There are more than six million cohabiting couples in the UK right now and that number is rapidly rising.
Millions of cohabiting households will have children together or share a mortgage, yet have nothing in place to protect their property or finances should they split up. A break-up could be messy and end up costing the parties huge costs and risk individuals losing everything they thought they had..
In a recent report, 1,000 couples were asked why they had no protection in place, with over a third saying they trusted their partner would give them a financial contribution. Trust and romance is wonderful – until there is a break up!
There also appears to be a general misunderstanding of what rights people have, with many assuming they are automatically entitled to their fair share if the relationship breaks down. They could not be more wrong.
With the average UK house price around the £227.000 mark, not putting protective measures in place could cause significant financial problems later down the line should the relationship not work out.
What are your rights?
The legal system in England and Wales treats unmarried couples as separate individuals, meaning in the event of a split, any assets remain in the ownership of the person whose name they are in.
Assets in joint names will be divided equally unless there is clear evidence that the parties have agreed on something else This is also the case for any shared property. Much depends on intentions and can be difficult to prove.
In addition to restricted property rights, unmarried couples do not enjoy the same rights as spouses regarding death or financial arrangements such as maintenance. There is no right to maintenance for a co-habitee unlike a spouse.
If one co-habitee dies while living together, the other has no entitlement unless there is a will in place.
The only good news relates to children. Maintenance is payable by the non-resident parent through the Child Maintenance service in the same way whether the parents are married or not. However property and capital provision for children is more limited.
What protection is there available?
The solution to all these problems is simple. A cohabitation agreement is a legal contract for unmarried couples, which covers everything from who owns what, to how you will divide assets in the event of a split and also any child arrangements. If a property is being purchased, a declaration of trust should always be prepared to define the cohabitant’s shares in the property. It is particularly important for cohabitants to make Wills because if there is no Will in place, the surviving cohabitant will have no entitlement at all.
For more information about cohabitation agreements, please contact our family law team today.