Is a Cohabitation Agreement the Right Choice For Unmarried Couples?

Over 5m people in the UK cohabit, according to the Office for National Statistics, making the arrangement the fastest-growing family type, up 29.7% since 2004. There were nearly 3m couples and 84,000 same-sex cohabiting couples last year, making up 16.4% of all families in the UK.

A recent study by sociologist Alison Hatch, Saying “I Don’t” to Matrimony, examines why so many couples prefer to live together without getting married. Ms Hatch concluded that some do not want to marry because they do not agree with what it means “as an institution or a ritual”, and that it conflicts with personal issues of civil liberty, equality and religious freedom. However, she found that a larger category is comprised of people with “fears about the consequences of marriage and the belief that the perceived risks associated with marriage outweigh the perceived benefits”. This second category objects to the sense of “ownership” created by marriage, and the expectations it places, particularly on women.

What can couples do?

However, even as so many more couples choose not to marry, misconceptions around cohabitation remain, with the British Social Attitudes Survey of 2008 finding that 51% of respondents think that “common law marriage exists” exists.

A cohabitation rights bill is making its slow progress through Parliament to address this, though it has yet to pass from the Lords to the Commons. In the meantime, couples who cohabit, but have no plans to marry or enter into a civil partnership, can take a number of steps to arrange their financial affairs to protect themselves. The first is to ensure that each has a valid will in place. Even though the rules of intestacy were revised last year, allowing surviving spouses to inherit the entire estate, in instances where there are surviving children, the spouse will receive the first £250,000 plus half of the remaining assets, with the other half shared equally among the children. An up-to-date will ensures that the wishes of the deceased will be documented.

Additionally, a formal cohabitation agreement or declaration of trust can be drawn up by a solicitor, itemising exactly what assets each partner brings to the relationship and how they should be divided should there be a split at a later date. Such an agreement should also set out how much someone has contributed to any mortgage deposit and repayments. Similarly, cohabiting couples with mortgages should decide ahead of purchasing a home whether to arrange the contract as joint tenants – where both partners own the whole property – or tenants in common – where each owns a specified share which can be bequeathed to a beneficiary.

Partnerships shouldn’t be “one-size fits all”

Betsey Stevenson, an economic consultant to President Barack Obama, has spoken of the decision she and her partner Justin took to eschew marriage in favour of cohabitation. She commented, “Marriage is a contract between two people about how to organize their lives together. But modern marriage is a one-size-fits-all contract – a default written by the state legislatures […] So we didn’t take the standard off-the-shelf contract that we call marriage. Instead, we’ve talked at length about what is important to each of us, and it’s that Betsey-and-Justin-specific agreement that guides our lives together. And as anyone who has studied divorce knows, the formal marriage contract doesn’t actually bind our future selves”.

Amanda Melton, partner and divorce law expert commented:

“It is not surprising that people find marriage a difficult pill to swallow. Entering into marriage brings with it a number of potential side effects not least that any property you owned before marriage may no longer be yours! Marriage is essentially a legal contract which brings with it a changed legal status and various legal responsibilities which you do not have as an unmarried couple. Despite the fact that we are expected to consider carefully a contract for anything else in life before we enter into it – there is no such expectation when it comes to marriage. Even if we do consider it and suggest a pre nuptial agreement (which is currently the only way of at least attempting to self-regulate what you want to happen in the event the marriage goes wrong) society still considers these agreements a taboo subject. Rather than encouraging people to consider the legal ramifications of marriage, in reality we find the fact that someone raises the issue distasteful. This is of course understandable because we consider marriage to be so important within society that we do not want to imagine the possibility of it going wrong. However the statistics show that it does go wrong and surely it is better to encourage people to think about that before they enter into the contract of marriage.

What is even more surprising is that despite the level of publicity afforded to the lack of provision for unmarried couples, especially couples with children, there are still many people out there who enter into a cohabiting relationship genuinely believing that after 6 months they automatically become a “common law spouse” and are entitled to a half of their partner’s assets. For those who opt out of marriage because of the consequences it brings with it – to find themselves having erroneously thought they could claim half anyway would be bitterly disappointed.

In summary, those who enter into marriage do so blindly and without thought to the consequences, mainly because society does not encourage them to consider it a contract with legal obligations. On the other hand, those entering into a cohabitation do so erroneously believing they will have some automatic entitlement.

Maybe the answer is that it is the relationship which deserves to be treated as a contract whether it is labelled as a marriage or a cohabitation. Contracts can be drawn up to regulate a breakdown in both so take advantage of that and remove the uncertainty in both. “

If you would like to discuss any aspect of divorce and family law, or want to draw up a pre or post-nuptial agreement or cohabitation agreement, call our mediation, divorce and family dispute resolution solicitors in absolute confidence on 03456 381381. Alternatively, email us at familylaw@ibblaw.co.uk.

We can provide initial short family law consultations at a reduced fixed fee, where our expert advisors will be able to give you initial guidance on ways to resolve family disputes, either through mediation or individual representation. We will always provide you with cost estimates at the start and throughout your case.