Benefits of Using a Cohabitation Agreement
When a couple decides to live together or has already been living together for some time now, they may choose to reach a cohabitation agreement. There are a number of benefits to entering such an agreement and all of them would work for the couple. It’s an official contract between two parties which would give them some level of security in their relationship.
Here are the benefits:
It’s the Next Step, Logically
When a relationship gets deeper and more serious, you as a couple would most likely start thinking about taking the next step which would solidify and validate the growth of your relationship. For those who don’t want to be married, this is the best and most logical next step and it would signify that your relationship is, in fact, progressing.
It’s a Chance to Get to Know Each Other More
Living together may be a sort of “trial run” before you actually get married. It would give you a chance to get to know your partner more and learn about each other’s living habits before entering into a more legal commitment. So as you agree to live together and make it official, you would be giving yourself an opportunity which would strengthen your ties.
You Would Benefit Financially
When you and your partner come to terms with what is to be written and included in your cohabitation agreement form, you’d be able to decide how your finances will be handled. As you will be living together, you’d most likely be sharing the daily living expenses, which means that you would save a lot of money. Sharing the expenses is great for your relationship and you’d be able to budget your finances a lot better.
You Would Learn How to be Responsible for Another Person
Depending on what you and your partner had agreed upon in the document, you make the decision to live together. When you have an official document to support your decision, you’d somehow already be responsible for your partner. You’d be making decisions which would be based on what’s best, not only for you but also for your partner and for both of you as a couple. Through this, your relationship will most likely grow and become a lot stronger.
You’d Have the Freedom to Leave when You Need to
As you’ve outlined and covered all the relevant issues in your agreement, you would have also covered what would happen in the event that things go south and your relationship comes to an end. You would then have the freedom to leave as you would already know what the consequences are.
As you can see, there are many benefits to reaching this kind of agreement as you live together in a home with your partner. You can ask for legal consultation when you are planning to make such an agreement however it would be good for you to know what should be covered.
Issues to Cover in Your Cohabitation Agreement
Now that you have a better idea of what is a cohabitation agreement, you may already be thinking about making one for you and your partner. Before you do so, let’s take a look at the issues which should be covered in the very basic kind of agreement. You may, however, make changes if you think some of these don’t apply to you.
Real Estate Properties (Cohabitation Agreement)
In cases where you or your partner would decide to buy a house, an apartment or a unit in a condominium in the future, you would have to think about how you would be dealing with the said property. In your agreement, you should state:
• How the real estate property will be acquired (separately or joint).
• If purchased together, how would the division of payment be?
• If the division is not equal, how would the ownership of the property be?
• What would happen to the property in the event that the relationship ends for whatever reason?
Separate Personal Properties
Of course, when you enter into a relationship with another person, you would already have your own personal properties. You can place a section in your agreement whether you choose to continue to separately own your personal property or not.
Living together as a couple would allow you to save a lot of money as opposed to when you were living separately. However, you would have to decide how joint expenses would be managed, and you can place all these in your agreement. From the beginning, you can make a decision on how you would be spending together and what parts of your income can go to savings and to expenses for joint properties.
The Death of One Party
One of the important parts of such an agreement would be to discuss what is to be done in the event that one of you passes away. Whether you have children or not, there will be a lot of things to take care of, especially when you, your partner or both of you as a couple have a lot of assets, properties or even debts. You’d have to clearly define what is to be done so that no loose ends are left if one of you dies.
The Legality of Your Cohabitation Agreement
These kinds of Cohabitation agreement weren’t always legal but over the years, a lot of the states have come to accept them as such. It’s highly recommended for you and your partner to enter such an official agreement, for your own protection and peace of mind. Having such a document would ensure that no matter what happens, you know what the consequences are.
It’s not a Prenuptial Agreement
Though very similar, such an agreement is not the same as prenuptial agreements. The main difference is that this document is for those who are just planning to live together but are not planning to get married. It would also contain details on what is to be done during the relationship and what would happen when it ends.
As long as you cover these issues, you would already have a pretty good cohabitation agreement. However, you may add other concepts, sections or issues if you think they are relevant to your relationship. But such agreements aren’t always appropriate, it would depend on the situation, which will be discussed in the next section.
When are Cohabitation Agreement Appropriate to Use?
Filling up a cohabitation agreement form would mean that you and your partner are legally agreeing to the terms which are covered by it. Mainly they are used for security and protection of separate income and properties and it would aim to give you clarity during the relationship and when it comes to an end. However, these types of agreements aren’t appropriate for all kinds of situations. Usually, they are mutually entered into when and if:
• you see that your relationship is going to last for a long time;
• you, your partner or both of you have quite a lot of assets and properties as you are entering a relationship;
• you, your partner or both of you have a significant amount of debts as you are entering a relationship;
• you or your partner earns significantly more than the other;
• you, your partner or both of you are expecting to acquire some form of the property while you are in the relationship;
• you, your partner or both of you have a child as you enter the relationship;
• you are expecting to have a child within the first two years that you are living together; or
• you are expecting that spousal support might end up being an issue when your relationship comes to an end.
