Cohabiting Couples – what are your legal rights?
The Office of National Statistics estimates that, in 2021, 22% of couples who lived together were not married or in a civil partnership. In this page (for ease of reference) we will refer to such couples as ‘co-habiting couples.’
Common Law Marriages – myth or fact?
There is a common misconception that co-habiting couples have a ‘common law marriage’, and a belief that living together for a period of time results in legal rights similar to those of married/civil partnered couples, when that is not the case. In fact, many areas of the law in England and Wales do not currently make the same financial provision for co-habiting couples as they do for couples who are married or civil partners. It is therefore important for co-habiting couples to understand these differences as resolving them at the end of a relationship, whether by separation or death, can be costly and time-consuming.
A living together agreement or cohabitation agreement document can be very helpful when it is drawn up at the early stages of a relationship whilst things are positive between the co-habiting couple.
These types of agreement can clearly set out what both people want to happen during and, at worst, at the end of their relationship as far as:
- Property ownership
- Who paid the deposit towards a property?
- Who is paying towards the mortgage and household bills?
- Arrangements for children
- Other assets (e.g., jewellery, artwork, cars)
- Money in bank accounts/ savings
It is possible to make a co-habitation agreement at any stage, however, it is usually preferable to do so before you move in together. It is also worth considering preparing or reviewing a co-habitation agreement upon the occurrence of significant life events, such as getting a mortgage or having children. A co-habitation agreement can also be prepared for people living together who are not in a relationship, e.g., friends or siblings.
When drawing up a co-habitation agreement, both people would ideally need to seek independent legal advice, as doing so often will give the agreement more weight in circumstances of it being challenged legally in the event of the relationship breaking down, illness or the death of a party. Financial disclosure can also be exchanged when preparing a co-habitation agreement and the document should be fully executed. A co-habitation agreement may be upheld by the court in the event of a dispute especially if it is found to be reasonable and accurate and properly signed.
The Family Team is able to assist and advice with the preparation of co-habitation agreements, and will ensure that each client is provided with advice that is tailored to their specific circumstances.
Co-habiting couples and property
It is vital for co-habiting couples who buy property together to consider:
- what financial (and other) contributions they will be making to property; and
- how their share in the property will be recorded and protected.
For example, sometimes a co-habiting couple will live in property which is solely owned by one partner. However, it is possible for the non-owner partner in the co-habiting couple to acquire a beneficial interest in a property owned solely by their partner over a period of time e.g. by contributing financially to the maintenance of the property or mortgage payments.
However, a co-habiting couple is more likely to own property together in one of two ways:
- jointly; or
- as ‘tenants in common’.
If a co-habiting couple owns a property jointly, on the death of one partner, the other partner will automatically receive their deceased partner’s entire share of the property and it will not form part of the deceased’s partner’s estate.
A tenancy in common allows co-habiting partners to ‘ringfence’ their respective shares in the property and allow these shares to pass to their respective estate on their deaths. For example:
- C and D are a co-habiting couple who buy their home for £500,000. C contributes £300,000 and D pays £200,000. They decide to own the property in unequal shares of 80% (C) and 20% (D) to reflect their different financial contributions and they record this in a legal document called a declaration of trust.
Common problems which can prompt disputes between a co-habiting couple about the ownership of property include:
- the relationship ends and one partner refuses to leave the property;
- the relationship ends and they disagree about what shares of the property each should currently own;
- the current ownership of the property does not reflect what was originally agreed or intended when they purchased it;
- one partner (who is not named as an owner of the property) has contributed towards the property financially over a period of time; and
- they own the property as tenants in common, but there is no declaration of trust, and it is now unclear in what shares a property is owned.
The Trust of Land and Appointment of Trustees Act 1996 (“ToLATA”) can assist to resolve some disputes when a co-habiting co-own a property. A ToLATA claim might be issued by one partner in a co-habiting couple to:
- ask the court to determine what shares in the property each owns;
- obtain an order for (or to prevent) the sale of land or property which is co-owned; or
- decide who should live in the property.
An unmarried couple with children can also make an application to the court under Schedule 1 of the Children Act 1989 for the Court to make provision for children aged under 18 years. This could include an order for the transfer of property, the payment of a lump sum or permission one parent to remain in the co-owned property until the child reaches 18 years old.
We provide specialist advice on bringing or defending ToLATA claims.
Co-habiting couples and joint bank accounts
Co-habiting couples often have joint bank/building society accounts e.g. an account which is held in their joint names to pay household bills or a mortgage.
