Spare a thought for the cohabitation contract. 

In this blog, James Pirrie, Director, considers whether you should enter into a cohabitation contract/agreement to regulate your financial arrangements until you are able to get married. 

The Covid-19 pandemic has given rise to so many victims and lost opportunities. And many of us will know of couples who have had to put their carefully crafted wedding plans on ice until larger gatherings are able to take place once more. The Justice Secretary, Robert Buckland, said this week that he was giving a “lot of anxious consideration to the effect of the potential changes here as to what we can do with regard to marriage ceremonies…”

Of course a marriage doesn’t need a hundred or more guests to be legal. Following Buckland’s statement it is reasonable to think that simple weddings may soon be permitted again. But while we wait for a change in the rules, what can be done to make sure that you are protected if you are living together?

By way of background, The Marriage Foundation carried out an analysis of 25,000 relationships of adults who started cohabiting between 1980 and 1990.  Looking at the outcomes of their relationship up to the year 2000. They were able to conclude that:

• the longer a couple lived together, the lower the likelihood became of them getting married in the future.
• 5 out of 10 couples who had lived together for up to a year went on to marry, compared to 3 out of 10 couples who had lived together for 10 years.

One can imagine that many of those who had plans for a wedding may find that not only is the big day having to be abandoned (rather than postponed) but that the funds set aside for the event need to be used to see the couple through the financial challenges that so many are facing.

The combination of these factors may see more and more couples drifting into a state of unregulated cohabitation and perhaps never-married parenthood. It is worth, however, being fully aware of the limited rights that couples who live together have under the law today:

• Often one party will find themselves with no claims on the family home.
• Assets built up by one party (even if on the back of the partnership of the relationship) will usually be retained by the person in whose name the assets are held.
• Child maintenance is a fixed formula that – even when it works well – may not work fairly. And depending on the complexity of the financial arrangements, the CMS calculations may give rise to particular challenges for the financially dependent party.
• Maintenance as a common law spouse doesn’t exist – so earning capacity that has withered away through child-care arrangements will not be supported through ongoing financial support from the partner whose career may have flourished.
• Pensions will not be shared.

It may be worth thinking about signing a cohabitation contract where these financial issues can be planned and regulated. It is not as flexible a scheme as marriage and it is certainly not as much fun as a big day, but the unregulated arrangement of living together without the safety net of a cohabitation contract can be seriously no fun at all. Further information on the rights of couples who live together can be found here.

If your wedding is on hold and you had also planned to enter into a Pre-Nuptial Agreement, read the blog by our Senior Associate Mariko Wilson on whether you should press ahead with negotiating your Pre Nup.

James Pirrie is a director at Family Law in Partnership. James specialises in complex financial issues and non-adversarial and cost-effective approaches to divorce and separation including mediation, arbitration and collaborative law. He helps clients take control of the issues that affect them, clarifying priorities, exploring all the options and identifying the best way forward. Contact James or any of our top London divorce and family lawyers at E: hello@flip.co.uk or T: 020 7420 5000