Do I Need A Cohabitation Agreement?
As specialist family law solicitors, we get to deal with the fallout when a cohabiting couple separates and can't reach an agreement over whether their family home should be sold, or how the equity should be split, or whether the house should be transferred to one of them.
Court proceedings over property ownership can be protracted and expensive as the court assesses property and trust rights. Potentially your family law solicitors have to go back years to gather evidence on who paid the deposit, mortgage, or contributed to the house renovation costs. This hassle and cost may be avoided if you sign a cohabitation agreement.
For help from expert family lawyers call our team of specialist family lawyers or complete our online enquiry form.
When do you need a cohabitation agreement?
Most people think you only need a cohabitation agreement if you are buying a family home with a partner. That’s not the case. You need a cohabitation agreement in a range of different circumstances, such as:
Buying a house in your sole name but your partner intends to live with you at your house
You own a house and your partner is moving in with you
You jointly own a house with your partner but your personal or financial circumstances are changing. For example, you have inherited some money and intend to pay the mortgage off with your inheritance
You are going to jointly buy a property with your partner and you are contributing different amounts of money towards the deposit, or one of you is getting money from family to pay the deposit, or one of you will be paying all or a larger percentage of the mortgage and household bills
There are many other reasons why a couple may need a cohabitation agreement. That is why, if you are thinking of buying a property or you have formed a new relationship, it is sensible to ask the question ‘do I need a cohabitation agreement?’ and to get the question answered by an expert family solicitor.
You may think that a family solicitor is trying to sell you something that you don’t really need as most people don’t realise (until it is too late) that if your partner moves into your house, they have a potential claim over the property under property or trust law even though their name is not on the title deeds. Equally, if you have been in an unmarried relationship for many years, you may have no rights to a share in the equity in your partner’s property because of the complexities of property and trust law.
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What goes into a cohabitation agreement?
A cohabitation agreement can be as broad or as detailed as you chose. If a partner is moving into your house your agreement could say that your partner will not have a beneficial interest in your property even if they contribute to the mortgage or renovation costs unless you sign another cohabitation agreement setting out their interest in your property. That type of cohabitation agreement minimises the risk of your partner claiming they have a beneficial interest in the property because you took money off them as rent and payment towards household bills but, after you split up, your ex alleges their monthly contribution paid towards the mortgage so they have a claim over the equity in the property.
If you are buying a property jointly with your unmarried partner then your cohabitation agreement could record the detail of who paid the deposit, how the mortgage payments will be split, and other details, so you avoid having to get information and paperwork many years later to prove you paid the majority of the deposit and mortgage or to try and prove that it was agreed that you would get 70% of the equity because it was your inheritance from your grandmother that enabled you to pay the deposit and stamp duty.
It pays for an expert family solicitor to talk to you about your options and to prepare a bespoke cohabitation agreement for you. Most people assume that a cohabitation agreement has to be a standard document but it can be created to meet your relationship and property needs and be as straightforward or as complicated as you want to make it.
Can a cohabitation agreement be changed?
Some couples are reluctant to sign a cohabitation agreement because they think that circumstances may change. For example, if your partner is moving into your house the initial intention may be that the house will remain yours but that may change over time if you want to renovate or extend the property. Alternatively, once your relationship is established you may want your partner to share the mortgage payments with you, whilst still wanting to protect the equity that you built up in the property before your partner moved in with you.
Cohabitation agreements can be changed as your relationship develops or circumstances change but it is essential to record your revised agreement in a new document. That’s because most cohabitation agreements say any verbal promises or assurances will not carry any weight and any changes to your original agreement must be in a deed. A signed agreement avoids expensive court proceedings over whether conversations occurred, whether you really intended to give your partner an increased beneficial or property interest, or whether your partner misinterpreted your conversation or twisted it to their advantage.
If I don’t sign a cohabitation agreement, is the jointly owned house half mine?
