A Cohabitation Agreement simply regulates how a couple, who are not married, are going to run their financial affairs when they are together and what will happen if the relationship breaks down, assuming they have not subsequently married or entered into a civil partnership.
It is an attempt to provide certainty and security for both of you and to avoid problems if you do decide to separate.
An agreement can deal with any number of things including: how parties are going to hold property or assets they have and, whether they are going to have a joint bank account, who is going to contribute what to the account, and who is going to be responsible for the outgoings in respect of the property in which they live. It can set out what should happen at the end of the relationship which might include one party simply vacating the property; buying the other’s interest out or indeed for the property to be sold and as to how the proceeds should be divided.
The important point is to set out who gets what in the event the relationship breaks down which will reduce conflict at what will already be a difficult time.
Those who have already acquired wealth should always give thought to the merits of entering into such an agreement before moving someone else in.
And for the sake of clarity, there is no such thing as a Common Law Marriage.