For many couples moving in together, the question of which legal document you need – a cohabitation agreement, a Declaration of Trust, or both – is not always straightforward. The two are often confused, and understandably so. They serve distinct purposes, and choosing the right one depends on what you are trying to protect.
What is a cohabitation agreement?
A cohabitation agreement, sometimes called living together agreement, is a formal contract that sets out how you and your partner intend to manage your finances and property, both during your relationship and in the event that it ends.
It can cover a wide range of matters, including:
- Property ownership: How any jointly or solely owned property is held and what each partner is entitled to
- Household finances: Who pays the mortgage, rent, bills, and how costs are shared
- Savings and assets: How bank accounts, savings, and personal possessions are owned and divided
- Children: Arrangements and financial provision in the event of separation
- Death: How assets should be dealt with if one partner dies
Find out more about what a cohabitation agreement is in our latest advice.
What is a Declaration of Trust?
A Declaration of Trust, also known as a Deed of Trust, is a private legal document that records exactly how a property is owned between two or more people. It specifies each party’s share, whether equal or unequal, and once signed, a solicitor can notify HM Land Registry of a restriction (known as a Form A restriction), so nothing can happen to the property without the deed being reviewed.
It is particularly useful where contributions to a property have not been equal. For example, where one partner paid a larger deposit, the other has covered renovation costs, or a parent has contributed funds toward a purchase. Without a Declaration of Trust in place, the courts may have difficulty determining what was originally intended, which can lead to costly and painful disputes.
Unlike a cohabitation agreement, a Declaration of Trust is legally binding when correctly executed. That clarity makes it a cost-effective option for couples who want to protect specific property interests, without necessarily addressing the broader terms of their relationship.
Does a Declaration of Trust work if we own as joint tenants?
A Declaration of Trust is only compatible with owning property as tenants in common, not as joint tenants.
This is often overlooked, and the distinction matters. If you own a property as joint tenants, you do not hold separate shares. You own the whole property together as one combined interest. There are no defined percentages, and the right of survivorship means that if one of you dies, the other automatically inherits the property regardless of what any will says. Because there are no distinct shares to record, a standalone Declaration of Trust has no legal foundation under a joint tenancy.
Tenants in common, by contrast, each own a specific share of the property. Those shares can be equal (50/50) or reflect unequal contributions. For example, 70/30, where one partner provided a larger deposit. It is this defined share that a Declaration of Trust exists to record and protect.
If your property is currently registered as joint tenants and you want a Declaration of Trust to apply, you will need to formally sever the joint tenancy first. That process involves:
- Serving written notice of severance on the other owner
- Applying to HM Land Registry using Form SEV to enter a Form A restriction on the title register
- Preparing and executing the Declaration of Trust to record your agreed shares
A solicitor can handle all of this as part of a single process. It is worth checking how your property is currently registered before assuming a Declaration of Trust is already in place or enforceable.
What is the difference between a cohabitation agreement and a Declaration of Trust?
The two documents may sound similar, but they address very different things – and confusing them is an easy mistake to make.
What each document covers
A Declaration of Trust answers one specific question: Who owns what share of a property, and how will it be divided if sold?
A cohabitation agreement answers a much broader set of questions:
- What happens to your shared savings?
- Who remains in the home after separation?
- What financial arrangements are in place for your children?
- How are household expenses managed while you live together?
Legal status
There is also a difference in legal standing. A declaration of trust is legally binding once correctly executed by a solicitor, signed and a restriction registered with HM Land Registry. A cohabitation agreement, while persuasive and valuable, may carry less absolute legal weight. Although the courts are increasingly willing to uphold them where the proper process has been followed.
Cost and process
Cohabitation agreements are generally more expensive to prepare, in part because both parties are advised to obtain independent legal advice from separate solicitors, and provide full and frank financial disclosure.
This helps ensure the agreement reflects a genuinely mutual understanding and reduces the risk of it being challenged later. The upfront cost can be worthwhile if it helps avoid uncertainty and disputes down the line.
Do I need a cohabitation agreement or a Declaration of Trust?
The right answer depends on your situation. Understanding your rights as an unmarried couple is a helpful starting point, but here are some practical guidelines.
A Declaration of Trust may be sufficient if:
- You are purchasing a property jointly as tenants in common and want to record your respective financial contributions
- The property is an investment rather than a shared home
- Your main concern is ensuring that HM Land Registry accurately reflects how the property is owned
A cohabitation agreement is likely more appropriate if:
- You are moving in with a romantic partner and want broader financial protection
- You have children together, or are planning to
- You want to set out clearly how household expenses, savings, and debts will be managed
- You want to address what happens in the event of separation or death
It is also worth keeping in mind that, despite what many people believe, there is no such thing as a ‘common law marriage’ in England and Wales. The length of cohabitation does not automatically confer legal rights, and without documentation in place, the courts have very limited powers to distribute assets fairly when a relationship ends.
