What is a living together agreement and why do you need one?
In essence, what a prenup is to getting married, a cohabitation or living together agreement is to living together. A living together agreement is as it sounds: a simple agreement that protects assets that were acquired before you began to live together. It also details how you will share any assets and debts acquired whilst living together, and often includes how you will share the costs of cohabiting.
Living together agreements can cover everything from physical property to financial assets, from child support to who gets to keep the cat. It isn't very romantic, but it can save a lot of heartache, not to mention a lot of money paying for a costly court case if it all goes wrong and you're totally unprepared.
What does a standard agreement say?
A standard living together agreement tends to specify the following:
* that pre-living together assets such as the home they share remain the property of the partner who originally acquired them
* that both assets and debts acquired together during cohabitation are jointly owned
* that assets individually acquired during cohabitation remain the property of the individual who acquired them
* that living expenses will be paid equally or otherwise in pre-agreed percentages
Why is a living together agreement necessary?
There are many situations in which you'd be well advised to insist on a living together agreement, the most common four of which are as follows:
* you are buying a house together and for some reason the title is only in one of your names or one partner owns the house in their sole name that you now both live in
Many couples choose to have living together agreements in place 'just in case'. They feel they're being practical rather than pessimistic and having a simple agreement drawn up makes perfect sense.
Both parties should take independent legal advice prior to entering into a living together agreement. It is also a legal requirement that both partners enter into the agreement of their own volition and that both are happy to make full financial disclosures when the agreement is drawn up.
Remember that a cohabitation agreement doesn't mean you don’t trust one another or that you expect your relationship not to last. It's more about protecting yourselves and each other should things not work out. As it stands, there are few laws protecting unmarried couples in the event of their relationship breaking down. ‘Common law marriage’ status does not exist within the law, no matter how many years a couple are together. So, if you don't want to get married, taking the responsibility to make sure there is clarity and fairness in the event of a split is the wisest course of action you can take.
Call or email Amanda Weaver on 01788 555042 or firstname.lastname@example.org for further information.