Although, joint accounts can be useful, they can also prompt disputes about who owns the funds held in the account, or how those funds are used, especially when one account holder dies or when the relationship between the joint account holders breaks down.
Problems can also arise if anyone named on the account can withdraw money and the joint account funds are misused, or if the account holders have made unequal contributions e.g. one partner in a co-habiting couple pays their monthly salary into the account and the other partner pays in £30 per month.
What happens when joint account holder dies?
If one joint account holder dies, the joint account funds will usually automatically pass to the surviving account holder by ‘survivorship’. This means that none of the money in the joint account will pass into the deceased account holder’s estate. This can be problematic if the surviving account holder has:
- paid nothing into the account;
- has paid in less money than the deceased account holder; or
- the deceased account holder wanted part (or all) of the contents of the joint account to form part of their estate.
For example, in Drakeford v Cotton  EWHC 1414 (Ch) a dispute arose over who would receive the funds held in two joint accounts. Mrs Cotton and her daughter, Mrs Stain, held two building society accounts containing £51,000 which was paid in by Mrs Cotton. Mrs Stain made no financial contribution to the accounts.
After Mrs Cotton died, the usual position would be that Mrs Stain would receive all the funds in the joint accounts. There was a dispute about whether Mrs Stain should receive the monies, or whether the funds should be shared equally between Mrs Cotton’s three children under her will.
The parties agreed that the accounts were used for convenience to pay bills, but Mrs Stain claimed that Mrs Cotton had later gifted the funds held in them to her during her lifetime. Mrs Cotton’s other daughter, Mrs Drakeford, claimed that Mrs Stain was only a signatory on the account, and she was not entitled to the funds.
The High Court held that the accounts were originally held for Mrs Cotton’s sole benefit. However, from 2008 onwards, Mrs Cotton had changed her intention, so that the funds were (from then on) to be held by Mrs Stain and Mrs Cotton on a joint basis. This meant that they should pass to Mrs Stain after Mrs Cotton’s death and the joint account funds did not form part of Mrs Cotton’s estate.
Avoiding disputes about joint banks accounts
The simplest way to avoid any issues with joint bank/building account is for co-habitees to hold their funds separately. However, that that may not always be either practical or possible. If a cohabiting couple have any joint accounts, they should consider:
- documenting their intentions such as in a cohabitation agreement i.e. who owns the contents of the joint account (and in what shares) and how the funds should be used;
- how the joint account may be dealt with for Inheritance Tax purposes, in the event of one joint account holder’s death;
- whether any restrictions should be placed on the account e.g. requiring both account holders to authorise any withdrawals/payments; and
- what each joint account holder wants to happen to the joint account in the event of one account holder’s death.
Our CWTE Team advises about disputes involving joint bank accounts after death. If you have an enquiry about a joint back account, please contact us at: [email protected]
Co-habiting couples and pensions
Co-habiting couples are not entitled to any state pension money after their partner passes away, unlike civil partners and married couples who are able to inherit part of their partner’s state pension.
With workplace pensions, most pension providers will provide you with the opportunity to nominate who they would like to receive any pension benefits after death, however, married couples will have an automatic right to benefit from their partner’s pension, but unmarried couples will only be able to benefit if they are nominated or the pension fund is with certain employers who will recognise co-habitants.
Please do not hesitate to contact the Family Team if you have any queries relating to pensions.
Co-habiting couples and child arrangements
Disputes also arise between cohabiting couples in relation to children when they separate. Please note there are a wide variety of orders and provisions around this area of law so only a brief outline is provided here.
If the father of the child is named on the child’s birth certificate, he will share parental responsibility with the mother. The father cannot register the birth alone, but the mother can.
The court has the power to make Child Arrangement orders to regulate with whom a child is to live and spend time with which might extend beyond parents to stepparents, grandparents, adult siblings and onwards depending upon the relationship in question. It is usually preferable that the parents decide these arrangements between themselves and there are a wide range of non-court methods to try and sort them out too such as family mediation and arbitration.
The court also has the power to make orders to determine a specific question in relation to a child for example a change of name, which school(s), vaccines and medical treatment or relocation elsewhere (UK or worldwide).
Where parents have separated, whether married or not, child support payments are generally dealt with by the Child Maintenance Service. However, there are additional provisions for financial support of a child over and above that basic CMS provision which we can advise upon.
