What's mine is not yours
The importance of living together and cohabitation agreements

Today more and more couples are opting not to marry and to have children outside of marriage. Associate and family solicitor Sonia Bachu, explains why unmarried couples need to protect themselves against the breakdown of a relationship.

But unlike married couples and same-sex couples who enter into a Civil Partnership, there is no automatic legal remedy for heterosexual unmarried couples upon the breakdown of their relationship - especially where property is concerned.

For instance, if a property has been purchased by one party, before or during the relationship, and held in the sole name of one party, and there is no or little evidence that there was any intention for the other party to have an interest or share in the property, there is little the non-owning party can do. They will not automatically be entitled to a share and it will be for that party to show they have an interest in the property.

Likewise, there is little one can do if the property is held jointly - as beneficial Joint Tenants - and one party has contributed all or most of the purchase price of the property yet the other party contributed little or nothing. In this case, the party who paid the majority, or all of the deposit monies and/or paid the mortgage solely throughout the relationship may not have any choice but to provide to the non-contributing party 50% of the equity in the property. In such a case invariably the equity will be divided equally between the parties upon the breakdown of the relationship, given the property is held jointly.

There may also be a detrimental impact upon the cohabitant whose partner has died.

Recent case law Webster v. Webster 2009 involved a woman who inherited nothing after her partner died leaving no will. They had been in a relationship for 27 years but never married and had two children together. The man had three more with his former wife. The five children as the man’s next of kin inherited all he had, including the house the woman and two children lived in (as this was in the man’s sole name).

The woman was therefore forced to make an application to the Court for financial security. Fortunately the Court made provision for her as she was classed as a dependant under the Inheritance (Provision for Family and Dependants) Act and ordered that the Trustees transfer the house to her outright mortgage free. Astonishingly, the woman had more legal recourse upon her partner’s death than she did when he was alive.

It is therefore important for unmarried couples to:

• Record their intentions by obtaining early legal advice as to how property should be held (as beneficial Joint Tenants, Tenants in Common in equal shares or Tenants in Common in unequal shares – usually where there is an imbalance of financial contribution(s))
• Enter into a Living Together or Cohabitation Agreement to express their intentions as to the division of assets in the event their relationship ends
• Make a Will
• Take out appropriate insurance cover to meet financial responsibilities and/or debt in the event of death.

It may be argued that a marriage certificate is not just a piece of paper!

The Law Commission is currently undertaking a review of intestacy rules in relation to cohabitants which is expected to conclude in February 2010, so the position may well change in the future. The safest option for all cohabitants is to make a Will.

If you would like information on living together/cohabitation agreements, please contact Sonia Bachu on sonia-bachu@harveyingram.com or call 0116 257 6148.