Why do you need a cohabitation agreement?

If you live with your partner, or considering moving in together, you may have thought about a cohabitation agreement. But do you actually need one? There is, of course, no legal requirement to have a cohabitation agreement to live with a partner, but it can be a useful tool to protect your finances and establish practical arrangements. In this article, we look at why you might want to get a cohabitation agreement and what such an agreement can do for you.

What is a cohabitation agreement?

A cohabitation agreement is basically an outline of an open and honest conversation about what you and your partner would like to happen should the relationship come to an end. When considering a cohabitation agreement, you can discuss the financial aspects of your relationship and set them out clearly, so both parties understand.

Do cohabitants have the same rights as married couples?

Quite simply, no. One of the key incentives to enter into a cohabitation agreement is to create certainty. Many couples who have lived together before separating end up in bitter disputes because there was no agreement about what should happen to property, money, businesses and even children beforehand.

Why should we enter into a cohabitation agreement?

Firstly, a cohabitation agreement can protect your financial interests and give you peace of mind that should your relationship come to an end, you will have certainty over what you will walk away with. Your agreement may make provision for a property you own, rented property, household bills and debts, and how you wish to divide any other jointly owned property.

If you do not have a cohabitation agreement in place, you will be left to organise the division of assets informally, at a time that may already be challenging and sensitive. Generally, it works best to manage these aspects of your relationship while you are both on good terms and looking forward to a life together.

While many feel that making a cohabitation agreement is pessimistic, it is more like an insurance policy. Having such an agreement in place can allow you to move forward in your lives together with confidence and security.

Should I get a cohabitation agreement if we are renting?

Yes, it is still a good idea to enter into a cohabitation agreement even if you are renting. In the agreement, you will set out who is responsible for the cost of rent, bills and expenses. You may also own other property together, such as a car or furniture. You may also have children to consider, either from a previous relationship or children that you have together. While you cannot make provision for care arrangements for children in a cohabitation agreement, it can be useful to manage money matters.