cohabitation agreement

Cohabiting couple families remain the fasting growing relationship in the UK, but many mistakenly believe that they have the same legal rights as married couples in critical areas such as savings, income, pensions or business interests.

In fact, cohabiting couples are the second largest family type after married or civil partner couples, but the law does not offer them any protection should their relationship turn sour and separation becomes inevitable. 

Below are some of the questions we are asked by cohabitees:

My partner and I are thinking of living together. Is there anything we can do to protect ourselves should we split up?   

A cohabitation or ‘living together’ agreement, to record who owns what at the outset, provides some security to unmarried partners. It encourages people to think clearly about what they want to happen not only while they live together, but also if their relationship ends, setting out who owns what – and in what proportion.

Cohabitation agreements set out how you will divide property (as well as paying off debts), personal belongings, savings, pensions and other assets should you split up – along with how your children will be supported, plus how to deal with bank accounts, debts and joint purchases such as a car. They can also cover more day-to-day matters including pets.

It is important that each party seeks independent legal advice and discloses all financial information in the lead up to signing the agreement, which should be reviewed regularly.

Can a cohabitation agreement be set up while we’re living together?

Yes. It can be drafted either prior to or during your time together. It can also be amended, as long as both parties agree that the original agreement should be changed and how. 

I’ve paid into our mortgage for many years, but the property is in my partner’s name. What happens if we go our separate ways? 

Cohabitation gives no automatic rights to the home you share if the property is solely in your partner’s name.  It doesn’t matter how long you have lived there. However, if you can show that you have contributed to it and there was ‘an intention to share’, you may be able to make a claim. This is a very complex process, though – and legal advice is essential.

Relating to the above, what happens if my partner dies?

If they die either without having made a Will, or having made one, without making reasonable provision for you, as the surviving partner you would have a potential claim as a cohabitee – providing you have lived together for at least 2 years ending with date of death.

Under current law, if you cannot satisfy the 2 year requirement, you may be able to make a claim on part of your deceased partner’s estate as a dependent. It is important to bear in mind that a dependent’s claim ranks lower in priority than the cohabitee’s claim.

If your partner dies without making a will, the law says that a property in their sole name – or their share of it – must go to their next of kin.

First among these are any spouse, and then any children, followed by the next closest group of living relatives. You will not be a surviving spouse for pension purposes as you were not married. You might be able to make a claim against your deceased partner’s estate if they have not made reasonable provision for you, and subject to other conditions imposed by law.

To avoid this potential issue, you and your partner should make wills and/or consider transferring any property into joint names.

About Liz Bell

Representing clients across the UK and overseas, Elizabeth’s expertise spans wide-ranging financial disputes.

Her track record includes complicated high value cases involving company structures, trusts, offshore assets and jurisdiction issues.

Elizabeth Bell

Feature photo credit – photo credit: naiaraback1 via photopin (license)

The myth of common law marriage rights

Many couples prefer to live together in a committed relationship without getting married.

They assume that living together for a long time gives them the same types of legal right and responsibility to each other as marriage, such as entitlement to the other’s estate if he or she dies; a share of property on separation; and parental responsibility.

However, it doesn’t.

In the UK, the law does not recognise the concept common law marriage (with the exception of Scotland, where cohabiting couples have some basic rights if they separate).

For the most part, it treats you as two individuals – bank accounts, possessions and property held in one name belong to that person and assets held in joint names are held equally.

The misconception that there is common law marriage can be devastating if you separate or if one of you dies.

One person may find that his or her wealth is far less than thought; an assumed inheritance might be passed on to the deceased’s other family members; and both people may still have responsibilities for children – even if only one of them is a biological parent.

Cohabitation Rights

Living in a property does not give you rights to ownership or to stay.

• If the property is rented

Only the people named in the tenancy agreement have the right to live there, and only during the tenancy.

If you move in with your partner into his or her rented home, then you have no rights to stay there if you break up. That applies even if you give your partner a contribution to the rent.

Additionally, your partner can ask you to move out at any time, without any notice period.

This situation changes if you become a tenant yourself.

