With 2020 being a Leap Year and Valentine’s Day fast approaching, love is all around us this February!
Without wanting to dampen the romance, whether you are thinking about setting up home together, popping the big question or are already planning your big day, it is important to plan ahead and agree arrangements at the outset.
Setting up home together?
Moving in together is one of the most exciting times but as well as deciding on which wallpaper looks best in the living room and which towels are the fluffiest, you should also consider entering into a Cohabitation Agreement.
A Cohabitation Agreement is an agreement to record arrangements, usually between unmarried couples who have decided to live together. It records each person’s legal and beneficial ownership of the property, each person’s rights and responsibilities in relation to the property, financial arrangements and what happens if you decide you no longer want to live together. A Cohabitation Agreement can also be used to record ownership of personal property (including items such as cars, furniture or art) which may be used or enjoyed by both of you whilst you live together, but are to be retained by one of you if cohabitation ends.
Although there is no set rule as to when a cohabitation agreement should be entered into, it is advisable for the agreement to be completed at the same time as the property is purchased so that the parties' intentions are clear and have been recorded at the outset.
Engaged to be Married?
Whether you are newly engaged or in the full flow of “wedmin”, part of your planning should include considering whether to enter into a Prenuptial Agreement before the big day.
A Prenuptial Agreement is an agreement between a couple, entered into before marriage, which sets out what financial provision will be made for each of you should the marriage come to an end. The agreement often seeks to protect assets you already own and separates those from assets which you have acquired together during the course of the marriage or will acquire in the future.
Although Prenuptial Agreements are not currently legally binding, they are becoming increasingly recognised by the Courts and provided they have been properly entered into, can be a compelling factor in determining the financial outcome of a divorce. It is important that full financial disclosure takes place between the parties prior to entering into any agreement and that both parties have access to independent legal advice so that they fully understand the implications of signing the agreement.
It is recommended that the agreement is entered into no less than 28 days prior to the wedding so that there can be no suggestion that one person has been pressurised into signing the agreement.
If you’re already married, you can also consider putting in place a Postnuptial Agreement. Like a Prenuptial Agreement, this type of agreement can ring-fence assets you’ve built up prior to the marriage, or deal with a change in your financial circumstances following the marriage which you now wish to take into account.
Although talking law may seem far from the language of love, some careful and sensible planning at the outset may save you a significant amount of time, money and uncertainty later down the line. Whichever agreement best suits you, it is essential that proper legal advice is sought and agreements are drawn up by a legal professional to ensure it is enforceable and any risk of its validity being challenged is minimised.
Please get in touch with the Family team if you would like any further information.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.