These are the situations when it would be very much appropriate to enter into such an agreement with your partner. Of course, there are also times when this agreement isn’t needed or isn’t appropriate so you won’t have to go all through the trouble. These situations are when or if: (Cohabitation Agreement)
• you and your partner are still young;
• neither of you has any significant assets or property when entering into the relationship;
• neither of you has any significant debts when entering into the relationship;
• neither of you has any children when entering the relationship and you are not expecting to have children in the first two years of your relationship;
• you and your party are both working and are expecting to continue with your careers;
Basically, these situations are wherein you and your partner are not very serious yet and are still starting to build your own lives. This is because these kinds of agreements are more useful and beneficial for setting rules for how things will be dealt with during the relationship. So it’s more appropriate for situations when the relationship is more serious and the couple is more established, meaning they may have their own property, assets, debts and such.
Legal Requirements that Come with Submitting a Cohabitation Agreement Form
While learning about what is a cohabitation agreement, you should also learn what other things you need to support it. It’s an official document which doesn’t only come on its own but would need other documents to support it. Here are some important tips and legal requirements to know about: (Cohabitation Agreement)
• First off, remember that your agreement must be in writing and not just orally stated.
• It should be signed by you and your partner and your should both sign it in the presence of a third party or a witness. Though still valid without one, it would still be a better idea to sign your agreement in the presence of a witness to make it a lot more valid.
• You or your partner should not have any legal disability when you are signing the agreement.
• It must clearly establish each party and the nature of their rights and their responsibilities to each other.
• You and your partner must enter into the agreement willingly. You should not be coerced or forced by the other party or by anyone else.
• You and your partner must make a complete disclosure of any and all circumstances when entering into such an agreement. This would include any assets, properties, debts or other relevant information.
• You and your partner should not make any agreement which would obligate you to break the law or do anything illegal.
• When your agreement is made by the lawyer of one party, the other may choose to have the information in it interpreted if anything is unclear.
• If any part of the agreement is discovered to be invalid, then only that part of the agreement will cease from being in effect. The rest of the agreement will still be valid and shall still be considered as such by you and your partner.
• Any issues regarding properties, assets, and debts will only be dealt with in the event that the relationship comes to an end. Then it should have already been written in the document what is to be done with the said issues.
• It would be better for you and your partner to hire a lawyer when you are planning to create and enter into a cohabitation agreement. This is so that everything in it would be official, legal and valid. If you still want to make it yourself, then you can consult with a lawyer after to check if your agreement is valid and can be considered as legal.
Do cohabiting couples have the same rights as married people?
Common law marriage is a myth. It does not matter how long two people have lived together as a couple – unless they marry or enter into a civil partnership, they do not have the same financial claims as a married couple or civil partners.
What happens to my pension?
Unmarried partners have no claim to their partner’s pension on cohabitation or separation other than in very exceptional circumstances. It is, however, possible for one party to name a cohabitant as a recipient of a death in service benefit.
How can I look after my children’s financial interests?
There are specific claims available to unmarried cohabitants with children. These are known as ‘Schedule 1’ claims because they are set out in Schedule 1 of the Children Act 1989. This provision allows one party to make financial claims against the other for the benefit of the children. While the available claims are not as wide as those on offer to married couples, they do enable applications for a lump sum payment for the benefit of the child as well as a transfer of property to ensure the child or children are housed for (and only for) their minority (until 18 / concluding secondary education). In addition to this, unmarried couples can make an application for child maintenance to Child Maintenance Options for ongoing maintenance.
It is common for former cohabitants with children to make a claim under TOLATA as well as Schedule 1.
As unmarried parents, will we both automatically have parental responsibility following the birth of our child?
The mother will automatically have parental responsibility for her child. In order for an unmarried father to obtain parental responsibility, he must either marry the mother, be named on the birth certificate when the birth is registered, or enter into a parental responsibility agreement with the mother. It is also possible to apply to the court for parental responsibility if the mother does not consent to a parental responsibility agreement.
Can my partner, who owns our house, make me leave the property?
It does not matter whether or not you own the home, you may still seek an occupation order excluding your partner from the property. It is essential to seek legal advice if you are experiencing domestic violence; the family courts are able to offer protection on an urgent basis.
What is a cohabitation agreement?
This is an agreement entered into by the cohabitants that sets out their intentions in relation to property and any other assets they own either jointly or individually and what should happen if the relationship breaks down. Cohabitation agreements are legally binding contracts, provided that they are drafted and executed properly, and are signed as a deed. It is therefore essential to obtain legal advice before preparing an agreement.
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