You are likely to need the landlord’s permission to live at the property for a significant amount of time, and he or she is likely to ask you to become a tenant.

Most landlords insist that rent is paid jointly and severally – in other words that the tenants together are responsible for paying all the rent. If you are a tenant and this is the case, then you are still liable to pay the rent even if you move out. Only ending the tenancy ends your responsibility.

• If one of you owns the property

The person who owns the property has the right to make any decision about who lives there or what happens to it.

He or she can ask you to move out at any time, or could sell it, or could change it in any way.

The exception is where there has been a prior agreement or understanding that the non-owner is entitled to a share of the value of the property, perhaps only in certain circumstances, or as a result of certain actions (such as contributing financially to a mortgage repayment or spending time renovating the property). The agreement ideally needs to be in writing so that neither party can later dispute it.

A court may also decide that a parent has a right to live with a child in a property owned by the other parent in order to ensure the welfare of the child.

• If both of you own the property

If you both own the property, then you both have rights to live there. One of you cannot force the other to sell unless he or she applies to the court for an order.

The share of the property that you own will be determined by whether you own it as “joint tenants” or “tenants in common”. You can read a longer explanation of the difference between these terms, but in short, if you are joint tenants, you are usually entitled to receive half of the proceeds on sale, and if you are tenants in common then you receive whatever share you pre-agreed that you own. How much you contributed often has no influence on how much you own.

If you applied for a mortgage in both names, you will still be liable for repayments even if you do not live at the property. The same usually applies for household bills in joint names.

• Financial support

Cohabiting couples have no responsibility to support each other financially, or to support each other after separation.

If both people have legal responsibility for any children in the relationship, then one or both may have to make contributions to the other for the welfare of the children.

• Ownership of possessions

Just as with ownership of a house or flat, ownership of smaller possessions is unaffected by whether you live together or not.

If you buy something with your own money, or if you owned something before the relationship started, it remains yours throughout the relationship and after separation.

If your partner gives you a gift, you own it. Sometimes, however, it is difficult to prove it was given as a gift.

If you buy something together, in most circumstances you would own it in shares to which you contributed to the price, unless you agree otherwise.

Money in joint bank accounts, and joint debts are owned equally. You are both equally responsible for repaying the amount owed, and have equal right to spend the jointly owned money.

• On death

If one of you dies without having made a will, then the rules of intestacy apply.

The consequence might be that the surviving partner receives very little from the estate.

Jointly owned assets automatically become the property of the other without being included in the estate. So if you own a house as joint tenants together, the other will automatically become the sole owner of it all.

However, savings and investments (including life insurance) in the name of the deceased might not pass to the partner.

A partner may be able to claim in court that he or she was a financial dependent and that the will should be varied in his or her favour. However, this is costly and may not succeed.

The best way to make sure your estate is passed on to the people you want to inherit it is to make a will.

Written Cohabitation Agreements

A written cohabitation agreement can help in a lot of ways to avoid problems on separation or death.

It is a formal legal agreement between both the partners that sets out the rights and responsibilities of each partner and who owns what. For example, an agreement might cover:

• how much each partner contributes to joint living costs
• which assets remain the property of one alone
• how ownership of other assets is divided
• draft arrangements for any children in the case of separation (although a court may vary these)

About Thomas:

Thomas Taylor is a director of Net Lawman, a legal document template retailer. He writes about a variety of subjects relating to personal law, including living together, separation and divorce.

You can follow other articles on Twitter @NetLawman.

In January of this year, a heterosexual couple lost their court case in which they argued that opposite-sex couples are being subjected to discrimination as, unlike same-sex couples, they do not have the choice to enter into a civil partnership instead of marriage.

At present, same sex couples who wish to formalise their relationship and thereby obtain a legal status entitling them to financial protection and benefits, can choose between civil partnership or marriage.

Heterosexual couples need to marry in order to obtain that same financial protection.

The court found that the law as to civil partnerships was not discriminatory as the couple could marry if they wanted to achieve the rights, benefits and protections that flow from a formal recognition of their relationship.

Precarious Position of Unmarried Couples

The case once again highlights the precarious position of unmarried couples compared to married couples (or same sex couples in a civil partnership).

