Finances for unmarried couples
Common law husband and wife? An all-too common myth
When things fall apart for unmarried couples the path forward is less clearly defined. The fact is unmarried partners have fewer legal rights than married couples, which means it’s easier to get lost as you both try and move forward.
No legal arrangement, fewer legal rights
There is a commonly held myth that unmarried couples living together are legally regarded as common law husband and wife. This is simply not the case. Without a marriage or civil partnership in place, you have less legal options. Decide to separate and you could be in for an unwelcome surprise regarding any property, possessions, or finances.
Always best to plan for the worst
Even at the start of a relationship, it’s sensible for cohabiting couples to know their legal rights in case it sadly comes to an end. It means you’re both protected. Whether you’re a same-sex couple or opposite sex, simply contact us early in the relationship and we can help you prepare a legally binding cohabitation agreement regulating your finances and ownership of your home.
As already mentioned, when an unmarried couple split there are very different legal implications. Assets such as the family home are not divided as they would be in a divorce. Cohabitation disputes regarding property rely on trust and land law, which we touch on below. There is no automatic entitlement to financial protection, capital, maintenance, or pension claims.
Trusts of Land and Appointment of Trustees Act (TOLATA)
This is the law which allows the court to resolve disputes over property, usually the family home but it can include other properties or assets as well. It can also include businesses and possessions.
The court can make a declaration about the beneficial interests. This means one person is entitled to a share of the value of the property even if the property is in the other person’s name. This doesn’t just apply to property like a house, it can also apply to assets like a business, cars, or possessions. The law is complicated and it’s essential to take specialist legal advice.
These claims can depend on the financial contribution you have made and any agreement between the two of you. These agreements can be written or verbal. In some cases, the courts can infer an agreement from how you have dealt with things during the relationship.
These cases can often be difficult to prove either way. So, it’s imperative to get advice right from the start before you do or say anything which might affect your case later.
Financial claims by parents on behalf of their children
Any parent, whether married or not, is potentially liable to pay child maintenance.
Parents can also make wider financial claims on behalf of their children, which can provide them with some financial security. This might include a claim for capital or to stay in the family home.
Although there are restrictions to what the courts are allowed to do, they are showing an increasing open-mindedness when assessing these claims, which can include anything from ordering one parent to pay the other a cash lump sum, to giving the right to occupy a property. These are called Schedule 1 claims, made pursuant to the Children Act 1989.
If you were engaged but never married, the court may have limited powers to decide who owns what assets. Our solicitors will be happy to point you in the right direction.
Claims against an estate
If your partner dies and doesn’t make adequate provision in their will, you might be able to make a claim against the estate.
Occupation of the home
Even if your partner owns the home you share together, you may still have the right to live there. These rights are limited, so it’s essential to seek advice to ensure you are protected.
Protect yourself and your future
Fortunately, there are ways you can protect yourself and action you can take if your relationship breaks down. For you, it may well be unknown territory. For us, it’s a path we’ve been down before. We’ve supported many unmarried couples, resolving their differences, and putting in place fair settlements so you can move forward in life from a position of security.
If you’re not married why not have a word with our expert, Emerald Priscott, who will be more than happy to advise you on your options. As we’ve explained, it might be better to talk to her sooner rather than later.