Four things to consider if you’re a cohabiting couple

Under current laws, cohabiting couples have only limited rights in comparison to those who are married or in a civil partnership. When a cohabiting couple separates they must divide jointly owned property, but assets held in their sole names, such as pensions, savings and investments, will not be divided.

This leaves people who choose to cohabit in a vulnerable position, so it is important that these couples consider the following four issues when making the decision to live together.

Property ownership

Properties purchased by cohabiting couples can be held as either joint tenants or tenants in common, so it is important that if you’re buying a property with your partner, the home ownership option you choose is the right one for you.

A joint tenancy means that both you and your partner own the property together as a whole, so if either of you were to pass away, then the other would inherit the property outright. On the other hand, a tenancy in common means that both you and your partner have distinct shares in the property so your share would pass onto whoever it is left to in your will. To ensure that the property would pass onto you should your partner die, you must check how your property is held.

Pension planning

As a cohabiting couple you do not have an automatic right to receive your partner’s pension following their death. However, some pensions allow the holder to nominate a person they wish to benefit from the scheme when they pass away. This could be specified as your cohabiting partner, but it is necessary to check with your pension provider to find out if this is a possibility.

Wills

As a cohabiting couple your partner’s property will not automatically be inherited by you should they pass away, so if your partner dies without a will, their property will be dealt with in accordance with intestacy laws and will pass onto their next of kin.

As a cohabiting couple it is vital that you draw up a will to ensure that your property is passed to your partner if this is what you wish.

Cohabitation agreements

It is possible to enter into a written agreement known as a cohabitation agreement. A cohabitation agreement will allow you to set out who owns what, in what proportion and how property and other assets will be divided should you split up or one of you die. A cohabitation agreement, also known as a living together agreement, can also help set out day-to-day arrangements such as how bills are paid.

These type of agreements help provide additional legal protection for cohabiting couples, so drawing up a cohabitation agreement when you live together could help avoid costly disputes should the relationship break down or if one partner passes away.

For more information on cohabitation agreements, or any other aspect of family law, please contact Janine Hutson on 01772 258321.