More and more couples are opting to cohabit, as opposed to going through with a marriage or civil partnership ceremony. This is, of course, a perfectly legal way to join forces and live as a couple, or raise a family. Cohabiting couples are rising in number in the UK, with a staggering 137% increase between 1996 and 2020 (SOURCE: https://commonslibrary.parliament.uk/research-briefings/sn03372/)
However, cohabitation doesn’t always bring the same legal protections as a formal marriage or civil partnership. Despite the law working to catch up with societal trends, many disparities still exist between what married spouses or civil partners and cohabitees can expect and are allowed to do legally. Many common myths abound around this topic. Not all are accurate, and some can be downright wrong, which could lead to dangerous misunderstandings around how well each party is protected in law. For example, here are four myths and some relevant clarifications.
MYTH 1: “A cohabiting couple is legally called a ‘common law husband and wife’”
The term ‘common law husband or wife’ doesn’t actually exist in law. Or in any aspect of official life. Unmarried couples are not entitled to the same, or even similar rights as their married counterparts or those who have entered into a civil partnership. This is true, no matter how long the so-called ‘common law’ couple has been together or how many children they may have. They cannot apply for shares of pensions, and inheritance rights are far more limited.
MYTH 2: “Cohabiting couples are legally entitled to a share of their partner’s pension, savings or other financial assets on separation”
Again, this is not correct. Should a cohabiting couple split, neither party is legally entitled to apply for part or all of the other’s pension. This is different within civil partnerships and marriage, where pension sharing arrangements are in place to help protect both parties financially. Instead, parting cohabitees retain the entirety of their own pensions – as well as any savings, income and other financial assets set up in their own name – and nothing more.
Of course, if the couple has set up a joint savings portfolio, for example, this continues to be accessible by both parties and arrangements must be made for dividing the contents on the event of a split. Joint bank accounts can also be accessed by both parties, regardless of who paid in most often, how long they paid in for and how substantially.
MYTH 3: “Cohabitees can make an automatic claim against their ex-partner’s property when they split”
Just as each person in a cohabitating relationship keeps hold of pensions, income or savings in their name, a parting couple who has not married or entered into a civil partnership cannot automatically claim part of the other party’s property portfolio, unless it is held in joint names. Unless alternative legal arrangements have been put in place (such as a business partnership or cohabitation agreement), each person only retains property that they hold solely in their name. Joint mortgages must still be paid, however, to avoid the associated property being repossessed and credit ratings becoming damaged.
MYTH 4: “On the death of one party in a cohabiting relationship, their estate passes automatically to the other”
The surviving partner of a cohabiting arrangement that has ended on the death of their current or former partner doesn’t have any automatic rights to inherit the late person’s estate. This is also true of their property, which may well include the house or flat where the surviving party may still live. If no Will has been made, the estate is handled under the rules of intestacy. This revolves around a clear ‘line of succession’ which is used to identify the closest living blood relatives. If none are to be found, the estate passes to the Crown.
The best way to avoid a great deal of distress for cohabiting couples is for both people to make a Will as soon as possible with clear instructions on what is to be done with their estate on their passing. Another consideration around Wills and inheritance is that cohabiting couples are liable to pay inheritance tax on assets and property that passes between them, unlike married spouses or civil partners, who are not.
The above is not a comprehensive list or complete appraisal of the differences between cohabiting couples and married spouses or civil partners. For further details and advice, take a look at the Citizens Advice Bureau’s website: https://www.citizensadvice.org.uk/family/living-together-marriage-and-civil-partnership/living-together-and-marriage-legal-differences/. Or contact us at Shortlands Solicitors to discuss your personal situation and requirements around cohabitation, marriage or civil partnerships.