In today’s society, unmarried cohabitation is not uncommon. In the UK, there is no so-called “common law marriage”, which exists in other countries. Cohabiting couples do not have the protection of legal couples, and the issue of money can become a very sensitive one. Many decide to enter a cohabitation agreement as a solution to this problem. But why should you enter one?


A new study has found that one in five (21%) Brits have had their relationships break up due to financial misunderstandings. 41% of those surveyed said they lose sleep due to the stress of money issues. Couples find it difficult to have open and honest discussions with each other while hoping to protect their assets.


We discussed why you should look to enter into a cohabitation agreement in a previous article here. Let’s look at what it actually is here.


What is a cohabitation agreement?


A cohabitation agreement is a written document, usually signed as a deed in front of witnesses, and it generally involves three main aspects:

  • Who owns (or owes) what at the time of the agreement, and in what proportion?
  • What financial arrangements you decide to make while living together, and
  • If you break up, how will property, assets, and income be divided?


If the agreement is well drafted, has reasonable terms, and both of you have obtained independent legal advice on the validity of the agreement, the courts are more likely to uphold the agreement in the event of a dispute.


Whether you are about to start living together or have been living together for several years, you can enter into a cohabitation agreement at any time. Your family lawyer can help you negotiate the agreement and write it down so it is respected by the courts in the event of a dispute. Many couples also find that the process of entering into a cohabitation agreement means they have the opportunity to think about and discuss how to live together financially, which means there is less chance of arguments over money later on.


What might you want drafted in a cohabitation agreement?


Shared house


If you buy a property together, the cohabitation agreement can list the shared property, but it is important to record who owns the home and whether there are any separate agreements or commitments that are not reflected in the legal document. Who is paying the mortgage? If there are any endowment insurance or other savings arrangements associated with the mortgage, what are the contribution limits for those insurance or savings arrangements? Do you want to insure each other’s lives? Your family lawyer may need to advise you on the implications of a shared home arrangement, as this is often the most complex issue faced by cohabitants.


Money and bill payments


Many people find it convenient to have a joint bank account when living together, but they need to decide how much to contribute to the account. Are the contributions equal? If not equal, would you consider the money in the joint account to be jointly owned? What will the joint account be used for, and when should your individual accounts be used? If not using a joint account, who pays for which of the household bills? What about credit cards and debt?




Pensions are often overlooked and can sometimes give you the opportunity to provide for your loved ones. For example, you may wish to agree on a nomination for line of duty death benefit.


Personal property


You should consider who owns and/or will keep items such as furniture and cars, and ideally work out now ownership rules for important items, or ways to resolve any disagreements in the event of separation.




Although not legally binding, it is worth considering whether you would be willing to provide support for any children (for example, school or college fees) above and beyond the minimum standards set out by the child support system if you separated set some expectations on how to care for your children.



Legal rules may change in the future, and the specific rights granted to cohabitants will also change accordingly. In addition, the circumstances of both parties will change. For example, if you move, suddenly have a child, or other major changes occur, you may need to revisit the agreement, and it’s important to make sure it’s up to date.


Cohabiting couples who are not married should also create a will so that if you die while you are living with someone else, your wishes will be carried out. While it is possible for cohabitants to inherit in certain circumstances, there are no strict rules so you must be clear about your wishes.


At Lisa’s Law, we regularly help young couples with cohabitation agreements. Contact us today to get started. 


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