Cohabiting Property Rights: Everything Unmarried Couples Need to Know

More and more couples are choosing the “let’s-live-together-but-not-get-hitched” route. According to the latest stats, about 22% of UK couples are living together without tying the knot or entering into a civil partnership. That’s around 3.6 million cohabiting couples, more than double what it was back in 1996. But, before you settle in and start binge-watching Love Is Blind together. It’s important to know your cohabiting property rights and how they differ to those of married folks. Spoiler alert: there’s no such thing as a “common-law spouse” in England and Wales. No matter how long you’ve been sharing the remote. Sorry.

Know the law (because it’s not always a rom-com ending)

Here’s the deal: if your relationship takes a nosedive or one of you passes away, you don’t get the same legal protections as married couples. Even if you’ve been together for what feels like forever. The law doesn’t recognise you as a “common-law spouse.” This means no automatic rights to property, pensions, or savings unless they’re in both your names. While there have been whisperings on the grapevine of a change in the law to give cohabiting couples more financial rights, until that happens it is essential to protect yourself.

Put a ring on It, or at least a legal agreement

Before you get too cosy, it’s smart to set up a cohabitation agreement. Think of it as the prenup for the not-quite-married. This nifty document spells out who owns what. Property, savings, that fancy coffee maker you both adore, and who’s paying for what. It’s like adulting, but with legal backup. Lawyers can help you draft one for around £500 to £1,000. But if you want to save some cash, there are online options like Rocket Lawyer and Lawpack. Do heed our warning however: a DIY agreement might miss some key details. We would suggest going down the professional route for peace of mind. Especially if you ever end up in court. Plus, if you both get independent legal advice, your agreement will carry more weight. For a helpful guide on what to include in your agreement, check out Advicenow, an independent legal charity that offers both free and paid resources.

Don’t skip the wills (they’re not just for pensioners)

Unlike married couples, if one of you dies without a will, the surviving partner doesn’t automatically get a slice of the pie. So, unless you want to risk your assets going to that cousin you haven’t spoken to in years, make sure you have a will in place. A solicitor can whip one up for around £250 plus, but if you’re looking for a deal, keep an eye out for Will Aid each November. During this month, solicitors will write basic wills without their usual fee, in exchange for a donation to charity. Alternatively, you can use an online service like Farewill, but make sure they’re a member of an official body like the Society of Will Writers so you know they’re above board.

Mind the tax gap

Married couples get some sweet tax perks that don’t extend through to cohabiting property rights. For example, anything left to a spouse or civil partner in a will is exempt from inheritance tax (IHT). Unmarried partners, on the other hand, could face a 40% tax bill on anything over the £325,000 threshold. So, it’s crucial to think about how you structure your assets, and especially property. You don’t want to leave your partner with a hefty tax bill they can’t pay. Chat with a lawyer about how to best handle this so you’re both covered.

Home Sweet Home: joint tenants or tenants in common?

If you’re buying a home together, you’ll need to decide whether to be joint tenants or tenants in common. As joint tenants, you both own the entire property, and it automatically passes to the surviving partner when one of you dies. As tenants in common, you each own a specific share of the property, which you can leave to whoever you want in your will. If your partner owns the property and you split up, you’d need to prove you have a “beneficial interest” to claim any share of it. And heads up, contributing to home improvements or paying bills doesn’t always count.

Pensions and benefits: don’t miss out

Cohabiting property rights don’t include the same rights to state pensions as married couples. If you want your partner to inherit your personal or workplace pension, make sure you’ve completed your provider’s expression of wish form. You can usually find this online through your pension provider. The good news? Since February 2023, the government has extended bereavement support payment and widowed parent’s allowance to cohabiting parents, so there’s some progress on that front.

Bottom line: plan ahead, and keep it fun

Living together is a big step, and while it’s all about love and sharing a life, it’s also about protecting yourself and your partner. So, take a little time to sort out the legal stuff, then you can get back to arguing over whose turn it is to choose the True Crime doc tonight.

Contact us:

mark@daviesdavies.co.uk – Sales Director (contact for sales, lettings and new homes)

katrina@daviesdavies.co.uk – Head of Property & Block Management (contact for property and block management)

Davies & Davies Estate Agents, 85 Stroud Green Road, London, N4 3EG

Article & images by Barefaced Studios

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