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Many couples live together without getting married or forming a civil partnership. While some people are clear on the implication of cohabitation, many do not realise that there is a lack of legal protection for them in the event one partner dies or the couple separate.
Cohabitants’ rights are more patchy and complex than many think and the law that applies in the event of a dispute can be uncertain and difficult to apply. JMW advises individuals from all types of modern family in a diverse range of situations.
Our clients seek advice on many aspects of family life, including:
- Making arrangements for children after separation
- Alternative families and fertility law
- Entering into prenuptial or pre-partnership agreements
- Cohabitation agreements and deeds of trust
- Shared home and other property disputes
- Financial provision for children under Schedule 1 of the Children Act 1989
Cohabitation and the Law
There is no such thing as a ‘common law spouse’. Even after living together for many years, cohabitants do not acquire any specific rights. However, due to a patchwork of legal provisions and official classifications as to what constitutes as a family unit, the misconception that common law marriage is a specific legal status persists.
Cohabitants can experience hardship if they separate or if one of them dies because they have no automatic right to inherit from each other.
Protecting Your Rights
Whether you are moving in with your partner or you are currently cohabiting, you should make sure your financial rights are protected, particularly if your property is owned rather than rented.
Consider what you would want to happen with the equity in your home and other significant assets if you did split up. If you plan to own a property jointly, the equity would be divided 50/50 in the vast majority of cases, unless the paperwork says otherwise.
If this is not what you want - maybe because you will be contributing different amounts towards the purchase price or mortgage instalments - you need to make this clear in the correct written format.
Provided matters are agreed, your respective shares in a property can be set before or during the period of ownership. We would always advise couples to consider the position before moving in together if at all possible.
Certain written documents can help to reduce some of the uncertainty that may arise in the event your relationship breaks down or one of you dies.
A cohabitation agreement is a legally binding contract entered into by two people who either are or are about to start living together, and sets out their financial obligations to one another. This can be as simple as setting out how the proceeds of sale of a property will be divided if the relationship ends, or as complicated as a lengthy document dealing with all elements of a couple’s financial life together.
An agreement might:
- Deal with how much each partner will contribute towards household expenses
- Clarify the ownership of expensive items, such as cars of jewellery
- Set out how a shared property would be dealt with in the event of separation
The aim of a cohabitation agreement is to reduce the uncertainty that can exist when a couple sharing a home separate.
We regularly draft and advise on cohabitation agreements and can deliver a bespoke solution tailored to the specifics of your family situation.
Declaration of trust
A declaration of trust is a document dealing with the ownership of a specific property. It can be entered into before a property is acquired or afterwards, although the relative shares can only be changed by agreement. The declaration may be part of the transfer document signed when a property is purchased or part of a separate document, depending on the circumstances.
The declaration could say that person A is entitled to a given percentage of the net proceeds of sale and person B is entitled to the rest. Alternatively, it might say that one person is entitled to a set amount of equity with the balance divided in whatever shares you agree. There are many possibilities.
Everyone should have a will. Wills are particularly important for cohabiting families as the intestacy rules do not recognise the position of cohabitants or make provision for children dependent upon the deceased if they are not related biologically or by adoption.
If a person in a cohabiting relationship dies without a will, the surviving partner will not inherit their estate, apart from property owned as joint tenants and policies of which they are a named beneficiary.
The assets may go back to the deceased’s biological family whether or not this is what they wanted. A surviving cohabitant may have no right to any assets whatsoever or have to initiate expensive and lengthy court proceedings.
For more information on making a will, visit our Will Writing page.
For cohabiting couples, there is no equivalent to the comprehensive process for dividing assets on divorce in the event their relationship breaks down. Instead, each disputed asset is dealt with as a separate entity by applying the relevant law on trusts and property.
While the family dynamics may be very similar to those involved in a divorce or civil partnership dissolution case, the relevant law and procedures are not and call for a radically different approach, which has more in common with civil litigation than family law.
Cohabitation disputes can be legally straightforward, for example, if ownership documentation is clear as to how the equity in a property should be divided. However, they can also be extremely complex, particularly when there is a dispute as to what the parties intended and there is no express declaration of trust. Extensive evidence going back many years may need to be assembled and analysed.
The majority of disputes can be resolved by negotiation or through a non-court dispute resolution process. However, where the involvement of the court is needed, we stand ready to initiate or defend an application and ensure that your interests are protected.
As a full-service law firm, we can draw on the expertise of colleagues across a range of legal disciplines, including civil litigation and trusts and estate planning, in order to provide you with a first-rate service.
JMW has experience across a wide variety of disputes between cohabitants, including:
- Joint ownership cases where one party refuses to cooperate in a sale
- Disputes involving loans or gifts made by parents and other relatives
- Sole ownership disputes where one party argues for a financial interest in a property of which they are not the legal owner
- Issues arising between separating cohabitants who have been in business together
My partner and I are splitting up. They don’t want to sell our house and refuse to discuss buying me out. Can you help me?
The majority of disputes of this nature can be dealt with by negotiation, without the need for court proceedings. However, in a small minority of cases, the only way to break the deadlock is to make an application to the court to order the sale of a disputed property and make a ruling as to how the proceeds are to be divided. This is very much a last resort but the option is there to make sure this type of situation does not continue indefinitely.
Do I have any rights if I live in my partner’s home and it is in their name only?
This is potentially a very complicated situation. It is possible for a person who is not the legal owner of a property but has nevertheless made certain types of contribution towards it to acquire a financial interest in it.
If a cohabiting relationship breaks down, and the parties’ respective rights and interests have not been made clear in advance, there can be a high level of uncertainty and, in some cases, expensive litigation can follow. You can reduce this uncertainty by signing up to a cohabitation agreement.
However, if you find yourself in dispute with your former partner, it is important to take early legal advice. Seemingly small actions can assume great significance in disputes over the equity in a home, so it is crucial to establish a clear strategy and avoid pitfalls right from the start.