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Cohabitation Agreements

  • Cohabitation agreements
  • Over half of the population are still of mistaken belief that co-habitation gives you the same rights as married couples/civil partners.
  • Pre-nuptial agreements.
  • Crossley v Crossley : Prenuptial agreement background details
  • Crossley v Crossley : Her appeal was dismissed by three Court of Appeal judges.

Cohabitation agreements

It is essential when setting up a home together that legal and financial affairs are put in order by getting a cohabitation agreement and Wills drawn up through a solicitor. A cohabitation agreement can be tailored to the individual couple's situation, but should set out, for example, how the property ownership is to be shared, how the parties' income is to be utilised, i.e. either pooling resources or maintaining separate accounts and provisions for changes in the future to the agreement should it be necessary.

Over half of the population are still of mistaken belief that co-habitation gives you the same rights as married couples/civil partners.

This is totally incorrect. Changes in this area are being called for and The Law Commission produced a Consultation Paper in Summer 2006 containing their recommendations but as yet, they have not been asked to draft a Bill.

The present position is that co-habitants have little protection in relation to financial matters should their relationship break down. The courts do not have any authority to award maintenance payments, property transfer orders, lump sum payments, pension sharing orders or indeed any other form of financial settlement where a couple have not married or formed a civil partnership. Furthermore, unless a successful claim can be made under the Trusts of Land and Appointment of Trustees Act 1996, where the home is held in the sole name of one partner only, the other will have no right to occupy the property or to claim any interest in it.

There is, unfortunately, no statute confirming that cohabitation agreements are enforceable; however a formal agreement, properly and fairly arrived at with competent legal advice, can maximise the chances of the court holding each party to their side of the bargain.

Pre-nuptial agreements.

Not just for the super rich, the demand for pre-nuptial agreements is growing and the contracts are becoming more common with younger professionals.

Considering a prenuptial agreement? Contact Dale & Co. 

Pre-nuptial agreements are not currently binding in English law however, they can be of significant value and can be taken into account by the courts should there be a dispute during the course of a subsequent divorce.

In the case of Crossley v Crossley there was an appeal following the court refusing a wife full financial disclosure on the basis that a pre-nuptial agreement had been signed. This was a short childless marriage and the agreement had stated that neither party would bring any application for financial provision should their marriage break down. The appeal was dismissed. This judgment has added weight to the benefit of Pre-nuptial agreements, leading Susan Crossley to drop her claim to her husband's £45 million fortune.

Crossley v Crossley : Prenuptial agreement background details

It is not surprising that Stuart Crossley required Susan Crossley (nee Dean) sign a prenuptial agreement before he tied the knot, after all she had already benefitted from generous settlements from her previous 3 husbands Kevin Nicholson, heir to the Kwik Save fortune, Peter Lilley the adopted son of Thomas Lilley, chief of Lilley and Skinner shoes and racing magnate Robert Sangster, heir to the Vernon Pools fortune.

However, after a 14 month marriage Susan Crossley felt that the prenuptial agreement promising not to pursue her husband's fortune was invalid due to the discovery of an additional £60 million held in accounts in Monaco and Andorra which she did not know about when signing the agreement.

Mr Crossley’s legal team had asked the courts to short-circuit normal divorce procedures because the marriage was short and childless, both partners had independent wealth and a prenuptial agreement was in place.

In that document the couple had agreed that in the event of a divorce they would retain their own assets and make no claims against each other.

His team argued that the facts could be heard in one day rather than enduring the usual proceedings, which might entail three hearings, a delay of up to 18 months and significant costs.

The High Court judge Mr Justice Bennett agreed that the case could be heard in one day in February, when the prenuptial agreement would be evaluated and a decision made there and then over whether to throw out Mrs Crossley’s arguments..

Yesterday, Mrs Crossley’s legal team argued that in agreeing such a procedure Mr Justice Bennett was denying her access to the courts. She would have no chance to present evidence about undisclosed assets that she claimed rendered the agreement invalid.

Crossley v Crossley : Her appeal was dismissed by three Court of Appeal judges.

Lord Justice Thorpe, who sat with Lords Justices Keene and Wall, praised Mr Justice Bennett’s innovative decision and said that judges had a duty to look at ways to shorten the trial process where “very rich people are demanding full-scale trials” and limiting the courts’ overstretched capacity.

Lord Justice Thorpe, giving the ruling, also called for legislation to clarify the status of prenuptial agreements. In Britain they are not legally binding, although judges do take them into account.

He said: 'This is a quite exceptional case on its facts. If ever there is to be a paradigm case in which the courts will look to the prenuptial agreement as not simply one of the peripheral factors of the case but a factor of magnetic importance, then it seems to me that this is such a case.'

There was a 'strong argument' for legislation, he added, given that the European Union considered it important to tackle the differences that existed on property-sharing between member states.

Mark Harper, a partner with Mr Crossley’s solicitors, said that the ruling was 'a significant step forward for prenuptial agreements'. He added: 'The Court of Appeal has shown that when a prenuptial agreement exists, the English courts can take a pragmatic approach and short-circuit normal court procedures, saving time, money and emotional distress for all involved.'

Mr Crossley said: 'This is a fair decision. I am upset that our marriage failed.'

He met his future wife in the summer of 2005 and they were married 14 weeks later, in early January last year. But from June the couple lived largely separate lives and in August she filed for divorce.

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