The house isn’t necessarily half yours if you don’t sign a cohabitation agreement. It all depends on how the house was legally purchased (was the family home bought as joint tenants or tenants in common) and what your intentions were. Not having a cohabitation agreement can result in expensive court proceedings if one partner decides they want to claim half the house when they didn’t pay half towards the deposit or if one partner wants more than half the equity in the family home because they paid for the extension or for the new bathroom. A cohabitation agreement will cover who gets what percentage of equity in the house if it has to be sold. A bespoke agreement can also cater for one partner paying for renovations or paying off the mortgage.
Key points on a cohabitation agreement
Even if a house, investment, or business asset is owned by one partner, the other party to the relationship can still make a property or financial claim based on verbal or written promises, trust, and property law. The cost, risks, and inherent uncertainty of court litigation can be avoided, or significantly reduced, by a cohabitation agreement.
For help from expert family lawyers call our team of specialist family lawyers or complete our online enquiry form.
Robin Charrot
Jan 12, 2023
What is a Postnuptial Agreement?
You may have heard of prenuptial agreements but not everyone is aware that you can sign a document that is similar in nature to a prenuptial agreement but completed after your marriage. It is called a postnuptial agreement.
A postnuptial agreement is entered into by a couple who are married or in a civil partnership and who want to record how their assets will be shared (or a specific asset, such as the family farm or business, will be ringfenced) in the event of their separation or divorce.
In this article, family law solicitor, Robin Charrot, answers your questions on what a postnuptial agreement is and whether they work.
For expert advice on prenuptial and postnuptial agreements call our team of specialist divorce lawyers or complete our online enquiry form.
When do you get a postnuptial agreement?
A postnuptial agreement is not limited to those who ran out of time to negotiate and sign a prenuptial agreement before their marriage or civil partnership. You can sign a postnuptial agreement whether you have been married a day, a year, or 31 years. It is therefore never too late to get family law legal advice about a postnuptial agreement.
It is a common fallacy that your husband or wife will only ask about a postnuptial agreement if they believe the marriage is in trouble. That is not true. Many happily married couples ask about postnuptial agreements, often triggered by a friend’s highly acrimonious divorce and a desire to avoid that type of dispute or because a life event has made them appreciate that a postnuptial agreement is just like precautionary insurance; sensible planning and a useful document to have.
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Should I sign a postnuptial agreement?
There are many reasons why you may consider discussing a postnuptial agreement with your husband, wife, or civil partner. Their initial response may be bemusement as many assume that postnuptial agreements are only signed by Londoners or those who mix in ultra-high net worth international jet-setting circles. If you do not have a yacht or a holiday home in the Caribbean you may think that a postnuptial agreement is out of your league.
As specialist family law solicitors based in Cheshire and North Manchester, we have seen a rise in inquiries about postnuptial agreements from across the Northwest of England. They help protect family wealth and minimise the emotional and legal costs of sorting out a divorce financial settlement dispute at the time of a separation or divorce.
The rise in popularity of the postnuptial agreement is a natural progression from the increased take up of prenuptial agreements.
Triggers for considering a postnuptial agreement include:
An increase in marriages with non-British nationals and the acceptance of postnuptial agreements in some overseas countries as a usual step in marital planning
The number of couples getting married later in life and acknowledging the need to take ongoing sophisticated legal advice given the extent of their assets and their desire to protect some of their wealth for children from earlier relationships
Business owners wanting to protect business assets from the impact of a separation or divorce as without an agreement in place the court could be asked to order the sale of a business or shares
The trustees of a discretionary trust wanting to make capital or income distributions to a beneficiary of the trust fund and raising the advisability of a postnuptial agreement to protect trust distributions
The older generation who wants to start lifetime gifting to a son or daughter, having been advised of the inheritance tax advantages of estate planning by their private client lawyers or financial advisors, but who are wary of making substantial lifetime gifts unless they can be reasonably confident that their family money will not be given to their son in law or daughter in law in any divorce settlement
Couples who entered into a prenuptial agreement and a change in life circumstances results in a need to change the terms of their prenuptial agreement
Couples who contemplated divorce proceedings but decided to make a go of their marriage and, after having had some experience of the divorce financial settlement process, want to put a postnuptial agreement in place so that if they do end up splitting up there is less chance of costly and fraught divorce financial settlement court proceedings to split the assets
Relocation to the UK or to another country and given the difference in divorce laws a recognition of the benefits of a postnuptial agreement setting out the jurisdiction for any future divorce as well as the split of money and other assets
Divorce solicitors are confident that in the future prenuptial agreements and postnuptial agreements will be seen as an essential part of life planning, in much the same way as taking out life insurance, signing a Will, finalising a Lasting Power of Attorney, or carrying out a regular investment portfolio review with a financial advisor.
