5 ways cohabiting couples can protect their rights

The common-law spouse is a myth in England and Wales. If you’re cohabiting, you should do five things to protect your interests. Let’s find out more.

The 2021 census found that 24.3% of couples are cohabiting, meaning they’re not married or in a civil partnership. This proportion is up from 20.6% in 2011. But did you know that cohabiting couples don’t enjoy the same rights as married couples, no matter how long they’ve been together? People talk about ‘common-law spouses’, but that’s a myth in England and Wales.

If your marriage or civil partnership breaks down or your spouse dies, you have certain legal rights around finance, property and more. But if you’re cohabiting, you must take legal steps to protect yourself if anything like this happens. In this article, we’ll share five things cohabiting couples should do to protect their rights.

1 – Get a cohabitation agreement

A cohabitation agreement is like pre-nup for cohabitees. You and your partner draw up a contract, which you both sign before you move in together. In the contract, you can cover all aspects of your relationship, including property ownership, responsibilities for bills and what will happen if you break up. If you have children, you can include parental duties in the agreement.

Your cohabitation agreement is a legally recognised document and can protect your rights if you split up or your partner dies (or your partner if you die).

2 – Make a Will

When you’re married, if you don’t have a Will and you die, most of your assets automatically pass to your spouse and children Unfortunately, for cohabitees, there is no such provision in law.

If you want your partner to inherit any of your assets or to continue to live in your home when you die, you must make a Will to set it out legally.

3 – Property ownership

When you buy a property with your partner, you can choose whether to be joint tenants or tenants in common. These are legal terms that set out the way you own your property:

●       Joint tenants – You and your partner have equal rights to the property. Legally, you’re viewed as a single entity. If you or your partner die, the property automatically goes to the surviving partner.

●       Tenants in common – You and your partner own your shares of the property separately. Your shares can differ in size. If you die, your share goes to the person nominated in your Will.

When you buy your property together or move into a property one partner already owns, it’s a good idea to draw up a Declaration of Trust to clarify who owns what share, how you’ll finance it moving forward, what will happen if you split up or one of you dies, and what will happen if you sell the property.

A Declaration of Trust protects both sides if the relationship breaks down. Without one, proving your beneficial interest in the property in court can be very difficult. It’s sensible to make everything clear in a legal sense from the start.

4 – Pensions and benefits

As part of a cohabiting couple, you’re not entitled to any of your partner’s state pension if they die. This is unlike married couples who automatically get that right.

For private pensions, you should check with your pensions administrator whether you can nominate your partner to receive a dependent’s pension or a pension that’s payable on your death.

5 – Inheritance tax

While married couples can leave property to each other with no Inheritance Tax payable, cohabitees cannot. Anything you leave over the threshold of £325,000 will be subject to 40% Inheritance Tax.

If you have a lot of valuable assets, you should speak to an Independent Financial Advisor who can advise you on how to structure your financial affairs to manage Inheritance Tax most efficiently.

Why you need a solicitor

As you can see, if you’re cohabiting, you’re automatically at a disadvantage compared to married couples. If you split up or one of you dies, you could face legal challenges to achieve fairness. That’s why you need an experienced solicitor in your corner.

Your solicitor can help you draw up a Cohabitation Agreement, Will and Declaration of Trust on a property. They’ll explain your options in plain English, then help you protect your interests from a legal standpoint. Don’t leave things to chance. Talk to your solicitor today.

Find out more from Couchman Hanson

At Couchman Hanson, our solicitors genuinely care about getting the best outcome for you. We’re highly professional, with ‘city’ level talent and experience, but also friendly and welcoming. Everything we do fits with our values of integrity, honesty and authenticity.

Call 01428 774756 or visit couchmanhanson.co.uk.