for children

In the event unmarried and cohabiting couples separate, there may be arrangements for the children that need to be dealt with and our skilled team of child law specialists would be able to assist with this.

There are also financial claims which could be brought on behalf of the children under Schedule 1 of Children Act 1989. Such claims can be challenging and complex and even if such a claim is successful, the financial provision awarded will be for the benefit of the child only.