Thinking about a postnuptial agreement
If you are thinking about a postnuptial agreement, it is best to be aware that there must be:
An agreement with your husband or wife. There can be no element of duress or coercion
Disclosure of current relevant financial and other circumstances
Specialist legal advice taken by both husband and wife on their postnuptial agreement
If all those elements are properly ticked off and the agreement provides a fair split of the family assets the postnuptial agreement should be upheld by a divorce court in any subsequent divorce financial settlement proceedings.
Postnuptial agreements are individual to the couple and no agreement will be the same. That is why it is so important to get expert postnuptial agreement legal advice, whatever the reasons behind why you are contemplating a postnuptial agreement.
For expert advice on prenuptial and postnuptial agreements call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Dec 07, 2022
International Family Law and Prenuptial Agreements
It is trite to say that the world is getting smaller but when it comes to family law, it is true as there is an increasing number of UK families with connections to more than one country. That has led to a rise in the number of requests for help from families with international family law concerns or requiring advice on an international prenuptial agreement.
For expert family law advice call our team of specialist family lawyers or complete our online enquiry form.
International prenuptial agreements
As specialist family law solicitors with many years of experience in preparing prenups and postnuptial agreements, we have seen an increase in inquiries about nuptial agreements with an international element, not just from couples who are based in Manchester and the North of England, but also from couples who are based in London and the South East of England wanting expert advice at a competitive cost. That increase in inquiries is down to the following trends:
The number of UK residents meeting and marrying partners from other countries
The number of couples who own assets overseas such as a holiday home or a business based abroad
Couples who are UK based but whose families or family assets are based abroad; normally their families are passing some of their wealth to the marrying couple (to give them a financial head-start, or for tax planning reasons) but the families realise that this wealth is vulnerable to divorce without a prenup in place
The number of people who are a beneficiary of an offshore trust
The number of overseas families who have settled in the UK but already have a prenup in their country of origin or in the country where they hold assets
The law on international prenuptial agreements
Although the world is getting smaller divorce law has not been globalised. Divorce laws, practices, and procedures vary widely from country to country. The unwary can therefore falsely assume that having signed a prenup agreement in country A that their agreement will be binding in their spouse’s country of origin B, or if they decide to emigrate to country C.
Whenever the prenuptial agreement solicitors at Evolve Family Law are asked to prepare a prenup it is important to ask the right initial questions. For international prenups the questions should include:
Country of domicile for both parties to the marriage. This can be different from the country the engaged couple lives in as it is a complex legal concept
Countries where any existing assets and property are located
Countries where any future assets and property are likely to be located
The country or countries that one or both of the couple may relocate to in the future, for example, the plan may be to spend a lot of time in the Florida holiday home
To add to the complexities of advising on prenuptial agreements it is important to remember that Scotland, Ireland, the Isle of Man, and the Channel Islands all count as separate countries.
If the answers to any of these questions reveal a foreign connection, it is really important to work out which country the prenup should be based in. For quite a few prenuptial agreements the answer is not England.
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Getting international prenuptial agreements right
Family lawyers should not be wedded to their own jurisdiction and assume that a prenuptial agreement should be prepared in England as that is not necessarily the best decision for a client. It can make a massive difference to how assets are divided if a couple split up without having either signed a prenuptial agreement or if they did not get an agreement prepared in the country that best suits their international links and circumstances. That’s because in some countries prenup agreements are treated as legally binding and in others they ‘are not worth the paper they are written on’.
Even if England is the right country for the prenuptial agreement to be prepared in, it is important to think about whether a ‘mirror’ prenup agreement is needed in the other countries the couple are linked to, or at least having a specialist family lawyer in that other country having some input on the wording of the prenup, so that the agreement is executed in accordance with the relevant local law and the agreed country for choice of jurisdiction is recognised.
