Many people believe that living together in a ‘common law marriage’ entitles them to all the legal rights and responsibilities of a marriage. This widespread belief is a legal myth. Indeed a ‘common law marriage’ has very little to no legal standing in British courts and unfortunately for many couples this has disastrous consequences should one spouse pass away or the relationship breaks down.
One of the worst consequences of the myth is that when one partner dies, the other believes they have a right to their estate – all the assets a person held at the time of their death, minus their debts and liabilities – this is untrue. The reality of these situations is unless there is a will denoting what will go to whom, the surviving partner can be left with nothing and if they do inherit anything this will be subject to the standard rate of inheritance tax – the spousal exemption only applies to legally married couples. This situation can also impact legal rights to state benefits such as bereavement benefit, rights to payouts from insurance policies and pensions. There is a slight exception to the above in that a claim on a deceased person’s estate can be made if the couple were cohabiting as ‘husband and wife’ for a continuous period of more than two years, only ending in the death of one party, and there has been no reasonable provision from the deceased’s estate such as that which would have been expected. Attempting to make a claim can be very complex and almost certainly must be done with the assistance of a solicitor.
Unfortunately there are other consequences to the common law marriage trap, if a cohabiting relationship breaks down and the couple decides to split it can be very difficult dividing the assets, the principle of “what’s yours is mine” does not apply. In this scenario what actually happens is that whatever one person buys with their own money is theirs, if a purchase is made together whatever share of the money one partner puts into the purchase becomes their share in the item and if something is given as a gift it belongs to the person who received it (but proving this is the case can be very difficult). Essentially the ‘common law marriage’ entitles no more legal rights over property than that of a stranger.
Home ownership is another problem faced by those believing in the myth. Property ownership in both names gives both parties a right in that property – but what if they put money in very unevenly? Say Steve puts in 1% of the deposit on their new flat, while Karen, who has some savings, puts in 99% of the deposit. For the next five years Karen pays the mortgage each month while Steve pays all the bills every month and for all the holidays in an attempt to “even up” the contributions. It’s bad news for Steve though – if he and Karen split, he owns 1% of the house (unless they took steps to draw up a deed saying otherwise). The money Steve has paid in does not alter their ownership shares In the event of a break-up it can also be hard to force the sale of the property – whether it’s to you because you want to buy it all, or on the open market because you want to release your equity. It’s certainly not easy or quick to force a sale in a divorce, but for cohabiting couples it’s that much harder. There are a few arguments Steve could try and make – if he made a capital payment towards an extension or the couple reached an agreement which can be demonstrated to the court.
These examples are just a few of the potential pitfalls of believing and living in the myth. There is however a relatively easy alternative and it doesn’t mean getting married. A cohabitation agreement drafted as a deed can function as a contract and voluntarily give many of the legal rights and responsibilities a married couple has. Agreements can deal with things like how finances will be distributed following a split, how childcare will be shared and what will happen should one partner die. The great thing about cohabitation agreements is that they are bespoke, designed for the specific needs of your relationship giving legal effect to both of your wishes.
Grayfords expert family solicitors can assist with the legal aspects of family life. Solicitors can help you draw up a cohabitation agreement and protect you whatever the future holds. Contact Grayfords to know what your options are, but whatever you do, don’t fall into the common law marriage trap!