Cohabitation agreements can provide certainty during uncertain times.

Lord Wilson of Culworth, one of the 11 justices of the UK’s highest court, has called for the law to be changed to give long-term cohabiting couples the same rights as married couples.

Lord Wilson’s comments follow the Court of Appeal’s rejection of a claim by a heterosexual couple in England to be allowed the enter into a civil partnership and acquire rights similar to married couples.

Civil partnerships are currently only available to same sex couples.

The Rise of Cohabitation

In the UK, marriage has been on the decline since 1972. Between 1996 and 2012 the number of unmarried couples living together doubled.

Couples choose not to get married for a variety of reasons.

Some see marriage as has having religious or other connotations.

Others do not want to have the same rights and obligations as married couples when it comes to property division.

Yet others (more than 50% of people according to the 2006 British Social Attitudes Survey) mistakenly believe that simply by living together for a period of time they acquire the same rights as if they were married.

In British Columbia, Canada, the definition of “spouse” was amended in 2013 to include anyone who “has lived with another person in a marriage-like relationship for a continuous period of at least 2 years”, giving cohabiting couples or “common law spouses” the same rights to property division as married couples.

This change prompted an influx of inquiries to law firms about how cohabiting couples could opt out of this new matrimonial property regime.

The answer?

To enter into a cohabitation agreement, which would provide how the property would be divided in the event the relationship breaks down.

With more people choosing to live together, either before marriage or instead of it, cohabitation agreements are on the rise.

Cohabitants’ Rights Absent an Agreement

Without a cohabitation agreement, there is a presumption of equal ownership of household goods and any money used for housekeeping matters.

While the presumption of equal ownership relating to household goods can be challenged by evidence to the contrary, this may be more difficult with a housekeeping allowance.

When it comes to real estate, a cohabitant who has contributed to the down payment or mortgage will not automatically acquire any rights in the property owned by their former partner unless their name appears on title.

Even then, joint ownership may not reflect the contributions made by each to the purchase of the property.

In that case, a cohabitant would be forced to go to court for an order recognising the contribution they made.

However, in order to be successful, the cohabitant will have to show that their former partner was “enriched” by the contribution without any justification.

The same principles apply to bank accounts.

Benefits of Cohabitation Agreements

In Scotland, cohabitation agreements have lots to offer. The benefits include:

1. Certainty: know upfront how property and debts will be divided in the event your relationship (and in all likelihood your ability to communicate) breaks down.

2. Speed and cost-effectiveness: avoid the lengthy timeframes and significantly higher costs associated with resolving matters following separation, whether by means of negotiation, mediation or litigation.

3. Choice: whether it is agreeing that each person will keep the property they brought into the relationship, protecting family inheritances or deciding who will keep the family pet, the options are endless.

People often justify not entering into a cohabitation or prenuptial agreement on the basis that discussing it with their partner will be “awkward”. A cohabitation agreement is like an insurance policy – you hope never to have to use it, but it is there to protect you and your assets should the need arise.