This blog post outlines some of the options that can be considered when it comes to cohabitation and protecting your assets.

What is cohabitation?

Cohabitation is “a living arrangement in which an unmarried couple lives together in a long-term relationship that resembles a marriage.”1 Cohabiting couples are the fastest growing family type in the United Kingdom, with the number more than doubling over the last twenty years to 3.3 million families.2 With this in mind, it is even more important to bring clarity to the situation of each party’s assets. The law in relation to cohabiting couples is not clear-cut, as it is a combination of case law and archaic legislation. However, there are a number of ways to bring certainty and transparency to the situation that would avoid lengthy litigation.


It is important for couples to understand the way in which they own the property. This can either be as joint tenants or tenants-in-common. Joint tenants are equally entitled to the whole of the property and a key feature is a right of survivorship - namely that upon death of one of the co-owners, their share passes to the surviving co-owner by law. This differs to tenants-in-common who have a distinct beneficial share in the property, in expressed proportions and are not entitled to the right of survivorship.

A declaration of trust

A declaration of trust can be used to confirm the respective beneficial interests of both parties. A trust can also set out any express terms that the parties wish to include. This could relate to practical arrangements such as maintenance or other expenses. The case of Stack v Dowden [2017] is still the form of authority in support of express trusts, as the leading judgment noted "an express declaration of trust is conclusive unless varied by subsequent agreement or affected by proprietary estoppel".3 The key case of Kernott v Jones [2011] also warns against being in a situation of no express trust.4 This case found that a presumption of co-ownership can be displaced if it can be shown that the parties had a different common intention, or if a common intention was later formed. Another key point from this case is that intention can be deduced from conduct. The emphasis should therefore be on being proactive and taking steps to protect, as it is the Court’s inferences that we should be looking to protect assets from.

Another option would be to enter into a living together agreement. This type of agreement would record each party's rights and responsibilities in relation to the property where they live and the financial arrangements between them. They serve as an effective way of preserving assets, safeguarding financial security, ease difficulties encountered upon separation and potentially protecting future inheritance for their children.

A properly thought out and well advised living together agreement can prevent the type of situation that occurred in the Insol Funding Company Ltd v Cowlam [2017], which emphasised the pitfalls of not taking legal advice before purchasing a property.5 By documenting each individual’s rights and responsibilities there is a clear pattern of conduct that will be pivotal if the court ever needed to become involved.

The rights and responsibilities in relation to assets such as property may not be limited to the parties themselves. In a climate of rising house prices, ‘Generation Rent’ and minimal wage growth, the ‘Bank of Mum and Dad’ rivals the ninth biggest mortgage lender in the UK in terms of money gifted or lent to family members.6 This amount is estimated to be £6.5billion in the next year and raises more questions about protection.7

If nothing is put into place, money provided from family will be deemed a gift and part of the total 'pot' of assets. However, if money lent or gifted is wrapped up in a loan agreement there are greater protections for all parties involved in the transaction. The money will therefore be designated as a loan to an individual and kept separate from the total pot of assets. In the same way as a living together agreement this type of protection brings clarity to the situation, should anything happen in the future.

Remember to protect your assets!

The Insol case also highlighted the need to take appropriate steps to protect assets such as property when parties are cohabiting. The protection of assets is something that is often overlooked, but cases like this demonstrate the importance of having clarity and certainty about an individual’s rights and responsibilities. This reduces the scope for argument and prevents further litigation. Protection is the key to a financially secure and prosperous future.

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  3. Stack v Dowden [2007] UKHL 17
  4. Kernott v Jones [2011] UKSC 53
  5. Trusts and Cohabitation - Clarifying Contribution, Trust and Estates Law & Tax Journal