…so why is there still so much misunderstanding about each partners’ rights?
The number of cohabiting couple families has soared by 22.9% over the past ten years to 3.6 million according to the Office of National Statistics. Despite this, there is still a lot of confusion around their rights. Many couples still believe that if they live together for a certain period of time or have children together, they are in a ‘common law marriage’ and will have the same rights, if they separate, as they would have had if they’d married. However, as B P Collins’ family team wish to make very clear, this is not the case in England and Wales. In fact, couples living together don’t currently acquire rights automatically.
Sue Andrews, a partner in B P Collins’ family practice explains:
“Couples who live together never acquire the same financial rights and responsibilities, no matter how long they are together and regardless of whether or not they have children.
If you own a property, are moving into a partner’s property or purchasing a property together, you should think carefully about your respective interests in that property. It might seem unromantic at the time, however thinking about this early on should avoid, at best, disagreements and, at worst, legal proceedings if things do not work out between you both.
Be frank with one another
Where someone moves into a property owned by the other, there should be discussions about whether the non-owner should acquire an interest in that home and, if so, what and in what circumstances.
If a property is being purchased matters to consider include – is it to be bought and owned by one of you or both? If not, what are you each to contribute and are your shares to be equal or in line with your respective contributions to the purchase price? You should set out in a document how that property is to be owned. It could be changed over the years if, for instance, one of you reduces the mortgage borrowings or pays, from their own funds, for an extension or other works, which would impact upon the value of that property.
Documenting your agreement should avoid a bitter dispute if the relationship breaks down and your then former partner seeks to claim an interest in your home perhaps because of monies he or she paid or because he or she carried out works on the property.
Key agreements to choose from
Legal advice is important because each couple is different and there are a number of agreement options. If a property is owned by one person and the other is not to acquire an interest, a solicitor is likely to suggest
a simple and relatively inexpensive deed of waiver to record your agreement that, regardless of payments that the non-owning person makes or work undertaken, they are not to acquire an interest in your property.
However, if it is agreed that they are to acquire an interest or in the event of a new property being purchased, then a declaration of trust can be prepared to record what is agreed about what each person’s interest is intended to be, or might become over time, subject to payments being made or work undertaken.
Another option is a cohabitation agreement. This is a lengthier document and is likely to be suggested if a couple want to record their agreement about matters over and above property ownership. It could deal with for instance who pays what bills and childcare or petcare arrangements. We have also been asked to include very specific things such as who has control over the TV remote, who puts the bins out or how the household chores are distributed – anything can be included!
Make a Will
As cohabitees do not have automatic rights to inherit, you should also consider making a Will.
People often feel uncomfortable about bringing up these matters. However you both need clarity and certainty and your partner should not be offended if you want to safeguard a property you already own or which you may be about to purchase with your own funds after receiving a significant gift or an inheritance from a loved one.
The options above will provide reassurance to both if the relationship comes to an end or in the event of one partner dying.
And if you later decide to marry, the marriage does create legal rights and obligations, and a prenuptial agreement could be considered.
It is important to note that these types of agreements and arrangements are not just for the wealthy. It is sensible to have this sense of security in relation to a home, regardless of its value and to avoid potential future conflict.”