Are cohabitation agreements and nuptial agreements worth it?

With nearly a quarter of couples in the UK now choosing to live together unmarried, the need for cohabitation agreements for couples in the UK has become increasingly relevant. In 2022, according to the Office of National Statistics 22.7% of people aged 16 or older were cohabiting, a rate that reflects the trend toward committed partnerships without formal marriage. Yet, despite a common misconception, the UK has no legal status for “common law marriage,” regardless of how long a couple lives together or whether they have children. This lack of recognition often leads to confusion and limited legal protections for partners if they separate, especially when financial assets or property are involved.

Why consider a cohabitation agreement?

A cohabitation agreement for couples in the UK can clarify each partner’s rights, responsibilities, and entitlements, making separation smoother and more predictable if it occurs, regardless as to whether a property is owned or rented Without such an agreement, couples may need to rely on the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA), a complex piece of legislation that can lead to lengthy, costly legal disputes and court delays. For example, a couple who shares a home with one partner as the sole owner may face significant complications if they split up and lack a formal agreement.

Case study

Sarah and Tom’s story shows how a cohabitation agreement for couples in the UK can be invaluable. The couple decided to buy a house, but the mortgage and property was in Tom’s name alone. When they separated without a cohabitation agreement in place, Sarah had to pursue a TOLATA claim to secure her share of the property, resulting in a lengthy and costly legal process. Having a cohabitation agreement could have established her rights from the outset, sparing them both time and expense.

Protecting financial interests in co-ownership

When a couple purchases a property together, it’s essential to know the difference between Joint Tenancy and Tenancy in Common. In a Joint Tenancy, both partners equally own the property, with no distinct shares, meaning that if one person passes away, the other automatically inherits the property regardless of their will. In contrast, under a Tenancy in Common, each person holds a distinct share, which can be passed on through a will or intestacy rules. For couples contributing unequally to a purchase, recording the shares in a Trust Deed is often wise, as it protects each partner’s investment. A cohabitation agreement for couples in the UK can outline these details clearly, ensuring transparency and protection.

Regularly updating cohabitation agreements

It’s important to keep a cohabitation agreement updated to reflect changes in the relationship or financial circumstances. Experts recommend revisiting the agreement every five years or after significant life events, like the birth of a child, receiving an inheritance, or purchasing a new property. By maintaining an up-to-date agreement, both partners can ensure that their intentions are clear and legally recognised, which can prevent costly misunderstandings later on.

What if the couple decide to marry?

If a cohabiting couple chooses to marry, the cohabitation agreement will no longer be valid. Instead, they will need to consider a prenuptial or postnuptial agreement. Although these agreements are not automatically binding in the UK, they can be recognised by courts if they meet criteria including:

• It must be contractually valid – the parties must enter into the agreement of their own free will, without any mistake, duress, misrepresentation, or undue influence
• It must be validly executed as a deed – signed by both parties, confirming their understanding and implications to the agreement
• It must not have been made within 28 days of the date of the wedding
• Both parties must have received disclosure of the party’s financial agreement and received legal advice
• Both parties must have received legal advice
• It must be fair to hold the parties to the agreement, and must not prejudice any children
• Both parties’ needs must be met

Access further information on cohabitation agreements

For more guidance on cohabitation agreements for couples in the UK, property rights, and co-ownership structures, visit our Living Together & Cohabiting Couples page. Our family law team can help you make appropriate declarations when purchasing property and ensure clarity for both parties in the event of disputes. A well-drafted cohabitation agreement can prevent many of the legal and financial complications that arise when cohabiting relationships end, allowing you to protect your rights and interests effectively.

FAQs

What is a cohabitation agreement?

A cohabitation agreement outlines each partner’s property rights in case the relationship ends, providing clarity on asset ownership and how expenses will be managed, and how long each party can remain living in the property upon separation.

What is the difference between a declaration of trust and a cohabitation agreement?

Declarations of trust typically outline the shares in which property is held and specify how sale proceeds will be divided if the property is sold. In contrast, cohabitation agreements are generally more comprehensive, covering arrangements in the event the relationship ends.  This may include the division of household bills, mortgage/rent repayments, and living arrangements. 

Do I need a solicitor for a cohabitation agreement?

It’s essential to create a cohabitation agreement with the guidance of an experienced family law solicitor. Professional assistance ensures that the agreement is fair, in both partners’ best interests, and more likely to be upheld in court.

About the author

Victoria joined Machins in 2017 and qualified as a solicitor in 2021, focusing on private family law with a strong expertise in private children cases and complex financial remedies. She achieved her Resolution accreditation in 2023 and serves as Chair of Herts Y-Res, a group supporting junior family law solicitors. Dedicated to helping families through challenging times, Victoria is deeply committed to providing practical solutions in family law.