Is an international prenuptial agreement worth signing?
With or without international aspects, our family law solicitors are asked if it is worth signing a prenuptial agreement. Invariably the answer is that a prenup is a sensible piece of relationship planning: No one who is getting married thinks their marriage will fail, but almost half do. It is also really helpful for the couple to think properly about their future financial security if things do go wrong. Also, the English divorce courts now rarely go against a prenup that has been put together in the right way.
Preparing a prenup includes an element of speculation as who knows what may happen in relation to the couple’s future life together. However, it is normally possible to build in enough flexibility to deal with life changes. If life takes an unexpected course, such as a return to the UK after a marriage abroad with a foreign prenup, it is as well to dust off the document and get some advice on whether it remains fit for purpose.
For expert family law advice call our team of specialist family lawyers or complete our online enquiry form.
Robin Charrot
Nov 09, 2022
Look North West for Your Divorce, Family Law and Private Client Needs
As divorce and family law solicitors based in Holmes Chapel, Cheshire and Whitefield, North Manchester, the latest research from the Legal Services Board was of particular interest to the Evolve Family Law divorce team. At Evolve Family Law we have long thought that ‘‘North is best’’ and the official research seems to agree with us. In this blog we look at the latest Legal Services Board research findings and what they mean for those of you needing divorce, family law or private client help.
Divorce and family law fees
Research published by the UK Legal Services Board on the cost of divorce and Wills has confirmed what many Manchester and Cheshire solicitors thought, namely that legal advice is generally twenty percent cheaper in the north of England compared to legal fees in the south of England. The official research has revealed that divorce firms based in London are on average a third more expensive than those based outside London.
Manchester divorce solicitors say that the Legal Services Board research has confirmed that there really is a north-south divide when it comes to legal fees. Some may question the quality of what you get ‘’up north’’ or think that the mantra that ‘’you get what you pay for’’ must be right but the Legal Services Board research does not indicate that there is any difference in the quality of the family law legal advice that you receive depending on the location or postcode of your divorce and family law solicitor.
Divorce and fixed fees
It is always hard to judge if you are getting value for money with a fixed fee divorce or family law or Will package. However, the Legal Services Board research reveals that divorce law firms who offer fixed prices are on average over a third cheaper than those law firms where estimates of costs are given.
At Evolve Family Law we are committed to transparency on costs and providing as much information online about our fixed fees and pricing. Our cost guide can be accessed here. We also welcome calls to discuss potential legal fees.
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Should I shop around for a divorce solicitor?
The Legal Services Board advises that those with a legal problem shop around and check out potential legal fees. According to the LSB only a fifth of those needing legal advice currently look around and check out fees before committing to instructing a solicitor.
The chair of the Legal Services Board, Dr Helen Phillips has stated:
‘‘Whether buying a home, getting divorced, or making a will, we encourage people to shop around to find a good value deal that meets their needs. Unless they shop around, people risk paying far more than they need to. Where people don’t feel they need to deal with a lawyer face to face, they could make considerable savings by using providers in parts of the country where prices are cheaper.’’
The legal advice price research was commissioned jointly by the Legal Services Board, the Competition and Markets Authority and the Ministry of Justice. The research involved interviewing 1,500 legal businesses in England and Wales and included a spread of legal firms across different types of legal provider and in different locations across the country.
Is a good divorce solicitor all about price?
At Evolve Family Law, whilst we believe in transparency on legal costs and fixed fees, we also recognise that choosing a divorce solicitor or a Will or probate solicitor isn’t just about the legal fees. You need to be able to feel confident that your solicitor will listen to you and will offer you the guidance you need so you can make informed choices, whether that is about a child arrangements order application for your children or a divorce financial settlement.
Evolve Family Law recommend that in addition to looking at online information about price structures that you speak to a solicitor to make sure that you can form a trusting relationship and work together. Don’t worry about distances as divorce, Will and probate solicitors offer appointments by video conferencing, Skype or by telephone appointment. Most family law clients say that speaking to their chosen divorce solicitor in the comfort of their home is more relaxing, and according to the latest Legal Services Board research, it could also result in you achieving considerable savings in legal fees.
