Happily ever unmarried?
Today it is becoming increasingly common for couples to choose to stay unmarried, often owning homes and raising children together. In the event of a separation, a great number will think of themselves as ‘common law husband or wife’. They may also assume their assets or property will be fairly divided in the event of a relationship breakdown.
However, the law takes a very different view on separation of a cohabiting, unmarried couple compared to those who are married! Many will have concerns related to the family home or savings and investments following separation.
So, what’s the position where one person has provided all, or a larger amount of money towards the purchase of a property? The law on property concerning cohabitees is clear. The legal ownership to the property is set out in the Title Deeds. These record the details of each individual’s share in the property. When the property is held in joint names, the starting point for any division will be an equal share. If couples have contributed different amounts to the purchase of a property, this should be documented in a Declaration of Trust during the conveyancing process.
Where individuals are not so protected, many may find themselves at risk of losing significant amounts of money. Frequent situations arise when couples do not have a Declaration of Trust or a Cohabitation Agreement clearly setting out how assets should be divided. This situation is most common to those in a new relationship following divorce, or first-time buyers when inheritance or savings have contributed towards the property. When a Declaration of Trust has not been created during the conveyancing process, or when there are further assets involved, a Cohabitation Agreement is the best way to protect the individual
So, what is a Cohabitation Agreement? It is a legal document which clearly sets out what happens at the end of a relationship. Typically, it encompasses any assets which have been provided by either individual. The agreement can also protect children from previous relationships too, for example, the prevention of any sale of a property to ensure any children’s needs are met. This can protect those children residing in the family home in the event of separation or death.
Items of value to either person can also be referenced in the Agreement. This could cover items which may be of value including vehicles, antiques, jewellery and family heirlooms.
Here at Emsleys we provide free initial advice to help you make the appropriate decision for your particular situation. If you are unmarried and cohabiting with significant assets or investments, contact our Leeds based team to arrange your free 15-minute consultation.