Our Family Team is able to advise and assist in relation to disputes relating to the practical and financial arrangements for children.
Co-habiting couples and Inheritance
Co-habiting couples should understand how their assets will be dealt with in the event of the death of one partner in the couple, and what financial provision may be made for the surviving partner.
If a person dies without making a will this is known as intestacy, and their assets will be distributed under the Intestacy Rules. The Intestacy Rules make no provision for co-habiting couples. If one partner in a co-habiting couple dies intestate, their surviving partner will not automatically be entitled to receive anything from their deceased partner’s estate. This applies even if the co-habiting couple have lived together for many years or have children. Intestacy can therefore create financial problems for the surviving partner, for example:
- A and B are a co-habiting couple who have lived together for 7 years. They have a mortgage and they each own equal 50% shares in their home (which will fall into their respective estates if either dies). They have no children, and A has been estranged from his parents for 10 years. He has does not want them to benefit from his estate.
- A dies intestate, so B is not automatically entitled to any part of A’s estate. Under the Intestacy Rues, A’s estate will be divided between A’s parents in equal shares. A’s parents now want to sell A and B’s home to obtain A’s 50% share. B cannot afford to ‘buy out’ A’s share.
It is therefore important for co-habiting couples to consider making wills, and to also review and (if required) update them as their circumstances change e.g. if they have children or buy a home together. We have also outlined below one potential remedy for a surviving partner below.
Inheritance (Provision for Family and Dependants) Act 1975
If a co-habiting partner does not receive either sufficient financial provision under their partner’s will, or they are due to receive nothing from their partner’s estate due to intestacy, there may be a remedy available to them under the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”).
The 1975 Act allows certain close relatives or financial dependants to bring a claim for ‘reasonable financial provision’ to be made to them from a deceased person’s estate. However, not all co-habiting partners will qualify to make a 1975 Act claim.
Which co-habiting couples qualify to bring a 1975 Act claim?
Provided, the deceased partner died after 1 January 1996, their surviving partner may qualify to bring a 1975 Act claim if, during the whole of the two-year period immediately prior to one partner’s death, the surviving partner was living:
- in the same household as the deceased, and
- as the husband, wife or civil partner of the deceased
1975 Act claims must usually be issued within 6 months of the date of the grant of probate. If the claim is brought after that deadline, the court’s permission will be required, and that is not always granted. This means that any surviving partner from a co-habiting couple who wants to make partner a 1975 Act claim should consider obtaining specialist legal advice as soon as possible. Our Contested Wills, Trusts & Estates Team advise and represent claimants and defendants in 1975 Act claims.
Co-habiting couples and emergencies and bereavement support payments
Partners in a co-habiting couple are not automatically each other’s next of kin. This could mean that they will have no rights to see their partner in hospital or to be involved in or updated about their medical treatment. Having a co-habitation agreement can record your wishes about what happened in this situation.
Bereavement Support Payments have now been extended to cover co-habiting couples who have financially dependent children.
Co-habiting couples and Lasting Powers of Attorney
It is important to consider what would happen if one partner in a cohabiting couple suffers from and injury or ill-health which causes them to lose the mental capacity required to make certain key decisions e.g. managing their finances or where they should live.
If you want to choose who will be able to either make or be involved in decisions about your finances and/or health and welfare if you lose the capacity to make those decisions yourself, you should consider making a Lasting Power of Attorney (LPA) . There are two types of LPA:
- Health and Welfare; and
- Property and Financial Affairs (financial)
Health & Welfare LPAs
This type of LPA can allow someone to assist you with making decisions about:
- your daily routine e.g. washing, dressing and eating
- your medical care
- where you live; and
- life-sustaining treatment
Property & Affairs LPAs
This type of LPA can allow someone to help you with making financial decisions and tasks such as:
- managing bank or building society accounts:
- collecting and managing benefits;
- paying bills; and
- selling property
You can either have one type of LPA or both. An LPA must be made while you still have the mental capacity required to do so and it allows you to select who can make decisions on your behalf.
Both types of LPA can only be used once the form has been registered with the Office of the Public Guardian. However, they can also be used even if the person making the LPA still has the mental capacity to make decisions (with the person’s consent).
If you do not have an LPA and you lose the capacity required to make financial of health and welfare decisions, an application can be made to the Court of Protection to appoint someone called a Deputy to make certain decisions on your behalf. However, you would not be able to select the Deputy an such applications will incur costs which you may have to pay from your own funds.
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