Cohabitation agreements and declarations of trust

It is a common misapprehension that if you live with someone long enough, your relationship transforms into a ‘common law marriage’ and you acquire the same legal rights over each other’s property and assets as a married couple. However, under UK law, you can only acquire such rights if you marry or enter into a civil partnership.

‘Unmarried couples have far fewer legal protections and rights than married couples,’ says Trevor Gay, head of the family team. ‘So, it is sensible for any couple moving in together to enter a legal agreement that will clarify the rights and responsibilities each person has regarding their property and finances while they cohabit, and which will dictate what should happen if a dispute arises or one party moves out.’

There are two main types of legal agreement that can be used to clarify the intentions of cohabitants, to protect their individual assets, and prevent costly legal disputes:

  • a declaration of trust specifically addresses ownership and division of a property or properties (a single document outlines the ownership interests and responsibilities for each property in the portfolio); while
  • a cohabitation agreement covers broader financial and personal rights and commitments, such as responsibility for paying bills and for maintenance and repairs, and ownership of shared belongings.

Both of these types of agreement can be used in conjunction with each other and should be drawn up by a solicitor to ensure the agreements are accurate, legally binding, do not contradict each other or any existing will, and reflect the wishes of both parties. In the absence of such agreements, disputes over property and finances can become lengthy, costly, and emotionally draining.

Declaration of trust

A declaration of trust is a legally binding document which clearly states the proportion in which a property is owned and how sale proceeds will be divided. It outlines each cohabitee’s share of the property, including their contributions to the deposit and mortgage, and outlines what happens in different situations such as if one wants to sell their share or if one dies.

A declaration of trust will typically include provisions which outline:

  • each party’s initial financial contribution to the deposit;
  • how mortgage payments and other outgoings will be shared;
  • what occurs when the property is sold, including how the proceeds will be split;
  • the procedure for one owner to buy out another’s share of the property; and
  • any agreements regarding occupancy rights of the property.

The document must be in writing and signed by all parties involved, with a solicitor drafting or reviewing it to ensure it is a formal deed, includes specific property details, and that all parties signed willingly with full understanding of its implications.

It is a vital tool for any jointly owned property, particularly if one person contributes more financially than another, or if the bank of mum and dad helps you get on the property ladder and they want to ensure the property stays in the family.

A declaration of trust can also be useful if you buy a property alone but wish to grant your partner an interest over time even if their name is not on the title. The trust document can outline that while you are the legal owner, you hold the property on trust for the benefit of your partner, who becomes a ‘beneficiary’. It legally protects their financial contribution, ensuring they receive their entitled share of the property’s value when it is sold, or if the relationship ends.

Conversely, if the property is in your sole name (making you the legal owner) and you want to keep it that way, a declaration of trust can prevent your cohabitee claiming a beneficial ownership in the property and acquiring possible rights to occupy the property or take a share of any rental income or sale proceeds.

This may arise if they claim they contributed towards the mortgage, rather than just paying rent; the declaration of trust will explicitly state that beneficial ownership rests solely with you and the only valid reasons your cohabitee can use to challenge the declaration of trust is if fraud or misrepresentation was involved during its creation.

Cohabitation agreement

A cohabitation agreement can serve as a clear outline for a cohabiting couple’s relationship and is documentation that can be used as evidence if a dispute goes to court after relationship breakdown. It allows each cohabitant to protect their individual financial interests and assets when they move in together, while also clarifying who is responsible for what in the shared property.

As well as the issues covered in a declaration of trust, which generally only relate to  property, a cohabitation agreement can cover a wide range of financial and personal arrangements, such as the ownership of assets and savings, management of finances, insurance and pensions, payment of debts and bills, responsibilities for repairs and maintenance, provisions for children and pets, and next-of-kin arrangements in case of illness or death.

To ensure a cohabitation agreement is legally binding in the UK, it must be drafted as a formal deed, signed by both parties, and entered into freely, without pressure or undue influence. Both partners should obtain independent and separate legal advice and provide full and frank financial disclosure. It is also vital to ensure the agreement is regularly reviewed and updated to reflect significant life changes – otherwise it may be found to be invalid.

How we can help

Cohabitation agreements and declarations of trust are extremely valuable documents and it is important you consult a specialist solicitor to ensure you have the right agreements for your circumstances.

Our expert family lawyers will listen to your requirements, talk you through your options and draw up a document that is accurate, reflects the needs and wishes of both you and your partner and is legally binding.

