Cohabitation agreements offer valuable protection for unmarried couples, but it’s important to consider the difference between cohabitants’ and spousal rights
Over the past few years, there’s been a big surge in unmarried couples entering into cohabitation agreements, usually when they are buying a home together.
We’re strongly in favour of this development since ‘cohabs’, as they are known, provide valuable clarity and certainty about what happens if couples split. For example, they could provide for scenarios such as one partner getting back the deposit they paid, or one partner getting first dibs on staying in the property.
This is important because unlike with spouses and civil partners, there are no hard and fast rules stating cohabitants’ entitlements on separation, leading to the potential for legal disputes or one suffering financial loss.
‘We just got married!’
However, as the number of people sensibly opting for cohabs increases, we’re also seeing a rise in another scenario – that during the course of drawing up the cohab, clients happen to mention that they’re about to get married or have even just done so!
Whilst we’re always delighted for them, this does create some legal awkwardness. As we said above, a cohabitation agreement is a way for unmarried couples to decide what will happen when they separate. Once they marry or enter into a civil partnership, they automatically gain rights that unmarried couples don’t have. For example to share in the value of assets acquired during the course of the marriage if they split. They also acquire some automatic inheritance rights.
Unfortunately, this may mean their cohab is no longer fit for purpose, since various assets and rights may not have been considered, or the terms of the agreement may conflict with legal rights gained on marriage.
Catering for your situation
We certainly don’t want to deter couples from making cohabs. The protection and clarity they offer is so important. But we do suggest that if you’re engaged or likely to marry, do tell your solicitor when making a cohab.
A good family lawyer can then advise on whether a pre-nuptial agreement would be more useful for you both, or how to draw up a cohab that would be fit for purpose after marriage as well as before.
Published 17 October 2024.