How can Evolve Family Law solicitors help you?
For legal help with any aspect of family or private client law, from divorce and separation advice to child arrangements order applications or representation in financial settlement and financial court order proceedings, negotiating a prenuptial agreement or the preparation of your Will or Lasting Power of Attorney call Evolve Family Law or complete our online enquiry form to set up a meeting, video conference or telephone appointment.
Robin Charrot
Sep 28, 2020
What Happens If You Sign a Prenup & Your Husband Dies?
Every fiancée (or rather their family solicitor) should ask the question, “What happens if you sign a prenuptial agreement and your husband dies?’’ before a prenuptial agreement is signed. This is because although prenuptial agreements record how assets will be divided should a couple separate or divorce, the agreement can also set out how much a spouse will receive if their husband or wife dies. The prenuptial agreement could state that a spouse cannot make a claim against the estate if the will is consistent with the terms of the prenuptial agreement.
Many people query the point of putting in details of what a husband or wife will receive following their spouse's death, in the prenuptial agreement. After all, prenuptial agreements are about separation or divorce and wills are for death and estate planning. However, as Manchester divorce solicitors we normally say that it is a good idea to detail what provision will be made available to a spouse in the event of a death. This is especially the case where there are children from earlier relationships to consider or where a spouse does not plan to leave their entire estate to their husband or wife.
The Case of Mrs Hendry
The widely reported case of Mrs Hendry is an excellent example of why it is important to have a prenuptial agreement and how it can assist if there is a claim against the estate.
Mrs Hendry came from the Philippines to marry her husband. Mr Hendry already had two adult children from a prior relationship, the youngest of whom was twenty-one at the date of Mr Hendry’s death.
The marriage between Mr and Mrs Hendry did not last. Mrs Hendry filed for divorce and asked the family court to give her half of Mr Hendry’s assets. Mr Hendry died before the family court decided how the money should be divided.
Mr Hendry’s will left his estate to his children and Mrs Hendry was left a small pension. Negotiations started between Mrs Hendry and the two children. Mrs Hendry wanted half the estate of her late husband. The children initially offered her what she would have got under the couple’s signed prenuptial agreement. They later offered her a third of the estate.
Agreement could not be reached between the widow and children, resulting in Mrs Hendry making a claim against the estate. Mrs Hendry asked the court to make ‘’reasonable provision’’ for her from the estate under the Inheritance (Provision for Family and Dependants) Act 1975. The judge rejected the claim because Mrs Hendry had not made the application within the six-month deadline from the date of grant of Probate.
What makes the case interesting to Manchester divorce solicitors and lawyers advising on wills and claims against estates is that Mr and Mrs Hendry signed a prenuptial agreement prior to the marriage. The prenuptial agreement said, in the event of a divorce, Mrs Hendry would get a payment of £10,000 and a one-way ticket back to the Philippines.
It is not clear from the media court case reports what, if anything, the prenuptial agreement said about what would happen if Mr Hendry predeceased Mrs Hendry. However, the judge dealing with the estate claim commented on the fact that the prenuptial agreement only made limited financial provision for her.
In the case of Mrs Hendry, she was time barred from making a claim under the Inheritance (Provision for Family and Dependants) Act 1975. However, if she had not been time barred, the fact that she had signed a prenuptial agreement and was separated from Mr Hendry at the time of his death would have been weighed up, together with the circumstances surrounding the signing of the prenuptial agreement and the needs of Mr Hendry’s children.
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What can we learn from the case of Mr and Mrs Hendry?
There are some simple lessons we can take from this particular case:
The importance of signing a prenuptial agreement, and preferably detailing what provision should be made on both divorce and death for a spouse (the estate provision is normally more generous if the couple are living together at the time of the spouse’s death);
The need to review wills after a separation or divorce and, if necessary, amend them and/or provide a letter of explanation for testamentary bequests;
The importance of complying with deadlines if you want to make a claim against an estate and the benefits of taking specialist legal advice.
