Cohabitation contracts

A cohabitation contract or agreement enables partners who (plan to) live together but are not married or civil partners to regulate their affairs. In the past, cohabitation contracts were held to be void for reasons of public policy. The law recognises that many couples cohabit outside marriage or civil partnership. Such a contract is the best evidence of what was intended by the parties in the event of a subsequent breakdown in the relationship. Former cohabitants may also wish to enter into a separation agreement to regulate the terms of their separation. Cohabitants do not have the same rights to make property claims as married couples or civil partners, therefore disputes between cohabitants regarding their beneficial interests are determined in accordance with the law of trusts. While a cohabitant may not claim maintenance for themselves personally, as a spouse or civil partner may, where the parties have children together, financial provision for any children may be agreed, dealt with under the statutory scheme or in certain cases by an application under Schedule 1 to the Children Act 1989 (ChA 1989).

Terms and drafting

Drafting an agreement demands

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Monumental Supreme Court decision on matrimonialisation and sharing principle (Standish v Standish)

Family analysis: The Supreme Court’s much-anticipated judgment confirms unequivocally that the sharing principle does not apply to non-matrimonial property. Sharing of matrimonial property will usually be 50:50, though there may be a departure from equal division where justified. Non-matrimonial property typically has either a pre-marital origin, or, where it is received during the currency of the marriage, an external source (eg an inheritance). Title to an asset is expressly not determinative as to whether that asset is or is not matrimonial. Though non-matrimonial property may become matrimonial (ie ‘matrimonialisation’) this will depend on how the parties have been dealing with the asset and whether, over time, they have been treating that asset as shared between them. The concept of matrimonialisation is to be applied neither ‘widely’ nor ‘narrowly’ (contrary to what the Court of Appeal had held)—again, the enquiry should focus on how the parties have dealt with the asset. Where an asset is transferred from one spouse to another with the intention to save tax (as had occurred in the case), this will not normally show that the asset is being treated as shared. The Supreme Court ultimately upheld the decision to dismiss the wife’s appeal, though it did not wholly agree with the Court of Appeal’s reasoning. Pursuant to that decision (made on the sharing basis) the wife would be provided with circa £25m of the total assets figure of circa £132.6m, being half of the matrimonial assets figure of £50.48m. David Wilkinson, solicitor at Slater Heelis, considers the judgment.

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