The Current Law in England & Wales for Cohabitating Couples

Currently, there is little legal protection for unmarried couples in the event of a separation. When an unmarried couple separates, each partner will keep any assets that are in their sole name – regardless of whether that is the family home or the family business. To dispute this, the partner whose interest has not been documented will have to establish that there was a joint intention for them to have an interest using the highly complex Trusts of Land and Appointment of Trustees Act 1996. The usual deciding factor is that the person(s) named on the deeds is the owner. In some circumstances, it is possible to claim an interest in the property if there was an intention to share the property and beneficial interest can be established. It is also possible for a parent to make claims for the benefit of children under Schedule 1 Children Act 1989 for a capital sum or property transfer. Any provision of capital reverts to the original owner when the child reaches 18 or 21 years of age.

What is a Cohabitation or Living Together Agreement?

A cohabitation or living together agreement sets out what happens to an unmarried couple’s assets in the event of the relationship ending. The agreement can also include details of how the couple will manage and share finances for the duration of their cohabitation.

The Separation or Living Together agreement will not be legally binding unless a solicitor drafts it as a deed, which both partners would then need to sign. Each partner should seek his or her own legal advice on the agreement before signing it.

What can be included in the agreement?

It is important that couples discuss how they will manage their finances when they are living together. By agreeing exactly who will pay for what; how the household bills, rent or mortgage will be shared; whether one person has the responsibility of paying for a car or some other expenditure; and other financial aspects beforehand, this will prevent conflict or misunderstandings later on in the relationship. Most couples are happy to share all the household and living costs, but others would prefer an alternative arrangement that is more suited to their individual preferences.

Couples may also wish to include details about their individual pensions, specifically if either of them intends to nominate the other to receive death-in-service benefits from their pension.

The agreement can set out exactly how the assets and personal possessions would be shared in the event of a separation. While legal ownership will usually determine who retains an asset or item solely owned by one partner, couples can agree between themselves to share specific assets and what that share would be.  Such an example would be the family home – who owns it and what would happen should the couple separate? If one partner owns the house, would the other receive a lump sum to enable them to rehouse themselves? Would there be an equal share of the equity if the couple separate and sell the house? The agreement can also include details of how joint bank accounts and any debts or liabilities that remain at the time of the separation will be dealt with.

It is also important that you each make Wills, as unmarried partners are not included in the Rules of Intestacy, which determine how a person’s estate will be distributed if they die without leaving a valid Will. If a partner dies without leaving a Will, this makes the remaining partner very vulnerable, particularly if the deceased was the sole owner of the property.  Making sure a Will is in place will protect both your assets and your partner in the event of your death.

While this may not sound particularly romantic, it is essential to be practical about such matters when considering living with a partner - it could save a lot of heartache in the future.

Oratto’s expert family law member solicitors are here to help you with any aspect of cohabitation, whether that is advising you on a Cohabitation Agreement or a dispute arising from a cohabitation separation.  Call our National Helpline on 0845 388 3765 or contact us using our online contact form.