Cohabitation agreements

A cohabitation agreement is a legal document, enforceable by the court if it is properly executed and providing you have both been honest about your finances and each obtained separate legal advice upon its terms. 

Specialist legal advice will help ensure your agreement covers everything you need it to cover and that it is valid. The cost of getting an agreement properly drawn up far outweighs the cost of dealing with a dispute.  

Whilst you can access examples and templates online, the agreement should be specific to your circumstances. Generic templates may miss things out or include things you simply don’t need. For the agreement to be valid, it’s important that you both seek independent legal advice to make sure neither of you are in any doubt as to what the agreement covers and ensure there are no mistakes in the document. 

Yes, a cohabitation agreement can be changed once it’s been created. It is good to keep it updated as your relationship changes or if anything significant happens in your relationship. For example:  

• The birth of children 
• One of you becomes seriously ill or disabled 
• One of you is made redundant or your finances change significantly
• One of you receives a large inheritance 
• You plan on getting married or entering into a civil partnership 

If you’re worried about what will happen if you or your partner dies while you are cohabiting, it’s important that you both outline your wishes in your cohabitation agreement and that you also seek legal advice and you each enter into a Will. Without a valid Will in place, your wishes may not be implemented in the event of first death.

The starting point is for you both to discuss and then agree the key issues which could affect your business and anticipate problems before they arise. Whatever you agree should then be properly recorded for future reference, either in a shareholders’ or a partnership agreement depending on your business structure and with a cohabitation agreement to ensure it is clear what happens to the business if your personal relationship were to end.

These agreements can cover how the business will be managed on a day-to-day basis, how key decisions will be made, how you are each remunerated and the future of your business including any succession planning.

As tenants in common, you each own a specific share of your property. If you want to change how you own your property, you will need to enter into a new declaration of trust, which can be included within a properly executed cohabitation agreement.

The following are essential for a valid and binding cohabitation agreement: 

• You should both enter into the agreement freely and voluntarily (after taking independent legal advice) 
• The agreement should be set out in the form of a deed 
• Each of you must sign the document 
• Updating it in light of significant changes of circumstance