The myths, the truths and how unmarried couples can protect themselves.
It is estimated that 46% of adults in England and Wales believe that couples can acquire a ‘common law marriage’ if they live together or have a child together. Common law marriage is the belief that if the couple have been living together for a period of time they will be entitled to a division of assets on separation similar to those on a divorce including some form of maintenance. In England and Wales, common law marriage does not exist and cohabiting couples may not be as protected as they believe they are.
We have listed a few examples of some of the key differences between married and cohabiting couples. Any references to married couples also includes couples who are in a civil partnership.
On the breakdown of a marriage, one spouse can be required to pay the other spousal maintenance. On separating as a cohabiting couple, there is no obligation to pay maintenance to the other party. This means that if one person has decided to give up work to look after children for example, they will not be entitled to maintenance.
A share of a pension can only be considered as part of divorce proceedings, therefore a cohabiting couple on separation will not be able to consider the possibility of a pension share.
If there are children from the relationship, child maintenance will be payable to the parent with whom the child lives with, by the other parent, and the amount is dependent on the paying parent’s income, the number of nights that the child/children spend with the paying parent, and whether the paying parent has any other dependents living in their household.
Property and assets
When married, both spouses have a right to live in the family home whether it is owned in the sole name of one spouse or in joint names. On divorce, the non-owning spouse can acquire an interest in the family home, and or assets owned by the other spouse.
When cohabiting, there is no such right as specified above and the area of law is much more complicated. If the property is in joint names, there is a presumption that the property is held equally unless there is a deed of trust declaring that the property is held in unequal shares.
If the property is in the sole name of one partner, the non-owning partner can claim an interest in the property, if he/she made financial contributions to the property including renovations and improvements and/or relied on promises that the house was ‘ours’. If there is not a written agreement, the conduct of the partners will be highly relevant in ascertaining whether there was an agreement, or promise between them to share the property. Establishing what the agreement was, can involve lengthy and costly Court proceedings. There may also be tax consequences of a property transfer.
Where there are children, a non-owning parent may acquire a right to occupy the family home, or entitlement to a share of the sale proceeds, to rehouse the child/children although this will revert to the owning parent, upon the child/children reaching majority.
If a spouse dies and does not have a Will, under the rules of intestacy the surviving spouse will receive all or some of the estate. Everything that passes to a surviving spouse on death does not have an Inheritance Tax liability.
If a cohabiting partner dies and does not have a Will, there is no automatic right that the estate will be left to the surviving partner. Inheritance Tax may be payable depending on the value of the estate.
What can cohabiting couples do to protect their interest?
- If purchasing a property together consider purchasing the property in joint names.
- If purchasing a property together and the couple are making unequal contributions consider creating a Deed of Trust to specify the interest that the parties have in the property.
- Complete a Cohabitation agreement that will prescribe the arrangements for division of property and the child care arrangements upon a separation.
- Complete a Will.
- If uncertain, seek independent legal advice.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances
This article is brought to you Kathryn Coyle and Ellie White Andrews from our Maidenhead office. You can contact them for a free 45-minute free consultation to discuss cohabitation, divorce, matrimonial finances or any aspect of family law, either during the week or on a Saturday, at your convenience. The consultation can take place by telephone or by zoom.
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