For further information, please contact Trevor Gay in the family law team on 0191 297 0011 or email whitley.bay@kiddspoorlaw.com

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Providing investments for children

With rising property prices and uncertainty in the mortgage market, it is unsurprising that many children are looking for financial assistance from their parents when purchasing property.  The Bank of Mum and Dad is consequently very much thriving.

What should parents and their child consider before making such a decision?

  • Both parties should seek independent legal advice;
  • Both parties should consider what the legal implications would be if the child suffered a relationship breakdown; and
  • Both parties should consider on what basis the help is being provided i.e. is it a gift or a loan or do the parents wish to have an ownership interest in the property?

Married/Engaged Couples -How can the investment be protected?

If a parent provides an investment to a child who is married or engaged the child should consider whether to enter into a pre-nuptial agreement and/or a post-nuptial agreement.

A pre-nuptial agreement is a bespoke legal document entered into by a couple planning to marry or enter into a civil partnership, which sets out what they intend to happen to their money and property if the marriage or civil partnership were to end by way of divorce or dissolution.

Is a pre-nuptial agreement binding on the Court?

Pre-nuptial agreements are not strictly legally binding on the Court. However the Court will follow the terms of a pre-nuptial agreement unless the effect would be unfair, and providing certain steps were followed when the agreement was prepared.

These include:

  • Did both parties disclose their financial position?
  • Did both parties receive independent legal advice?
  • Did the agreement deal with what would happen if the parties have children and, if not, what effect this would have on the agreement?
  • Does the agreement satisfy the financial needs of both parties?

Are pre-nuptial agreements only for the wealthy?

This is a common misconception.  Pre-nuptial agreements are not only for millionaires, but are also for couples who wish to protect significant assets such as property or investments, for anyone that owns a business, for anyone who is expecting an inheritance, or for anybody looking to ring-fence certain assets as non-matrimonial assets.  This can include property or assets owned by either party prior to the marriage.

How could a post-nuptial agreement help protect assets?

Post-nuptial agreements apply to people who are already married or in a civil partnership and are often put in place after a significant change in the parties’ financial circumstances. A post-nuptial agreement can reinforce an agreement entered into prior to the marriage.

Are post-nuptial agreements binding on the Court?

As with pre-nuptial agreements, post-nuptial agreements are not strictly binding on the Court in the event of a later divorce. They are also likely to be followed by the Court, provided that they are not viewed as unfair in the circumstances.  Again, more weight is likely to be given to an agreement where both parties have disclosed their financial positions and taken independent legal advice on the agreement and its effects.  An important point to note is that with both pre-nuptial agreements and post-nuptial agreements, it is crucial to update the agreement when circumstances change, for example, if the parties go on to have children.

What would happen on divorce if there is neither a pre-nuptial agreement nor a post-nuptial agreement?

In circumstances where the parties are married or have entered into a civil partnership and parents have assisted in purchasing property by way of a gift or loan, without the protection of a pre-nuptial agreement or post-nuptial agreement, it is possible that the investment will form part of the marital pot to be divided between the parties.  This can be particularly upsetting for parents who feel that their hard-earned cash has been lost.

What if the financial assistance was intended as a loan or for the parents to own part of the property?

In those circumstances it is extremely important to record any loan by way of a loan agreement or a Declaration of Trust and to refer to these documents in any pre-nuptial or post-nuptial agreement.  A Declaration of Trust can set out in what proportions the parties own the property and detail any money which was used to purchase the property and when that should be repaid.

What if a child is neither married nor intending to marry?

If the child is living with their partner and not intending to marry, then it is equally important to ensure any gift or loan is protected. This can be achieved in one of the following ways:

  • A Loan agreement

A loan agreement can record the amount of money the parents lend to their child and detail when the money is due to be paid back.

  • A Declaration of Trust

As detailed above a Declaration of Trust can set out in what proportions the parties own the property. It can also set out any money which was used to purchase the property and how the proceeds of sale should be divided on a sale of the property.

  • Cohabitation agreement

A cohabitation agreement can be used to set out two parties’ intentions regarding any property that they own as well as other matters such as cars, savings, personal possessions and day to day expenses.

If you are a parent considering making a loan or gift to a child, or a child considering accepting a contribution, and if you are in a relationship, then we will be able to advise on the best way to protect that contribution.  Parties should also seek separate tax advice about the implications of any potential gift, loan or other arrangement before proceeding.

For more informatiom, please get in touch with our Family Law team on 0191 297 0011 or via email at whitley.bay@kiddspoorlaw.com.