Unmarried couples should understand that if their relationship breaks down:

• They cannot claim maintenance from the other person, other than maintenance for the support of the children. Compare this to married couples where, on divorce, a spouse can claim maintenance for his or herself as well as maintenance for the children.

• There is no right to remain in the family home or have a share of its value if the property is held in the other person’s sole name. This is unless the non-owner can show they have made a direct financial contribution towards its purchase or there was a clear understanding that they would be entitled to a share of its value. The onus is on the non-owner to provide evidence to this effect.  Claims can be made on behalf of any children still in full time education, but any capital settlement for the children usually has to be returned to the paying party when the children have left their full-time education. Therefore, in a situation where one partner has moved into a property owned by the other and they have been in a relationship for many years, have had children together and those children have now left home, the non-owning partner may struggle to have any share of the value of that property, or any financial entitlement.

• There is no entitlement to a share of pensions or any other savings or investments in the other person’s name, no matter how long the relationship has lasted.

• If one partner dies, the other would have to pay inheritance tax, there is no relief as there is for married couples.

Is there anything unmarried couples can do to protect themselves?

Taking legal and financial advice when you buy a property or move in together can help avoid coming unstuck should the relationship end or one party dies unexpectedly. Lawyers can prepare deeds of trust to record beneficial interests in property, cohabitation agreements and wills.

However, at present, unmarried couples of the opposite sex continue to have a very different legal status from those who decide to marry, and civil partnership remains exclusively for same sex couples.

Guest post written by Sian Winter of Woolley & Co. Solicitors, originally published here 

More people than ever before are choosing to live together without ‘tying the knot’ – as reinforced by research from the ESRC Centre for Population Change.

Yet, with Relate reporting that separation among cohabiting couples is running neck-and-neck with the divorce rate, it is vital that they know the legal ramifications of their status and are not left disadvantaged by it.

Despite the government’s attempts at promoting marriage and civil partnerships, it is estimated that around six million people in the UK now simply live together – with the numbers set to rise, according to reports from the Centre of Social Justice.

However, these couples have no legal status and, contrary to popular belief, ‘common law marriage’ is not a legal entity.

Whereas there are clear rules in England and Wales regulating the finances of divorcing couples – and who gets what when a spouse or civil partner dies – there is no provision for live-in partners.

There are no specific laws to protect separating cohabitees and they usually have no automatic entitlement to anything upon the death of their partner, no matter how long they have lived together.

The death or separation of a cohabitee can therefore lead to some knotty legal complications that the law is poorly equipped to address at present. This can result in expensive litigation to resolve them, often based on complex property and trust rules – which can in turn result in outcomes that neither party necessarily intended.

There is, however, a simple, relatively inexpensive solution to all of this, albeit a little known one.

For while increasing numbers of couples are entering into pre-nuptial agreements before marrying, to plan in the best of times for what should happen in the worst of times, many cohabiting couples are unaware that they can do something similar.

Having a cohabitation agreement in place could avoid financial and emotional trauma later on.

This can give both partners peace of mind by making clear in the case of a split or death:

• Who will own the home you live in or intend to live in – and, if jointly, the shares
• Who will pay the bills, including any improvements or renovations to the home
• What will happen to the property if the relationship ends or should one of you die
• Whether the survivor can stay in the property after the death of the other and, if so, for how long
• How any children, including those from previous relationships, will be protected financially

The first step is to make contact with a legal practice with an experienced, respected team of family and will and estate planning specialists to discuss your specific circumstances and what you need to consider.

Acknowledged the latest Legal 500 2015 Guide as ‘Extremely bright and resourceful’, Vanessa has amassed almost three decades of experience in family law and has been head of the family law team at Keeble Hawson since 1991.

An accredited mediator, Vanessa is also a Resolution accredited expert and has been Chair of South Yorkshire Resolution since 2013.

A member of the Law Society’s Children’s Panel, Vanessa receives instructions from Children’s Guardians. She is also accredited by the Law Society Family Law Panel.

Vanessa’s work is typically characterised by sensible and practical advice that supports a speedy and pragmatic resolution.