Barbie and Ken have been together on and off since 1961. It was love at first sight for the pair and after a rough patch in the noughties, they are back together. They have no plans to marry and they have no plans to have children. They are, it would appear to any outsider, living the dream.

However, for Ken, life in plastic may not be so fantastic. Ken doesn’t own the dreamhouse, that property is Barbie’s and Barbie’s alone. Ken has worked over the years – he has been an astronaut, a chef, a lifeguard – but he hasn’t built up a pension nor does he have a stable career history to fall back upon or from which to raise a mortgage. If a wedding was on the cards for this long-time couple, Ken may be entitled to a share in Barbie’s fortune, but as boyfriend material only, Ken’s financial position is a bit weak.

So, what happens if Barbie and Ken break up? Well, it’s complicated. Barbie and Ken have been cohabiting i.e., they are a couple are living together who are not married. Outside of Barbie Land, this is happening more and more. The proportion of people who live in a couple that are cohabiting is now nearly a quarter of all couples living together according to the Office of National Statistics which is a 144% jump from 1996.

Cohabitation gives no general legal status to a couple, unlike married couples or those who are part of a civil partnership. “Common law marriage”? A myth and a dangerous one at that.

There’s also a risk to Barbie as Ken may have claims against the Dreamhouse. Proceedings like these can be costly, acrimonious, and stressful: not words you would associate with Barbie (or Ken).

What is the solution? Forward planning is the best option here for all involved. It gives both Barbie and Ken clarity as to their financial position and what they can expect if they were to break up.

Cohabitation Agreement

A cohabitation agreement is a legal document between couples who are living together.

This agreement can set out arrangements for finances, property, and children during the relationship and after it breaks down also. So, who gets the money from the joint bank account, who will pay the utility bills and, perhaps most importantly, who gets the house and the dog.

A cohabitation agreement can also set out expectations for child arrangements, to avoid costly court proceedings.

Provided that they are drafted and executed properly, cohabitation agreements can be legally binding contracts. All told, it can be a very versatile document and a worthwhile investment to avoid conflict and cost later down the line.

Declaration of Trust

If you are just looking to confirm the terms of the ownership of a property, a declaration of trust may be for you. For instance, if one person put 75% of the deposit into the property, a Declaration of Trust can record this reality.

Conversations around these topics are hard but it’s worth having they today, to avoid the Dreamhouse becoming a bit of a nightmare tomorrow.