Living Together Agreements

If you’re a divorcee who’s found love with a new partner, you may be hesitant to walk down the aisle again but have got to a stage in your relationship where you are considering living together. You may know that the law doesn’t protect people who simply co-habit, and if things go wrong you may end up losing out. The best thing to do is to formalize your relationship by creating a living together agreement. If you haven’t yet moved in together, ensure you broach the subject before you do. That said, it is never too late to put an agreement in place, even if you have been living together for years.

Benefits of Living Together Agreements

Often, when a relationship ends one or both parties are too emotionally raw to negotiate on constructive terms. One person tends to leave the property, but if they haven’t formalized their relationship then there can be major issues over who owns what. This is especially true if you have bought any major investments together, like your home.

A living together agreement doesn’t have to be approached like a pre-nuptial agreement – it’s about how you will live together rather than what happens if and when you break up. It can help you both to understand what it is you expect of each other – who is responsible for what in terms of the home; who pays for what; and the practical elements of having a long-term relationship. If you do break up, it can help to avoid the emotional wrangling and bitterness that can ensue as you both try to separate your respective lives.

Is a Living Together Agreement Enforceable?

Much like pre-nuptial agreements, they are a bit of a grey area in the law. A binding agreement must be fair, and must not contravene any rights that either party would have under the law (e.g. a property in both names cannot simply be claimed by one party). If one party has not been truthful about their financial circumstances at the time the agreement is made, then the agreement is probably unenforceable.

What is the Court’s View of These Agreements?

As long as the agreement truly reflects the intention of both parties at the time the agreement was made, the courts are likely to take it into consideration in the event that you need to go to court at the end of your relationship. The courts are likely to take it into consideration as being the true intention of both parties at the time the agreement was made.

You can write your living together agreement yourself, but courts are more likely to enforce the terms of an agreement if both parties sought legal advice beforehand and a solicitor drew up a deed. Here is a useful checklist to ensure that you and your partner are discussing the right issues before you agree terms:

Checklist

Firstly, you both need to be honest with each other about your respective financial situations. What do you both earn currently? What debts do you have? What assets do you each own?What are your assets worth?

Your Home

You don’t need to have an exact value of property, so there’s no need to involve an estate agent unless you are very unsure, but if you can estimate the true market value of your home that should be sufficient. There are several websites on the internet that can help you to see what other similar properties in your area have sold for recently.

Whose home are you going to live in? Who will own this property? If the property is in one of your sole names, the other person needs to understand that this means that they do not legally have a share of it. If both of you are going to be on the title deeds, are you joint tenants or tenants in common? There is a significant difference between the two: tenants in common can own unequal shares if that is what you want and can leave their share of the property to someone else in their will (i.e. not your partner); whereas when one joint tenant dies, the property automatically passes to the survivor.

Your Outgoings and Expenses

Then you should write down all your individual income and outgoings, remembering to include credit card debts, HP or loan payments, and of course your mortgage.

Children

If either or both of you have children, do you have a Parental Responsibility Agreement in place? If not, now is a good time to arrange this with your solicitor. Who is going to support those children? Will it be both of you? Do you intend to have children with your current partner? If so, who is going to look after them? Will one of you give up working to do this?

Pensions

Can your partner benefit from your pension scheme? If not, do you want them to?

Bill Payments

Who is responsible for household bills? Are you going to open a joint bank account to facilitate joint bill payments? If so, how much will each of you pay into it every month? Can either of you sign to authorize payments or will the signature of one of you suffice?

Other Assets

In terms of your other assets, you should both make a list of the things you currently own. As a general rule, things you buy with your own money are yours; something you inherit belongs to you; gifts to you are yours; things bought with joint money are yours jointly, but if one of you pays more than the other then the ownership will be apportioned accordingly.