When it comes to cohabitation property in the UK, the complexities can be challenging in circumstances of separation, and on death.
A common misconception in law is that there is no such term as a “common law spouse”. We often find clients coming to us using this term and believing that if you live with a person for a certain amount of time, you are automatically deemed as if you were married, and therefore are protected. Sadly, this not the case and often, when clients come to us for advice, it is too late to protect themselves.
The Definition of Cohabitation
In the realm of UK law, cohabitation is defined as the act of living together as a couple in a committed relationship without being married or in a civil partnership. Legal recognition of cohabitation has significant financial implications for couples in the UK.
Rights and Protections for Cohabiting Couples
Cohabiting couples can secure legal rights and protections by creating a cohabitation agreement that outlines their financial arrangements and responsibilities. This agreement can help address the potential financial implications that may arise from the relationship. Without a formal marriage, cohabiting couples don’t have the same automatic legal rights as married couples. Therefore, it’s essential for cohabitants to establish their legal rights through a written agreement.
A cohabitation agreement allows couples to define their financial responsibilities, such as how they’ll share expenses, manage joint accounts, and divide assets in the event of a separation. It can also specify the ownership of property, including who’ll be responsible for mortgage payments and maintenance costs.
Property Ownership and Division
One of the most common issues that arise in cohabitation is property disputes. Unlike married couples who have clear legal rights to property, cohabiting couples don’t have the same level of protection when it comes to property ownership. In the absence of a legally binding agreement, such as a cohabitation agreement or a declaration of trust, disputes over property can be complex and difficult to resolve.
When a cohabiting relationship ends, financial settlements can become a major point of contention. Unlike married couples, cohabiting couples don’t have an automatic right to a share of each other’s property or assets. Instead, they must rely on property and trust law principles to establish their rights. This often leads to lengthy and costly legal battles to determine who owns what and how the property should be divided.
The Position of Cohabiting Couples upon Death
At present, the UK Inheritance Law does not recognise a cohabiting partner as one to inherit a person’s estate – unless a Will is in place.
Therefore, it is crucial that in the event you are cohabiting, and you have joint assets or you are living together as if you were married, Wills should be drafted as a priority.
Without a Will, your cohabiting partner is likely to find themselves without any inheritance including the property depending on how the ownership of the property is held.
In turn, any savings that your partner had put away for the family, if the account is not in joint names, could find its way to direct descendants of the person who has died, who that person may not have necessarily wanted to inherit this asset.
Our specialist Wills and Probate Team are on hand to answer more questions relating to your rights as a cohabiting partner should you find yourself in this challenging situation. There are a few options that can be taken to claim from an estate however it is criteria dependent. Therefore, it is advised that you book in to speak with one of our Solicitors urgently to be able to advise you on your options, as these can have time limits to make a claim against the estate.
Frequently Asked Questions
How Does Cohabitation Affect Inheritance Tax in the UK?
Cohabitation has significant effects on inheritance tax in the UK.
Specific Exemptions that could be utilised and save the estate substantial money in tax, are not applicable to cohabiting couples. It is therefore highly advised to speak to solicitor who can advise you as to how best to estate plan to protect inheritance upon a cohabiting partners demise.
Can Cohabiting Couples Claim Each Other’s Pensions in the Event of Separation?
In the event of separation, cohabiting couples may be able to claim each other’s pensions through nominating beneficiaries through your pension providers. Usually, these pensions do not form part of a persons estate if it is a discretionary pension and therefore, would not be subject to inheritance tax. However, the pension provider can select the beneficiary of the pension and the amount and therefore it is important to consult your provider prior to death to consider your options to protect your cohabiting partner.
Are There Any Legal Obligations for Cohabiting Couples to Financially Support Each Other?
It’s important to understand that cohabitation doesn’t provide the same legal protections as marriage or civil partnerships.
However, depending on the circumstances, one partner may have a legal duty to financially support the other if they’ve children together or if there’s an express agreement or a common intention to support each other financially.
It’s advisable to seek legal advice to fully understand your rights and obligations.
What Happens to Joint Debts and Liabilities When Cohabiting Couples Separate?
When cohabiting couples separate, the division of joint debts and liabilities can be a complex issue.
It’s important to note that without a cohabitation agreement in place, there may be limited legal protection.
However, it’s possible for the couple to negotiate and come to an agreement on how to divide these financial obligations.
In some cases, the debts may be split equally, while in others, one partner may assume more responsibility.
Seeking legal advice can help navigate this process.