Cohabitation reform and the digital age

Cohabitation Reform and the Digital Age: Legal Realities for Modern Families

Why Seeking Expert Legal Advice Has Never Been More Important

At Kidd and Spoor Solicitors, we recognise that modern family life doesn’t always follow traditional paths. Whether you are living together, raising children outside of marriage, or facing separation, the law can be complex—and often unfair. Our experienced Family Law team is here to help you protect your rights and plan for the future with clear, practical advice tailored to your circumstances.

Cohabitation Reform: Long Overdue

The discussion surrounding cohabitation reform has long remained a legal debate, yet it has failed to become a political priority. The current legal framework for cohabiting couples in England and Wales is outdated, unclear, and frequently leads to unjust outcomes. It relies heavily on contract law and complex trust principles, which can leave many people—particularly those who have taken on greater domestic and childcare responsibilities—without adequate protection.

A Mismatch with Modern Relationships

Cohabiting families represent the fastest-growing family type in the UK. By 2031, it is projected that one in four couples will be cohabiting rather than married. Despite this trend, a persistent myth remains: the belief in ‘common law marriage’. Many couples assume they enjoy the same legal rights as married couples, often referring to themselves as ‘common law husband and wife’. Unfortunately, no such legal status exists in England and Wales. This misconception frequently leads to a false sense of security, leaving individuals vulnerable when relationships break down.

Learning from Other Jurisdictions

Other countries offer more progressive legal frameworks. In New Zealand and Australia, courts consider factors such as the length of the relationship and whether the couple has children, resulting in fairer outcomes for cohabiting partners. Scotland also provides greater legal recognition, allowing courts to assess claims between cohabitants without requiring them to have been together for a minimum period. England and Wales, however, remain out of step with these more equitable systems.

Addressing the Marriage Myth

As marriage rates decline and societal attitudes continue to evolve, more couples are choosing to cohabit rather than marry. The law needs to reflect this reality and ensure cohabiting couples have access to legal protections, regardless of marital status.

Reform is urgently required to bring the law in line with the way people are living their lives today.

What You Can Do Now: Cohabitation Agreements

While we await legislative reform, cohabiting couples can take proactive steps to protect themselves. A Cohabitation Agreement allows couples to outline their financial arrangements and responsibilities in the event of separation. Such agreements can cover property ownership, financial support, and childcare arrangements, providing peace of mind and reducing the potential for disputes.

At Kidd and Spoor, we can assist you in drafting a Cohabitation Agreement tailored to your specific needs, ensuring clarity and security for both parties.

Social Media and Family Law: Think Before You Post

Social media plays an ever-increasing role in family law proceedings. Posts, messages, and photographs shared online are frequently used as evidence in cases concerning children, finances, and injunctions. What you share on social media can, whether intentionally or not, have a significant impact on your case.

How Social Media Is Used in Family Law

  • Child Arrangements: Social media posts can demonstrate communication between parents—or a lack of it—and may provide evidence of risks to children or inappropriate behaviour.
  • Financial Matters: Photographs and posts showing holidays, large purchases, or an affluent lifestyle can be used to challenge claims of financial hardship or to reveal undeclared assets.
  • Injunctions for Harassment: Online behaviour can form evidence in cases involving harassment or abuse. Sharing explicit images or posting threatening comments may lead to legal action and court proceedings.

For example, in one case, a father claimed he was available for contact with his children, yet social media posts clearly showed he was out of the country. The court took this evidence into account when making its decision.

A Simple Rule to Follow

If it’s online, it can be used in court. As the saying goes:
“Dance like no one is watching, but post like it’s going to be read by a Judge.”

How Kidd and Spoor Can Help You

At Kidd and Spoor, we take pride in offering clear, practical advice to help you navigate the complexities of family law. Whether you are cohabiting, separating, or involved in court proceedings, our dedicated Family Law team can:

  • Draft a Cohabitation Agreement tailored to your needs
  • Advise you on your legal rights if your relationship breaks down
  • Represent you in child arrangements, financial claims, and divorce proceedings
  • Guide you on best practices for social media use during family law disputes
  • Support you through injunctions for harassment or domestic abuse

If you are living with your partner and wish to protect your future, or if you are concerned about how social media may affect your family law case, contact Kidd & Spoor today. Our friendly and knowledgeable team is here to help you safeguard what matters most.

📞 Call us on (0191) 2970011
🌐 Visit our website at https://kiddspoorlaw.co.uk/

Cohabitation agreements

In our latest blog article, we take a look at Cohabitation Agreements.

Common Law Marriage

There is a common misconception that a partner automatically acquires rights equivalent to those in the event of marriage or civil partnership by virtue of cohabitation. The “common law marriage” myth is just that and leads to many believing they have financial protection in the event of a breakdown of their relationship, but that is far from the reality.

