Cohabitation: Know your rights
Cohabitation: Know your rights
As part of Resolution’s Cohabitation Awareness Week, we are raising awareness about the rights of cohabiting couples. According to a recent survey carried out by Resolution, cohabiting couples are the fastest growing family type in the UK, with more than 3.3 million people living in these sort of relationships. It also revealed that 3 in 4 unmarried couples who separate are often surprised to find they have no legal rights. Nearly two-thirds reported this lack of legal protection sees women lose out more often than men.
The myth of the ‘Common Law Marriage’
Many people incorrectly assume that they acquire legal status and therefore legal rights, by virtue of living with their partner, often referring to their relationship as a ‘common law marriage’. Contrary to popular belief, there is no such thing as a ‘common law marriage’, regardless of how long the co-habiting couple have been living together or whether there are children involved. The legal rights available to co-habiting couples are invariably limited in comparison to those who are married or in civil partnership. For a start, there is no single piece of legislation which governs the rights of co-habiting couples on separation. Instead, we have to look to different areas of law to help deal with each issue that may arise on separation or death. Typically, these are: property rights; children; inheritance; pensions and taxation. Consequently, many of those living together unmarried are unaware of their lack of rights and, if the relationship breaks down, it comes as a surprise that they are not legally protected.
In 2007, the Law Commission recommended affording rights to cohabiting couples yet the situation remains unchanged.
How can you protect yourself?
There are ways in which cohabiting couples can protect themselves, mainly these are through:
- A Cohabitation Agreement;
- A Declaration of Trust, particularly where you are acquiring joint property;
- Taking out life insurance; and
- Making a Will
What is a Cohabitation Agreement?
A Cohabitation Agreement contains the arrangements between two or more people who have agreed to live with one another, as a couple or otherwise. The Agreement contains each party’s rights and responsibilities in relation to the property where they live or plan to live together, the financial arrangements between the parties and the arrangements should the parties decide that they wish to terminate their cohabitation.
In addition, a Cohabitation Agreement can be used to record the ownership of personal possessions, which may be enjoyed by all cohabitees during the cohabitation, but will be retained by the owner should the cohabitation end.
Who is allowed to enter into a Cohabitation Agreement?
Cohabitation Agreements are usually entered into by cohabitees who want to regulate their financial and living arrangements during cohabitation and establish what will happen if the cohabitation was to come to an end. Often, such agreements are entered into by couples who have decided not to marry nor enter into a civil partnership, but have decided to live with one another.
When to enter into a Cohabitation Agreement
Cohabitation Agreements can be executed before or after the cohabitation begins. However if you intend to purchase a property jointly, then it is advisable to have a cohabitation agreement in place prior to completion of your purchase.
Having said, this a cohabitation agreement can be signed after the cohabitation has commenced, although it may be a little more difficult to broach the subject.
The most important thing to consider is that whilst timing is not sensitive, it is more important to ensure that the cohabitation agreement is not signed at a time when one party feels under undue pressure to sign the document, or when they are in vulnerable position. Otherwise, this could result in the cohabitation agreement being voidable.
What are the advantages of having a Cohabitation Agreement?
There are several advantages to having a Cohabitation Agreement, including:
- Helping to avoid the costs and uncertainty of litigation should any disputes arise in regards to the parties’ respective beneficial interests in a property;
- It allows one the freedom to arrange their financial affairs as they wish. Under current law, a cohabitee does not have a right to make a claim for maintenance or for a share of their former’s partners assets. However, a Cohabitation Agreement allows you to make arrangements to financially support a former partner should a relationship breakdown, which is particularly important if there are children involved; and
- Helping preserve and protect your assets.
What are the disadvantages of having a Cohabitation Agreement?
As with everything, there are some disadvantages associated with Cohabitation Agreements, which include:
- An uncertainty as to whether the Agreement will be upheld in Court. However, the general view is that the Agreement is enforceable as long as it is considered lawful, following which it is subject to the rules of contract law. To help give your Agreement the best chance of being upheld, it should always include a severability clause, so that any provisions held to be unenforceable can be removed without affecting the validity of the remaining provisions; and
- Introducing the subject of a Cohabitation Agreement to your partner can be difficult, but ultimately, in the long run, the benefits outweigh the negatives.
What is a Declaration of Trust
If you are thinking about purchasing a home with your partner or perhaps moving into a property which is in your partner’s sole name, you should think about how you would like that property to be owned. There are two ways in which you can legally own a property, either as “joint tenants” or “tenancy in common”, we can help you understand which is best suited to your circumstances. If you are acquiring joint property, you will need to ensure that both of your names are registered on the deeds. Where you acquire property jointly, but you intend to hold the property in unequal shares, say for example, because you have not made equal contributions to it, then you will need a Declaration of Trust to confirm how the property is to be held and in what proportions.
Making a Will
In the absence of a Will, cohabiting couples do not have any automatic rights under the intestacy rules to inherit any part of his or her partner’s estate. The surviving partner might be able to make a claim against the estate under the Inheritance (Provision for Family & Dependents) Act 1975, if no provision has been made, or on the basis that inadequate provision has been made under a Will or by operation of the intestacy rules. However, when making this sort of claim, it is important to note that a co-habitee is not treated in the same way as a spouse.
Should you require any further information or help regarding Cohabitation Agreements, please contact Priya Dhokia, Head of Family & Private Wealth by telephone on 020 7625 6003 or by email email@example.com