Unlike divorce law for married couples, there is no legislation setting out how unmarried couples’ property is to be dealt with in the event of separation. Nevertheless, couples can ensure they have control over how their finances and assets are dealt with by having a written Agreement prepared.
According to the Office for National Statistics around one eighth of the UK’s adult population cohabit with a partner. Yet, despite the growing popularity of cohabitation and continuing calls from pressure groups, the Government decided not to introduce legislation bringing unmarried couples’ rights regarding inheritance, separation and other matters in line with those of married couples.
Regardless of the government’s decision, unmarried couples are able to make a Cohabitation Agreement which can cater for all eventualities and which, unlike its counter-part the Pre-nuptial Agreement, has the advantage of being legally binding and enforceable by the court, provided independent legal advice has been sought and all assets have been disclosed. While the wishes of married couples set out in Pre-nuptial Agreements are being given more weight by judges since the landmark decision in Radmacher (formerly Granatino) v Granatino, judges are still under no obligation to enforce these previously agreed terms.
Cohabitation agreements can include a wide range of measures allowing unmarried couples to reduce uncertainty both in the event the relationship comes to an end and whilst the couple are together. For instance, agreements can provide for how any joint bank accounts, shared property or joint expenses are to be treated.
Another area where unmarried couples are left behind by legislation is that of inheritance. Under current laws, unmarried couples have no automatic right to each others’ estate in the event one of them dies. To ensure assets are distributed to their partner and in accordance with their wishes, it is necessary for cohabitees to make a Will or update one they may not have had amended for some time.
For some, the concept of setting out a formal agreement sits uncomfortably with the romantic ideal of living with a partner. Nevertheless, Cohabitation Agreements can remove uncertainty and ensure the treatment of assets is fair both during the relationship and in the event it comes to an end. Without such an agreement a couple can be left in a situation which may not be anybody’s fault, but which may be costly to resolve.
A Mackman Group collaboration - market research by Mackman Research | website design by Mackman
