Last week I spoke to someone who thought they needed a pre-nuptial agreement.As it turns out what they really needed was a cohabitation agreement.But what perhaps surprised the person I spoke to is what is exactly it could do and what is involved. As the number of people cohabiting increases and the financial position of those choosing to cohabit is perhaps better than it was, the need for cohabitation agreements is increasing.
What does a cohabitation agreement do? – A cohabitation agreement has a number of functions.Firstly, it sets out what would happen in the event that you and your partner entering into the agreement separate. The agreement will protect your property and assets accumulated prior to living together, but also deal with those property and assets built up during the relationship.Secondly, the agreement will set out how you will divide the household bills and living costs whilst you are living together, as well as whose responsibility maintenance and repair costs will be.This can be very important when only one of you is buying a property and inviting the other to live there. Thirdly, if you borrowed money individually or together whether it be by way of mortgage or credit card debts, the agreement will set out who is responsible for the repayment of those debts.
So what is involved? – Most importantly, you must agree what you want the agreement to say!To ensure the agreement is upheld in the event of a dispute, both of you should take independent legal advice and make full disclosure of your respective financial positions.
What happens if we get married? – The agreement will have no validity once you are married.If you still want to protect any assets or your financial position, you should consider entering into a pre-nuptial agreement.
If you are thinking of living with your partner and want some expert and practical advice about your situation, please contact me, Sara Barnes, on 01245 809 556 or firstname.lastname@example.org