The Law
More and more couples are choosing not to marry but instead live together and often have a misconception of the “common law wife” and incorrectly believe that once you have lived together for two years they have the same rights as married couples.
The financial position of an unmarried couple is very different from that of married couples. When a married couple separates, the Matrimonial Causes Act 1973 comes into force, however there is no equivalent legislation for cohabitants. Therefore, it is essential that couples obtain advice before making important decision such as moving in together.
What is a Cohabitation Agreement?
This is an agreement between couples that records arrangements when couples decide to live together. It records each party’s rights and responsibilities for a range of issues, including any property, financial arrangements during cohabitation and on separation. Cohabitation agreements are beneficial as they record the couple’s intentions about the legal and beneficial ownership of their real and personal property as well as plan for financial support following a breakdown. This minimises disputes between couples and prevents the risk of litigation.
Cohabitation Agreements are lawful and governed by rules of contract, therefore it is important to ensure that they comply with the basic principles so they are valid.
Home Ownership and Declaration of Trust
Unlike married couples, parties are not entitled to statutory ‘Home Rights’ or an interest in the equity despite the registered ownership of the property. If one party were to contribute to the purchase of a property but were not registered on the title and did not enter a Declaration of Trust, it will be very difficult to recover their contribution and prove their beneficial entitlement. The criteria to establish a beneficial interest is very complex and stringent and can often be very costly if resolved through the Court.
Problems arising if relationship is ended on Death
It is important to ensure that your will is up to date or put a will in place. If you were to die intestate (without a will or valid will) then the rules differ depending on whether you are married or not. If you are not married, then your partner would not automatically benefit from your estate. Furthermore, as cohabitants you are not entitled to the same tax exemptions on death as married couples.
What we can offer
At Paul Robinson, we are able to assist in both drawing up Cohabitation Agreements and advising on the law around cohabitation. We are also able to provide independent legal advice on an agreement that may have already been drawn up. We offer a fixed fee initial appointment of up to an hour, currently undertaken remotely by telephone, followed by a written note of the issues discussed. If you would like further advice, then please contact a member of our family department [email protected] / 01702 662963 / 020 35537115/ 01277 889193 / 01268 855679.
