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Do I need a cohabitation agreement?

Happy couple going through terms of an agreement during a meeting with financial advisor.
Cohabitation agreements are written documents that outline how existing and future assets will be owned, who will be responsible for utilities and outgoings, and how finances will be divided if a couple decides to separate. Although it may seem unromantic to discuss finances, having a Cohabitation Agreement in place can actually strengthen a relationship by addressing the “elephant in the room.” It allows both parties to build trust through honest conversations, ensuring that questions about finances don’t linger in the background and fester over time.

One of the main advantages of a Cohabitation Agreement is that it protects each partner’s financial position, especially if they have children. It’s important to note that without a will, a cohabiting partner won’t automatically be entitled to an estate in the same way as a widow/widower in a marriage. Therefore, a Cohabitation Agreement is critical to safeguarding your position while you’re alive and mitigating any claims against your estate after your death.

There are several reasons to consider a Cohabitation Agreement. For instance, if you’re moving in with a new partner, purchasing a property, planning to have children, or merging finances, you should think about having an Agreement in place. Additionally, if you’ve gone through a marital breakdown in the past and wish to avoid an acrimonious separation, a Cohabitation Agreement can help ensure that both parties know what to expect.

Despite its advantages, some people regard a Cohabitation Agreement as unromantic and potentially relationship-threatening. However, having an Agreement in place is crucial to protect both parties and can help ensure an amicable separation if it ever comes to that. While there may be initial costs associated with drawing up an Agreement, it’s an investment that can save you thousands in legal fees in the long run and provide financial security.

Finally, a Cohabitation Agreement is enforceable by the court. However, to be considered valid, it must have been executed properly, with transparency and financial disclosure, and without pressure or undue influence from the other party. In summary, a Cohabitation Agreement is a valuable tool that can clarify misunderstandings and prevent costly disputes, providing peace of mind and security for both partners.

Some fictional examples where a cohabitation agreement would be used are:
  • John and Jane have been together for two years and plan to move in together. John owns a house and wants to make sure that his investment is protected in case the relationship ends. They decide to sign a cohabitation agreement that specifies how the property will be divided if they break up.
  • Tom and Sarah have been living together for five years and are expecting their first child. They want to make sure that their finances are in order and that they are both protected in case anything happens to one of them. They decide to sign a cohabitation agreement that specifies how their assets will be divided and how their child will be provided for.
  • Rachel and Mike are in their 60s and have both been married before. They want to avoid the acrimony of a messy divorce and decide to sign a cohabitation agreement that specifies how their assets will be divided if they break up. They also make sure that their wills are up to date and that they have named each other as beneficiaries.
  • Alex and David have been together for a year and are planning to buy a house together. They want to make sure that they are both protected in case the relationship ends and decide to sign a cohabitation agreement that specifies how the property will be divided if they break up.

If you are considering drafting a cohabitation agreement, it is highly recommended to seek professional help. We have extensive experience in drafting cohabitation agreements that protect your interests. Contact us today to learn more about how we can help you create a cohabitation agreement that suits your unique circumstances.
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