For help with prenuptial agreements and financial settlements on divorce or claims against estates please contact us
Louise Halford
Jul 26, 2019
Protecting Money From Parents to Buy a House
According to the BBC news a couple of days ago, the number of first-time buyers relying on mum and dad for the deposit to buy their first home or to climb the property ladder has reached a record high https://www.bbc.co.uk/news/business-39381157 This is not surprising, given that house prices are, on average, seven times salary. The problem is a lot worse in London and the home counties.
As a specialist family finance solicitor, with many years experience in dealing with divorce and cohabitation breakdown, I have seen plenty of examples of where parents have helped their son or daughter to buy a property, only to find that when their son or daughter’s relationship breaks down, half or even more of that money goes to their ex.
Why is mum and dad’s money vulnerable? Many people assume that just because the money has come from their family, or just because the house is bought in their son or daughter’s sole name, the money is protected. This is not true. Partners and spouses can make financial claims over property, even if their name is not on the title deeds and even if they have not paid the mortgage or the bills. Marriage makes the family money even more vulnerable because normally the divorce court will completely ignore the source of funds used to buy the house.
Many people assume that just because the money has come from their family, or just because the house is bought in their son or daughter’s sole name, the money is protected. This is not true. Partners and spouses can make financial claims over property, even if their name is not on the title deeds and even if they have not paid the mortgage or the bills. Marriage makes the family money even more vulnerable because normally the divorce court will completely ignore the source of funds used to buy the house.
Increasingly, I am being asked by clients how they can protect the parents’ money from relationship breakdown. There are a large number of ways of doing it, and they each have their pros and cons. However, the key message is that whatever way you choose, it needs to be agreed and properly documented at the time the money is provided by mum and dad.
The different ways of protecting mum and dad’s money
A loan from mum and dad
Mum and dad co-owning the house
A gift of the deposit
Putting the gift of money into a ‘trust’. The trust can then lend, or give money to the beneficiary of the trust fund to buy the house, or even co-own the house with the beneficiary
Mum and dad own the house completely, but let their son or daughter occupy the house
The best option will depend on the family’s circumstances. That is why it is important to get specialist advice. For example, if parents are wealthy and know that they have a lot of capital that they won’t get through in their lifetimes the option of a gift or trust fund might be the best way to help the family member get on the property ladder and save on inheritance tax. A record of the gift will help evidence it for the tax man and will also help if the son or daughter later starts to live with a partner at the property.
If a family is not wealthy then a loan agreement may be the best way forward. The key to a family loan is that it can be prepared to meet the family’s needs over when the money is paid back and if the loan will charge interest or not.
You need a cohabitation agreement (or a pre-nup)
Whatever option you choose, it is highly advisable to have a cohabitation agreement (or a pre-nup, if son or daughter are definitely going to get married) before the property is bought, which explains what will happen to the house and the money if the relationship does not work.
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A cohabitation agreement or pre-nup are absolutely essential if mum and dad are going to gift the money to their son or daughter because it is not being protected in any other way (e.g. a loan or co-ownership).
If you ask most parents whether they need a written agreement over giving or lending money within the family they say that raising the topic would make them feel uncomfortable. My own view is that it is the parents’ money, it is perfectly reasonable for them to want that money to stay in the family, and it is therefore perfectly reasonable for the condition of that help to be a cohabitation agreement or a pre-nup.
Cohabitation agreements and pre-nups are flexible and bespoke to the couple entering into the agreement. The agreement could say that the non-owning partner won’t have any claims at all on the property or it could say how the joint owners will share the equity in the house if they split up. For example, the agreement could say that mum and dad will be paid back their loan first, with interest, or that the partner whose parent’s provided the deposit will get a bigger percentage of the equity. The important point is that if the options on how to give or lend the deposit are explored and the options of how the couple will own a house are carefully considered and recorded there is far less chance of the family falling out with their son or daughter or their in-laws.
Contact us
If you would like to ask any questions about pre-nup or cohabitation agreements, please contact us. and take a look at our prices online.
Robin Charrot
Mar 30, 2017
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