Posted on Monday August 5, 2019
Last month we saw Boris Johnson become the new Prime Minister of the United Kingdom. His relationship with his girlfriend, Carrie Symonds, has brought to the forefront considerations in respect of unmarried cohabitants.
While it is not known what, or if any legal arrangements exist between the couple, they like so many other cohabiting couples must be aware that they do not acquire the same rights as married couples by living together, which may give rise to vulnerability and uncertainty in future.
The two main ways that unmarried cohabitants can protect themselves is by entering into a cohabitation agreement and making a valid Will.
If they enter into property ownership together then a declaration of trust may also be appropriate to reflect the ownership arrangements and respective financial contributions to the purchase of the property.
This may not be possible with Boris’ main residence at No. 10, but it is believed that the couple own other residences which may require careful consideration.
During the life of a relationship, it is wise for unmarried cohabiting couples to enter into a cohabitation agreement.
A cohabitation agreement sets out the obligations and rights of unmarried parties who live together, in addition to regulating financial and living arrangements.
Cohabitation agreements promote clarity by recording the intentions of the parties, meaning there is no scope for ambiguity.
They help to prevent potential litigious disputes from arising during the relationship and after a relationship breaks down, they can provide clarity on financial security and safeguarding assets.
For example, one party who wishes to safeguard a potential inheritance or unexpected wealth can make that happen provided the correct procedure is complied with.
If unmarried cohabitants have separate bank accounts, neither party can have access to the other party’s bank account. In terms of joint bank accounts, both parties are entitled to the funds.
Notably on separation and upon relationship breakdown, there is no legal requirement to pay maintenance to the other party. However, provisions for maintenance can voluntarily be made.
The Law Commission, which reviews and provides recommendations for reforms of the law, has said that cohabitation agreements are governed by contract law, meaning that they can be challenged on the basis of duress, undue influence, misrepresentation, fraud, illegality and mistake.
As a result, to ensure the protection of interests and assets, it is important to have cohabitation agreements drafted or reviewed by legal advisors and for each party to have independent legal advice.
The fact that there is no legal requirement to pay maintenance to the other party in the event of a relationship breakdown can also be a negative. For this reason, it is imperative that if a party wishes for financial support upon a potential relationship breakdown, it is included in a cohabitation agreement.
On death, unmarried couples are not automatically entitled to an inheritance in the event of the death of their partner who either died intestate or did not make a provision for the other party in his/her Will.
However, they may be able to benefit through statute by demonstrating that: 1) Two years prior to the date of death, the living party was living in the same household as the deceased; and 2) They were living as the husband, wife or civil partner of the deceased.
Unmarried couples do not have the same tax benefits as married couples. As a result, unmarried cohabitants will likely be required to pay higher levels of inheritance tax upon death than that of spouses.
In the case of unmarried couples having joint bank accounts, the living party will be entitled to the funds. However, there may be certain tax implications.
Cohabiting couples must be aware that in a medical emergency, both parties will not automatically be each other’s next of kin.
Both parties would need to have an explicit agreement in place detailing what is to happen in the event of medical emergencies.
This is usually by way of a Lasting Power of Attorney. This is where one party gives the authority to act on the other’s behalf.
Therefore, overall, unmarried cohabitants are advised to fully protect their interests and intentions if their wishes differ from the default position in law.
There is no “common law marriage”, although this is a myth that continues to persist, so if cohabitants wish to confer certain rights, they must be explicitly set out. There are also specific rules which apply if the parties have children together.
One may hope that the PM’s time in office may help to highlight the rights of cohabitees and quash the persistent myths that surround cohabitation.
To find out more about Mackrell. Turner Garrett’s services for cohabitees, please contact Skylar.