It is becoming increasingly common that couples live together and start families without first getting married. Many couples live together for years under the assumption that, given the duration of their relationship, they will automatically obtain the same kind of rights that might be expected if they were married.
This is not the case, and the reality can be surprising to those couples when they find out that there is no such thing as a ‘common law marriage’ and only make this discovery when the relationship has broken down and discussions as to the fair division of property are taking place.
Married couples who divorce are legally entitled to make financial claims on the other person’s assets by virtue of the marriage. This does not apply to those who only cohabit. For example, on the breakdown of the relationship, if one person is living in a property owned in the sole name of their partner, they will have no entitlement to remain living there and the owner has no obligation to share any sale proceeds. On the other hand, in a divorce it is possible for the court to reallocate assets to address any imbalance and fair provision can be made during resolution of the finances, even if the parties don’t agree.
Only in a divorce can one party apply to have provision made for them out of the other’s pension. Cohabiting couples have no such right. It is therefore important that unmarried couples plan for the worst and consider their future retirement bearing in mind that their relationship could break down. It is of particular importance where one party has chosen to stay at home to raise a child. This choice may limit their future earning potential and affect the size of their pension pot.
Where children are involved, couples should also consider their legal positions in relation to the care of the child. Having a child with your partner does not afford you all the rights that a married couple would have. A father married to the child’s mother at the time of birth will automatically have parental responsibility over the child, whereas an unmarried father who has not been put onto the birth certificate would have to enter into an agreement with the mother or apply for a court order.
In addition, upon separation a married couple will have obligations to provide maintenance for both their partner and the child; however an unmarried couple would only have to provide maintenance for the benefit of the child.
It is also essential for unmarried couples to consider what would happen if their partner unexpectedly dies. There is no automatic entitlement to inheritance from the partner’s estate for unmarried couples. If one partner happens to die, the survivor will only receive something if provision in the deceased’s will has been made. For example, if an unmarried couple owned a property as tenants in common, the proportion of the property owned by the deceased will pass to their estate rather than to the survivor. It is possible to make applications to court so that provision is made for the survivor, however there is no certainty and there can be considerable cost.
It may seem bleak for couples who do not wish to get married; however they do have options to ensure an amicable separation. It is possible for couples to enter into a cohabitation agreement which will be binding on them and will establish the terms on which money and property are divided if they do decide to separate. It is then possible for a court to enforce these terms in the event that the split is not cordial. Long term partners should also ensure that they have a will in place or that it is updated to take their partner into consideration.
If you would like to discuss putting a cohabitation agreement in place or setting up a will, please contact a member of the Family team or Private Client teams in on of our offices, Bedford – 01234 270600, Cambridge – 01223 411421, Sandy – 01767 680251 or Milton Keynes – 01908 202150.