What happens if you split up without any legal documents in place?
The statutory framework that applies in these disputes is the Trusts of Land and Appointment of Trustees Act 1996, commonly known as TOLATA.
Under TOLATA, an unmarried partner can apply to the court for what is called declaratory relief: A formal declaration of their legal rights and interest in a property. The court can order a property to be sold, determine each party’s share, and, in some cases, allow a former partner to reoccupy the home.
These proceedings are classified as civil rather than family proceedings, which carry significant cost implications. TOLATA claims can be lengthy and expensive, often far more so than the cost of putting protective documents in place at the outset.
Can I have both a cohabitation agreement and a Declaration of Trust?
Yes, and in many cases, this is the most comprehensive approach. A cohabitation agreement and Declaration of Trust are not mutually exclusive. They serve different functions and can work well alongside each other.
A cohabitation agreement will often reference how property is held, but it cannot substitute for a legally binding Declaration of Trust and a Form A restriction at HM Land Registry. If you are purchasing a property together as tenants in common and also want broader financial protection, your solicitor may recommend preparing both documents simultaneously.
This ensures that the specifics of your property ownership are correctly recorded as a legal deed, while the wider terms of your relationship are also set out in writing. This gives you a clearer picture of where you each stand, whatever the future holds.
Judit Kerese, Senior Associate at our family law office in Gloucester, says:
“We often recommend that you have both a cohabitation agreement and a Declaration of Trust prepared at the same time. The cohabitation agreement can refer to terms of the Declaration of Trust and annex the same for the avoidance of doubt.
“This approach will ensure that intentions around how finances are managed are set out fully within the cohabitation agreement, and the agreement as to property ownership is recorded within a legally binding Declaration of Trust.”
What happens to these documents if we later marry?
If you marry after entering into a cohabitation agreement or a Declaration of Trust, those documents do not automatically become void. However, their legal significance changes considerably.
On divorce, financial matters between spouses are governed by the Matrimonial Causes Act 1973, and not by the terms of any pre-existing cohabitation agreement. The court has broad discretionary powers under that Act to make financial orders it considers fair, taking into account a wide range of factors, including each party’s needs, contributions, and the welfare of any children.
This does not mean any prior documentation is irrelevant, as courts do give weight to what couples intended when they set up their finances. But it does mean that a cohabitation agreement executed before marriage no longer provides the same protection it did when you were unmarried.
If you are planning to marry and want to preserve specific protections (for example, to ring-fence assets you brought into the relationship or to record unequal property contributions), the appropriate document is a prenuptial agreement. While prenups are not automatically binding under English and Welsh law, courts are increasingly willing to uphold them where certain conditions are met:
- Both parties entered the agreement freely, without pressure
- Each had independent legal advice
- There was full financial disclosure from both sides
- The agreement was signed at least 28 days before the wedding
- The agreement is fair and does not prejudice any children
If you have a cohabitation agreement or Declaration of Trust in place and are now considering marriage, it is worth speaking to a solicitor about whether a prenuptial agreement is appropriate for your circumstances.
How do I get a cohabitation agreement or Declaration of Trust?
Both documents should be prepared by a qualified solicitor. Both family lawyers and conveyancers can draw up a Declaration of Trust, but it is worth getting insight from both, and only a family lawyer can draft a cohabitation agreement. It is well worth the upfront cost to ensure the documents are prepared correctly and can hold weight if the relationship breaks down.
For a Declaration of Trust, your solicitor will draft a deed reflecting your agreed ownership shares. You will also need to confirm, or establish, that you hold the property as tenants in common, since a Declaration of Trust is not compatible with joint tenancy. Once signed and executed, it is a legally binding contract, and the Land Registry can apply a restriction on the property.
For a cohabitation agreement, the process involves a little more preparation. Ideally, both parties should obtain independent legal advice, meaning each person sees a separate solicitor. You will also be asked to provide full financial disclosure, so that each partner has a clear picture of the other’s circumstances before signing. This openness strengthens the agreement’s prospects of being upheld if it is ever tested.
Both documents can be revisited and updated as your life changes. For example, if you have children, one partner stops working, or you purchase an additional property together. If marriage is on the horizon, reviewing these arrangements with a solicitor at that point ensures your protections remain appropriate.
It can feel uncomfortable to plan for a relationship ending before it has truly begun. But the absence of clear documentation is precisely what leads to some of the most painful and expensive disputes, and to the uncertainty of a TOLATA claim that could have been avoided.
The sooner you put the right protections in place, the less you will need to rely on them. If you are unsure whether you need a cohabitation agreement, a Declaration of Trust, or both, speaking to a specialist can help you understand your options clearly and without pressure.
Get in touch with our team today to receive tailored legal advice for your specific circumstances.
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