Family relationships have changed significantly in recent years, with more couples choosing to live together but not get married. Cohabiting couples are now the fastest growing family type in the UK, but in England and Wales they have little legal protection, and there is no safety net in place to protect those who are left vulnerable following separation or death.
Contrary to popular belief, there is no such thing as a common-law husband or wife under English law. No matter how long cohabitees live together, the law (as it currently stands) does not give cohabitees a right to financial support or a share of their partner’s assets when the relationship breaks down. Unless they hold assets in joint names (or they have a child and the ability to make financial claims for the benefit of that child), cohabitees have no guaranteed rights to property or savings if they separate. They also have no rights to benefits under the deceased’s pension funds or life insurance policies, if the relationship ensues but one of them dies.
Understanding this now – and taking steps before a problem arises – can save financial and emotional distress later.
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Key steps for protection
1. Clearly document property arrangements and contributions by third parties
A declaration of trust is strongly recommended in all circumstances of property ownership for cohabitees. This document formally records each partner’s share of the property and what happens on a sale or separation.
Contributions by parents, grandparents, or other third parties, and the basis of the contribution – whether a gift, a loan, or the purchase of an interest – should be established and recorded in writing.
2. Enter into a Cohabitation Agreement
It is strongly recommended that couples who intend to live together (whether the plan is for one of them to move into a property owned by the other, or for them to purchase a property together) have a Cohabitation Agreement.
A Cohabitation Agreement records their respective rights and responsibilities in relation to property, household contents, pets, day to day living expenses and other financial arrangements during their cohabitation, and if they separate.
3. Make a Will and Lasting Power of Attorney
Cohabitees do not automatically inherit from one another, so making a Will is essential.
Cohabitees should ensure that their partner can take decisions about their property and finances and/or health and welfare if they lose mental capacity, by making a Lasting Power of Attorney.
Cohabitees should also be aware of the significant difference in the tax treatment between married and unmarried couples.
4. Review pension and life insurance/death in service arrangements
Pension and life insurance/death in service beneficiary nominations should be reviewed and kept up to date.
5. Act quickly
On the breakdown of a cohabiting relationship, parties should act quickly. It may be necessary to protect their interest in a property by registering a Restriction or Notice with HM Land Registry promptly after separation.
Disputes over property brought under the Trusts of Land and Appointment of Trustees Act 1996 are heard in civil courts (unless consolidated with financial proceedings relating to children) where costs consequences can be severe. Early advice and exploring non-court dispute resolution options such as mediation can help manage costs and keep matters private.
Legal advice
If you have a client or contact who is moving in with a partner, already cohabiting, or facing a separation, they should be encouraged to seek legal advice sooner rather than later. The right documents, put in place at the right time, can make an enormous difference.
Sheridans Solicitors LLP trading as Sheridans is a limited liability partnership, registered in England and Wales with registered number 8011321 . The registered office is Sheridans, 76 Wardour Street, London, W1F 0UR, United Kingdom. Sheridans Solicitors LLP is regulated by the Solicitors Regulation Authority of England and Wales with registered number 55137. We use the word 'partner' to refer to a member of the LLP, or an employee or consultant who is a lawyer with equivalent standing and qualifications. A list of members' names and a list of those non-members who are designated as partners is open to inspection at the registered office. VAT no. 232728372.
