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When deciding how to legally protect your financial interests while living with a partner, you might consider a Declaration of Trust or a Cohabitation Agreement.
A Cohabitation Agreement is a broad document covering various financial and personal arrangements for unmarried couples, while a Declaration of Trust is a specific legal document that clarifies the ownership of a property.
Understanding the differences between these documents can help you decide which suits your situation best.
Declaration of Trust
A Declaration of Trust, also known as a Deed of Trust, is a legal document that sets out how a property is owned between individuals. It outlines each person’s financial share in the property and explains how the proceeds will be divided if the property is sold.
This is especially helpful when one person has put in more money, for example, a larger deposit or more towards the mortgage and wants that reflected in the ownership split. A Declaration of Trust is legally binding and can help avoid disagreements later by clearly recording who is entitled to what.
Cohabitation Agreement
A Cohabitation Agreement is a more wide-ranging document. It can still include each person’s financial share in the property, but it goes further, covering other financial and practical arrangements while you’re living together, and if you split up.
This might include:
- How you share rent, bills, or mortgage payments
- What happens to joint bank accounts or debts
- Ownership of belongings and cars
- How pets will be cared for if you separate
- Arrangements for children, such as how costs will be shared or who will live where
While the agreement can record what you both intend to happen regarding children, it’s important to know that anything involving children, such as who they live with or how often they see each parent, must always be in the child’s best interests. Courts can overrule any arrangements that don’t meet that standard. Still, setting expectations in advance can be helpful for everyone involved.
Are Cohabitation Agreements legally binding?
In the UK, Cohabitation Agreements can be legally binding, as long as they are set up properly. That means:
- Both people agree freely (without pressure)
- It’s in writing and signed as a deed
- Both parties have been honest about their finances
- Ideally, each person gets independent legal advice
Even with all this, the courts still have the final say, especially where children are involved. But a well-prepared agreement is a strong starting point and can carry significant weight if things ever go to court.
Key Differences
- Scope: A Declaration of Trust deals only with property ownership. A Cohabitation Agreement covers much more, including daily finances, belongings, and child-related matters.
- Flexibility: A Cohabitation Agreement can be tailored to your whole life together, not just the house.
Which one do I need?
If your only concern is recording how a property is owned or protecting a larger investment you have made, a Declaration of Trust might be enough.
If you want to set out wider responsibilities, like managing bills, sharing possessions, or agreeing on how to approach things involving children, a Cohabitation Agreement offers broader protection.
You can also have both, they complement each other and together give a fuller picture of your intentions.
Whichever you choose, getting legal advice is a good idea. These documents can help avoid confusion, protect your finances, and give both of you peace of mind.
Speak to our specialist cohabitation solicitors in Bath, Bristol or Bradford on Avon for advice on joint marriages in separation, or contact us at info@sharpfamilylaw.com.
