David Coutts: Take the legal route to avoid cohabitation pitfalls

David Coutts is an Associate, Anderson Strathern

Three quarters of millennials now believe cohabitation before marriage (or civil partnership) is a good thing. There are also more unmarried older adults these days, and the trend is growing for cohabiting rather than marriage. Recent research from Scottish Widows suggests older generations are also happier to disclose financial information with their partner at an earlier stage than younger people, with only one in ten millennials saying they are immediately comfortable, compared to a third of over 55s. The research also reveals 1 in 5 Brits are in a financially incompatible relationship, with almost a fifth wishing they had discussed finances earlier in a relationship.

Planning a life together with a partner is a big event and moving in together should be a reason to celebrate. People have many reasons for cohabitating. It can be more convenient than living separately and will work out more cost-effective for some, while others may just want to have that closeness and provide stability for children or families from previous partners.

Whatever your reason for living together and whether going on to marry or not, the vast majority of couples will fall under the Family Law (Scotland) Act 2006’s definition of cohabitants. This sets out cohabitants’ claims on separation and where the relationship ends by the death of one of them. Most may not be aware that cohabitants in Scotland can make a claim at the end of a relationship.

Indeed, many couples think that because they are living together, they automatically have the same rights as married couples. This is not the case. Common law marriage no longer exists in Scotland, even if you have lived with your partner for many years. Whilst the 2006 Act enables a claim to be made in the event of separation or death of a co-habiting partner, claims are limited and it may not cover all the needs of an individual, or fully reflect the wishes of a partner lost.

For couples considering cohabitation, a Living Together Agreement can provide peace of mind.

Living Together Agreements, and Cohabitation Agreements are agreed contracts and can include a record of what you own, how you will manage your finances throughout the relationship and how you will deal with various matters in the event of separation. The agreement will encourage you to think about the best way for you to organise your finances and commitments. If the relationship were to end, the agreement will seek to ensure that both of you can move on amicably and in the best financial position for you and your family.

A Living Together Agreement is specific to a couple’s specific circumstances and can include as much or as little as they wish. At its simplest, the agreement can state that neither partner will make a claim in the event that the relationship breaks down.

The agreement can also set out who gets what on separation or death of a partner, including repaying any debts or family loans. This avoids the stress and cost of a disputed claim at the end of the relationship. It is also advisable that parties have updated Wills.

Making an agreement before cohabiting can strengthen a relationship and give both partners a greater sense of security, especially where children are involved. Discussing attitudes to finances and future financial plans can serve as the backbone to cohabitation and make it much easier to plan your life together.

Whether you’re a young twenty something starting out, a couple planning to live together, planning marriage or civil partnership or considering separation or divorce, a family lawyer is there to help and advise. Not every relationship lasts and when that is the case we like to think that with our help and advice, the experience will not be as costly and stressful as it could otherwise be.

David Coutts is an associate, Anderson Strathern