The legalities of cohabitating

In recent years, cohabitation has become the fastest growing family type in the UK with statistics showing an increase of 22.9% within the past ten years. Essentially, this means that more couples, both with and without children, are living together in the same household without marrying.

Whilst this is a choice that many make, people often fail to realise that there are vital differences in the legal rights of cohabiting partners and in those of married couples. These can create financial impacts and, in the case of dependents, result in rather complex situations.

We’ll outline some of the main aspects that should be considered if you choose to enter into cohabitation without marriage and explain ways to protect yourself and your loved ones.

Legal status

Unlike married couples, cohabitating couples do not automatically have equal statutory rights. Many wrongly assume that they have ‘common-law marriage’ rights and believe they have equal legal status to those who are married.

If you’re living with a partner or planning on moving in together, you can draw up a cohabitation agreement to help cover a range of future scenarios and protect your finances.

Property

A home is one of the largest purchases you can make so it makes sense to consider how you wish to own it as this can have financial impacts in the case of separation or inheritance.

You can either own a property as joint tenants or tenants in common. Joint tenants allows you both equal rights to the home and, in the event of a death, the other partner will inherit the property. If you’re classed as tenants in common, however, you can both own different shares in the home.

Tenants in common can also leave their share of the home to another person in their will.

Death and inheritance

In the case of cohabiting couples, if a partner dies without leaving a will, there is no automatic inheritance and the process of claiming from the state can be complicated.

Another aspect to consider is inheritance tax. Married couples are exempt from this, but if an estate is worth over £325,000, the remaining partner of a cohabiting couple who inherits the estate will be subject to pay the tax.

Children

Laws and financial benefits surrounding children are also different for cohabitating couples, including in the case of separation.

There are options that offer financial assistance including child maintenance and financial provision under The Children Act 1989. The latter would need to be decided by the court and involves one parent providing financial help up to a certain milestone in the dependent’s life.

If you’re planning on cohabiting with a partner and/or starting a family, it’s a good idea to consider your legal rights and options to make sure you’re fully informed.