Living Together Arrangements
Securing your financial future
The number of couples choosing to live together but not get married is on the increase. This in itself it not a problem; the potential difficulties arise if the relationship were to break down. Unless careful consideration is given at the outset, the consequences in relation to their respective assets can be disastrous.
As lawyers advising on such matters over many years we are often asked what will happen to property owned by one of the parties should the relationship break down. They worry if they “move” their partner into their property the partner will then have a “claim” on the property or other assets even if they are not married.
The same difficulties can arise if the parties buy a property together in unequal shares but do not protect or “ring-fence” their financial interest – for example, one party may contribute a higher amount towards the deposit or the deposit may be funded partly or entirely by one of the parties’ parents or other relative.
It is becoming increasingly common for couples in this position to have a Living Together Agreement drawn up (or cohabitation agreement as it is also known). Scott Richards can offer this service for a fixed fee, starting at £1,000.00 plus VAT.
You might wonder why this is relevant but it is: couples that live together can make virtually no use of the system of law available to married persons and are therefore much more vulnerable if the relationship breaks down or the death of one party.
Whereas the Courts have power to adjust property rights on divorce, they can only determine who owns property and in what shares on the basis of actual contributions of unmarried couples and/or their intentions. It may be difficult to prove actual contributions and on separation either or both of the parties may have honestly forgotten (or conveniently forgotten) their original intentions.
A living together agreement provides the framework for couples to record their intentions and record their respective contributions. This in turn will hopefully set aside any fears they may have prior to living together and they can feel safe in the knowledge that if the relationship was to break down, then the agreement will safeguard them financially.
The terms to be included in the agreement are a matter for the parties involved, however it is extremely important that both parties seek independent legal advice. The agreement can include details about property, payment of the mortgage, outgoings, ownership of contents, liability for debt, ownership of bank accounts and much more.
The agreement will need to be precise and detailed and confirm that the parties intend to create legal relations which will then ensure that the agreement carries weight, should it be relied upon in the event of a relationship breakdown.
The parties may also be advised in relation to a Deed of Trust being drafted which sets out the ownership and respective beneficial interests in the home.
It is also essential that couples living together both make Wills, particularly because of the lack of protection under the Intestacy Rules. Any existing Wills should be checked to ensure they are appropriate for the couple’s present circumstances, especially where one or both have pre-existing obligations such as children from a previous marriage or relationship.
Please contact a member of the Family Department if you would like to find out more. You can call us on 01626 772441, or send us an email.