Prenups and cohabitation agreements – why do we feel uncomfortable talking about money when we move in together?
The fact is that many people feel awkward talking about what should happen to the money and property we already have when we move in together.
Signing prenups and cohabitation agreements should be as natural and as routine to people as taking out a life insurance policy when you take on a mortgage.
It should in fact be something that the law helps us with automatically, but unfortunately it doesn’t. We have to help ourselves – and that starts with talking about it.
A little bit of background
Did you know that until 140 years ago married women in the UK weren’t allowed to own their own property or open a bank account?
140 years ago. Old news?
Ok, did you know that right up until the Sex Discrimination Act 1975, banks were allowed to have a policy requiring women to have their husband’s permission before they could open a bank account in their sole name?
Yes, that’s 1975 – less than 50 years ago.
So, when I was a child, my mother could be prevented by a bank manager from opening a bank account in her sole name without my father’s permission.
Even if you’re in your 20s or 30s now, your own parents grew up in an age where that routinely happened.
It’s not that surprising that 1 generation on, we still don’t find it easy in a social or familial context to talk about couples having separate assets or owning separate shares of property, even separate money.
Other countries around the world
In France, Germany, Italy, Spain, Poland, large parts of the US, Canada, South Africa and a host of other countries there is a legally recognised principle of community of property after marriage.
The general thrust of this principle is that everything you have before you get married is personal to you and everything you acquire (whether together or separately) during the marriage is joint. It’s a bit like having to sign prenups and cohabitation agreements along with applying for a marriage licence.
Each country has its own particular way of dividing communal property and of safeguarding the welfare of children, vulnerable spouses etc.
But the point is, they have addressed it as an issue in the legal framework. Unlike in the UK where we have no community of property law.
Why don’t we have one?
Well, we have a long tradition in this country, of lawmakers not wanting to interfere in how we arrange our lives, financially or otherwise.
And so it’s left to us to do it ourselves. We need to prepare any agreements we consider appropriate at the appropriate time.
And if we don’t, well the court has the power as a last resort to make orders distributing property after divorce if we can’t agree a fair way forward.
I can see the reasoning behind this but the problem is, in a society where no one wants to talk about money, those agreements often don’t get written down. And by the time we actually need them, it’s often too late.
Either, we can’t agree on what we agreed.
Or, we can’t agree on what we might have agreed if we’d thought about it.
Or, we can’t remember.
Other countries have laws that tell people what is joint property and what is personal.
England and Wales don’t have this law.
Other countries make people sign agreements at the time they get married if they want to opt out of the default situation.
The law in England and Wales doesn’t even have a default position.
It’s easy to forget what you agreed and easier to fall out about it.
A cohabitation agreement, deed of trust or a prenuptial agreement are all types of family law agreement.
Even though these are not automatic in this country they are straightforward to prepare and will help you avoid conflict down the line.