What happened to marriage? Today’s popular trend is couples just living together. But what are the legal risks of this increasing trend?
It has recently been reported that the number of unmarried couples living together has more than doubled in the past 5 years. Unfortunately, the law has not caught up with the consequences / risks that cohabitees may face if they fall out or one passes away.
If you live in a property owned by your partner then beware as you have no automatic right to any share in it. To have any claim you would have to show that you both agreed you should have some right to it (this is what lawyers refer to as a “common intention”). This is a complex area of law and may involve going to court, which can be extremely stressful and costly.
If you live in a property that is held in joint names, then unless it is clear from an agreement or the title deeds, there is a presumption that it is owned in equal shares. Such circumstances mean that when the property is to be sold the proceeds are divided equally, although this presumption can be rebutted.
If there are children, then you may be able to make financial claims on their behalf. Depending on the circumstances, you and the children might be able to stay in the house while they are dependent. However, once children have ceased to be dependent, the capital is returned to the parent who provided it.
Now most importantly, if your partner dies and has not made a Will you are not entitled to their estate and it will go to their next of kin meaning you could lose your home. If provision has not been made you may be able to make a claim against the estate under the Inheritance (Provision for Family and Dependents) Act 1975. However, this can be difficult, stressful, costly and time consuming.
I now summarise steps that you can take to protect yourself:
Have a Declaration of Trust
If you buy a property jointly, you should always seek legal advice from a lawyer and ask them to draw up a “Declaration of Trust”. This legal document makes clear the parties’ interests in the property and can be invaluable should you split.
Have a Cohabitation Agreement
You may also wish to enter into a Cohabitation Agreement to record your living arrangements. For example, this can include issues such as who pays which bills, the operation of joint bank accounts, arrangements for financial support, arrangements for children, liabilities, cars and anything else which affects the dealings between a couple.
Get a Will drawn-up
I cannot express how vital it is that you have a valid Will in place, as cohabitees do not automatically have an entitlement to their partner’s estate if they die without one. A Will sets out clearly what you intend to happen to your interest in your home, your money and personal possessions.