Whilst many tabloids still love the idea, in actual fact, upon the breakdown of a relationship where the couple are unmarried, cohabitants have to rely on the law of contracts, or trusts and property in relation to interests relating to property or, in some circumstances, can make a claim on behalf of a child.

This is in contrast to married couples or civil partners who have the protection of specific legislation which sets out the factors a Court will use to deal with disputes in relation to financial matters on the breakdown of such a relationship on divorce or dissolution.

Given that cohabiting couples represent the fastest-growing family type in England and Wales, it is perhaps surprising that the Government has not taken greater notice of this issue.

Cohabitation Agreements

A cohabitation agreement can be used to set out two parties’ intentions regarding any property that they own as well as other matters such as cars, savings, personal possessions, and day-to-day expenses.

If you are a parent considering making a loan or gift to a child, or a child considering accepting a contribution, and if you are in a relationship, then we will be able to advise on the best way to protect that contribution. Parties should also seek separate tax advice about the implications of any potential gift, loan, or other arrangement before proceeding.

What is a Cohabitation Agreement/Cohabitation Deed?

A cohabitation agreement is a written, signed document, often signed as a deed in front of witnesses. It will generally deal with three principal areas:

1. Who owns (and owes) what at the time of the agreement, and in what proportions.

2. What financial arrangements you have decided to make while you are living together.

3. How property, assets, and income should be divided if you should split up.

Where the agreement is properly drawn up, the terms are reasonable, and each of you has had separate, independent legal advice on its effect, a Court is more likely to uphold the agreement in the event of a dispute.

When Should I Make a Cohabitation Agreement?

You can make a cohabitation agreement at any time, whether you are about to start living together or if you have been doing so for many years. We can help you negotiate this agreement and write it in a way that is likely to be respected by the Court in case there is ever a dispute about it.

Why Have a Cohabitation Agreement?

Unlike divorce, there is no particular set of rules that automatically applies if you split up from someone you have been living with. There is no such thing as ‘common law marriage’. Living with someone for a certain period of time doesn’t mean you are automatically entitled to financial support or to share their property after you split up.

Resolving disputes about property without an agreement can be expensive and take a long time. Often, the costs in a modest case can easily reach £50,000–£75,000 for each party and take up to 18 months to resolve.

Such cases are highly technical and require experienced specialist solicitors and barristers. A good cohabitation agreement can mean that areas of potential dispute on separation are reduced or eliminated for a fraction of the costs set out above.

What Can Be Covered in a Cohabitation Agreement?

Your Shared Home

It is important to record how the home is owned, and whether there has been any separate agreement or promise that isn’t currently reflected in the legal documents. Who is paying the mortgage? If there are any endowment policies or other savings arrangements linked to a mortgage, what contributions are being made to those, and how will they be dealt with if you split up? Are you going to insure each other’s lives?

Money and Paying Bills

Many people find it convenient to have a joint bank account when they live together but need to decide what contributions they are going to make to that account. Will the contributions be equal, and if not, will you consider the money in the joint account to be equally owned? What will the joint account be used for, and when should your personal accounts be used instead? If you’re not using a joint account, who will pay which household bills, and will this be considered an equivalent contribution to something else? What about credit cards and debts?

Pensions

Pension sharing, making a transfer between the parties’ pension funds, might not be available outside of divorce. Pension funds sometimes give you the opportunity to make provision for loved ones. You may wish, for example, to agree on nominations for death-in-service benefits.

Personal Possessions

You should consider who owns and/or will keep items such as furniture and cars. It may be worth setting down any rules about ownership of important things now or a way to resolve disagreements about them in the event of a separation. For example, each of you could pick in turn from a list of items.

Children

Although not legally binding, it is worthwhile considering whether you might like to provide for any children over and above the minimum expected by the child support system in the event of your separation. This could include school or university fees (including VAT) and setting down some expectations about how children would be cared for if you were to live apart.

Updating a Cohabitation Agreement

One of the key benefits of a cohabitation agreement is its flexibility. As circumstances change—such as purchasing a new home, having children, or changes in financial contributions—the agreement can be updated to reflect your new arrangements. Updating a cohabitation agreement is straightforward and ensures it remains relevant and fair to both parties. To amend your agreement, both parties will need to consent to the changes, and it is advisable to seek independent legal advice to ensure the updated agreement continues to offer the protection you need.

In the event the parties enter into marriage or a civil partnership, then legislation does cover the arrangements. Advice should be obtained in advance of this to see what needs to be done to offer ongoing protections.