Increasingly, we are seeing a rise in people opting to cohabit (live together) over getting married. People are increasingly less religious, less inclined to spend money on ‘the big day’, opting to potentially use the money for a deposit on a house and then work out the legalities of beneficial interest later down the line. But cohabiting still represents less than a third of that chosen family type, with most still choosing marriage or civil partnership – and it is worth pondering whether some of that decision is linked to the still quite different rules in law.
It is therefore extremely important to consider the legalities of a decision to cohabit, as you will not automatically receive the same rights as those who are married.
Common Law Marriage
Many people have made the connection within their own situation that if they are living with their partner as a couple they are deemed to be in a common law marriage, and therefore have the same rights as a married couple. Sadly, they are wrong. Common law marriage has absolutely no basis in law and therefore in England, Wales and Northern Ireland there is effectively no legal validity that at the end of a partnership each individual has rights. In Scotland, there are some basic rights in place, but not as clear or as many rights as a married couple.
The reality is, if you are going to move in with your partner, there is no immediate set of rights in place over property, and it doesn’t even matter how long you have lived together. What’s more, if one of you dies you will not automatically inherit your partners estate, even if you have determined yourselves as a couple under ‘common law’.
There is one area where this could be different, and legal advice should be sought if you are in this category of relationship, whereby there are children in the mix. Parents in that sense have rights and responsibilities – even if only one partner is deemed the biological parent.
You have no rights to the home you share! Issues will arise if you are moving into a property that your partner owns.
When a property is owned by one person – even if the other is contributing financially there are rules to take note and seek legal advice on, and these are bulleted below. Literally the only person with legal authority to reside at the home is the person named on the mortgage and deeds. The other party can be told to leave at any point, regardless of investment. But that is when advice should be sought around the scope of having legal paperwork drawn up around the potential of beneficial interest. Other key issues are linked to rights to sell the property – only the ‘owner by law’ has the authority to put the property on the market. Beneficial interest legal advice will determine at its outcome what right each partner would have over the money raised from the sale.
Key points worthy of consideration are:
- The person named as owner of the property should make provisions legally in writing through a statutory declaration that the non-owner has shares in the home via deposit and percentage contributions.
- The partner who has no direct legal ownership rights should actually pay towards the mortgage, and where applicable make a contribution to the deposit payment, and it should be legally determined as such.
- The person who does not own the property should not place themselves in a position that means they can no longer contribute. This would, in most cases, automatically limit the financial entitlements with regards the property.
- If there are separation matters in the mix, a request to the court may need to be made in relation to continuation of cohabitation where there are children involved, and this will be legally determined in the interests of the children’s welfare, as well as that of the other partner who is the property owner.
A key way of bringing increased levels of protection with regards to the rights of each partner would be to buy the property in joint names. There are however a number of key important considerations:
- Should you decide to leave your partner, you are not able to force the other to leave the property unless there are legal grounds via a court order.
- If one partner contributes more to a deposit and the monthly share of the rent, that will not give increased entitlement should the property be sold. It is likely that the money raised from that sale would be split equally.
- If one of you walks out on the other, the continuation of mortgage payments at the stated level are still liable to be paid.
In all circumstances, a joint purchase or written statement of beneficial interest declaration outlining the contributions each of you has made from deposit to monthly mortgage payments will limit the risks, and it is important that legal advice and services are sought to prepare this documentation.
The same rules apply if you are looking at wider possessions and finances. If you as an individual buy something, it is yours.
What about Marriage?
Marriage is a legally binding contract once the official signing of the registers has occurred as part of the overall ceremony. The religious part is often not enough on it’s own to constitute a complete contract.
If you are married, you own equal shares in money held in a joint account regardless of who puts the most in. It is worthy of note however that debts are held solely in the name of the individual and do not transfer to the other person at any point.
If one of the couple dies, the other will inherit the estate of the other. These terms change if there is a last will and testament in place, and advice is always encouraged to be sought to ensure this is completed correctly.
Who you choose to live with is a huge decision and as this article shows, there are ways of dealing with the many potential issues that can arise from cohabiting with the right level of support and legal advice. We encourage people to take time to plan for the future with the right guidance, as we know that money and possessions can often be a taboo subject. By getting in touch, we can help put a support framework around all of your matters, and that at least will bring peace of mind whether you are cohabiting or married.