The number of people choosing to live together (cohabiting) rather than get married is becoming more popular. As of November 2019, there were 3.5 million* cohabiting couples in the UK and this number is only going to rise.
Family Solicitor, Elizabeth Dowler dispels some of the long standing myths that surround the concept of cohabitation and the ‘common law marriage’
Myth: Unmarried couples who live together benefit from a ‘common law marriage’.
Truth: There is no such thing as a “common law marriage”, irrespective of how long an unmarried couple have lived together.
Myth: After living together for more than two years, unmarried couples have similar rights to married couples if a relationship breakdown.
Truth: Unmarried couples do not have the same or similar rights as married couples do. Married couples have automatic financial claims, whereas cohabiting couples do not; this is regardless of the duration of their relationship and if it ends or one party dies.
The current law regarding cohabitation is out of date and fails to provide any real protection for cohabiting couples. It takes no account of changing family structures and so irrespective of whether cohabitants have made career or financial sacrifices to have children there is very limited protection to ensure they are not disadvantaged.
Examples of where cohabitants are disadvantaged in circumstances where a married spouse would have protection include:
- Financial claims upon relation breakdown: married couples have an automatic right, cohabiting couples do not.
- Entitlement to partner’s assets under intestacy rules upon death: married couples have an automatic entitlement to inherit, cohabiting couples do not.
- Tax exemptions for Capital Gains Tax, Inheritance Tax and Stamp Duty Land Tax: married couples have access to tax exemptions on the transfer of assets in a range of situations, cohabiting couples do not.
- Obtaining a survivor’s pension: there is no requirement of nomination for married couples, however there is an absolute requirement of nomination for cohabiting couples.
Steps to take
Whilst cohabitants are not provided automatic, full protection by the current laws, there are steps that can be taken to safeguard the position. These can include:
- Cohabitation Agreement. Covering matters relating to property, finances and children this document sets out certain agreements and intentions to be relied upon both during the relationship, and upon relationship breakdown to provide ongoing security to both parties
- Deed of Trust. Where cohabitants own joint property, a deed of trust can provide protection to parties who have contributed more into the purchase of a property.
- Will. Cohabitants do not automatically inherit some or all of their partner’s estate upon death, where there is no Will present. To ensure that their partner inherits upon their death a Will needs to be put in place to confirm this.
Where the cohabitants have children together, financial claims can also be brought for the benefit of the child under Schedule 1 of the Children Act 1989. Under this Act, a parent can make an application for a lump sum, and settlement or transfer of property order, in addition to (limited) claims for child maintenance and a carer’s allowance.
What does the future hold for cohabitants?
A growing number of legal professionals and politicians are of the view that the laws on cohabitation need to be reformed in line with the changes to society. It is hoped that the impact of COVID-19, might accelerate the process and finally the outdated laws will be overhauled.
No one enters a relationship thinking it will break down but until the laws on cohabitation are updated, any couples living together should take steps to protect themselves.. Speak to Elizabeth today on 01225 750 000 or email Elizabeth.email@example.com .