Ways cohabiting couples can protect their financial interests

The number of cohabiting couples in the UK has doubled to more than six million over the past 20 years – with newly released ONS figures highlighting that 1 in 8 adults in England and Wales are unmarried and living with a partner.

While many assume these couples enjoy the same legal rights as married couples should their relationship end, this is far from the case.

For many years Jones Myers has been a vociferous campaigner for increased legal protection for couples who live together. Our frequently asked questions and answers below set out to dispel the cohabitation myths and help couples to protect their financial interests.

Are cohabiting couples protected in the same way as married couples?
No. ‘Common law marriage’ is a myth – cohabiting couples have no status in English law. When a married couple divorce or a civil partnership couple breaks up, marital law allows courts to deal with the financial arrangements. For example, married couples have equal rights to their home – no matter whose name it’s in or who pays the mortgage.

Cohabiting couples have no such rights – if the property is in one person’s name, the other could be left with nothing. There is no legal right to maintenance or a partner’s share of assets, including property and inherited property – regardless of how long they’ve been together or if they have children.

How can I protect my financial interests?
A cohabitation or ‘living together’ agreement can help provide some security. It will encourage you and your partner to think clearly about what you want to happen if your relationship ends, setting out who owns what – and in what proportion.

What does a cohabitation agreement cover?
Cohabitation agreements can cover more day-to-day matters including having pets and lodgers in the house. They can also document how you will divide property as well as paying off debts, personal belongings, savings and other assets should you split up – along with how many children will be supported plus how to deal with bank accounts, debts and joint purchases such as a car.

What’s involved with making a cohabitation agreement?
Agreements are often made through ‘round-table’ meetings within the non confrontational process. It is important that each party seeks independent legal advice and discloses all financial information in the lead up to signing the agreement, which should be reviewed regularly.

At Jones Myers, we are ideally placed to help you decide whether a cohabitation agreement is relevant for you and, if so, how best it should be framed.

Is a cohabitation agreement legally binding?
Yes. They are currently enforceable with the courts supporting the rights of cohabitees in financial and capital claims.

What else can I do to protect myself?
Make a will. We have previously written about how vital it is for cohabiting couples to make a will and how once each partner has made a will, they revisit it regularly.
If one partner dies intestate (without a will) the other could end up with nothing. One example of this is when the partner has dependent children. Under intestacy laws, dependent children of the deceased inherit the entire estate.

If you are seeking advice on protecting your financial interests, please call us on 0113 246 0055, leave us a comment below or drop us an e-mail. You can also follow us on Twitter at @helpwithdivorce