According to the Office for National Statistics the number of cohabiting families increased by nearly 30% between 2004 and 2014. Despite cohabitants being the fastest growing type of family in the UK, cohabiting couples do not have the same rights as married couples when the relationship breaks down, even if they have been living together for a number of years and there are children of the relationship.
Contrary to popular belief there is no such thing as a ‘common law wife/spouse’ and as such there is currently no law in the UK that cohabiting couples can turn to when their relationship breaks down and there are financial matters to deal with. This blog sets out a brief summary of what you need to consider if you are thinking about living with your partner, however you should contact us for more detailed advice.
If you are considering purchasing a property with your partner you are strongly advised to have a declaration of trust in place, which will clearly set out what each of you owns in respect of the property and what you will receive if the property is sold. Such a document is legally binding. A declaration of trust should also be considered if one partner owns the property and the other partner is contributing to the mortgage payments, utilities, etc and it is intended that they are to receive a share of the property when it is sold.
You should be aware that there are two ways in which you can jointly own a property. If you purchase a property as joint tenants, if one partner dies their share of the property will automatically pass to the other partner. Alternatively, if you purchase a property as tenants in common, unless otherwise agreed, it will be presumed that you each own a 50% share of the property. In this situation if one partner were to die, their half share would pass under the terms of their Will (if they have one) and will not automatically pass to the other partner. Therefore, if you own a property as tenants in common, it is vital that you draw up a Will if you want the property to pass to your partner in the event of your death.
If you are thinking about living with your partner we would advise that you contact us to draw up a cohabitation agreement or living together agreement. A cohabitation agreement will set out the assets of each party and how they should be divided if the relationship ends and includes property, personal belongings and savings. It can also set out your rights and obligations towards each other e.g. responsibility for paying bills, joint accounts and how the household is run. Although a cohabitation agreement is not approved by the Court it may be taken into account if both parties have sought legal advice, there is an honest and full disclosure of assets and both parties enter into the agreement willingly. Entering into such an agreement at an early stage will avoid the need for lengthy and expensive litigation should the relationship break down.
If you are thinking about cohabiting, contact us for further guidance and advice on what steps you should take to protect your interests including entering into a cohabitation agreement.