Phil Barnsley is a Partner and Head of Family with West Midlands law firm Higgs & Sons.
Here he tells the MailOnline Property Clinic what should be included in a cohabitation agreement – some obvious, some a bit more quirky.
- Property – probably the most important element. However cohabitants are going to own property, they need to be precise and specific about this, as well as financial contributions and a mechanism for dealing with this upon separation (i.e. Agreed valuation method, then one has first option to buy the other out for 14 days, then the other has the same option and then sale etc.). It may also be sensible to put a Declaration of Trust into place to define shares or protect investment into property by parents or other family members.
- Future major purchases – it is helpful to define how these may be paid for, and split, either by contribution or by agreeing not to purchase jointly.
- Businesses – if the cohabitants own a business together, this needs to be sorted out. Often a Shareholders Agreement is a sensible adjunct in such circumstances.
- Debts – these can be controversial and setting out responsibilities and roles is helpful.
- Bank accounts – fewer cohabitants have joint bank accounts these days, but sorting out who will pay for what is sensible. Sorting out who will transfer joint accounts to the other and what happens to the direct debits can make things easier on separation.
- Cars – cohabitants will often share a car, especially in London and other major cities, so dealing with ownership, loans and repayments is important.
- Interim arrangements – any period between separation and sale/transfer of a property can be very difficult for parties to resolve. Setting out those transitional arrangements in an agreement can save an awful lot of emotional strain in the event of separation. Dealing with who will remain in the property and who will contribute towards what is very sensible.
- Children – I am not a huge fan of dealing with child arrangements in a Cohabitation Agreement, as often the parties do not have children upon entering cohabitation. However, agreeing the spirit of arrangements or agreeing to enter into a Parenting Agreement in the event that children come along is positive.
- Terminating events – it is useful to cover off not only what events will terminate the agreement, but the parties will then do. Entering into a separation agreement or pre-nuptial agreement is often a next step that can be agreed here.
- Review – it can be helpful to agree to vary the terms of an agreement after the passage of time, or more importantly, in the event of a major change occurring such as the birth of a child or receipt of inheritance etc.
In more recent times, there have been some interesting developments in things that we have seen going into Cohabitation Agreements that are proving to be interesting and engaging for clients, such as:
- Infidelity – these kinds of clauses have been around for a while, but there can be many different interpretations of what people define as infidelity and this can cause problems for cohabitants with different expectations of each other
- Pet clauses – as a nation of animal lovers it is no surprise that cohabitants can fall out over who keeps the family pet in the event of a separation.
- Social media – who says what, to who and when is more important today than ever before. Restricting the use of, what contents should and should not be there and what people say about each other in the event of a separation is becoming increasingly popular.
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