A Guide to “Common Law Marriage”

Year on year, the number of cohabiting (living together) couples continues to grow, with the proportion of people getting married slowly on the decline. As of November 2019, there were 3.5 million cohabiting couples in the UK. In this article we debunk some common myths about the rights of cohabitating couples.

As the dynamic between marriage and cohabitation continues to change, there is increasing pressure on the government to improve the rights of cohabiting partners.  Whilst multiple bills have been presented to parliament over the years, none of these have so far been enacted. With this in mind, it is important to dispel some of the long-standing myths that surround the concept of cohabitation and the “common law marriage”, especially given the recent spike in lockdown enforced or accelerated cohabitation as a result of COVID-19.

Myths and Truths surrounding cohabitation:

• Myth: Unmarried couples who live together benefit from what is known as a ‘common law marriage’.
• Truth: There is no such thing as a “common law marriage”, irrespective of how long an unmarried couple have lived together.
• Myth: After living together for more than two years, unmarried couples have similar rights to married couples upon relationship breakdown.
• Truth: Unmarried couples do not have the same or similar rights upon relationship breakdown or the death of one party, as married couples do. Married couples have automatic financial claims, whereas cohabiting couples do not regardless of the duration of their relationship.

The reality
The current law on cohabitation is woefully out of date. It takes no account of changing family structures and fails to provide any real protection for cohabiting couples, irrespective of whether they have children together. This causes particular hardship for cohabitants who have made career or financial sacrifices for the sake of their relationship.

Examples of where cohabitants are disadvantaged in circumstances where a married spouse would have protection, include:

• Financial claims upon relationship breakdown: married couples have an automatic right, cohabiting couples do not.
• Tax exemptions for Capital Gains Tax, Inheritance Tax and Stamp Duty Land Tax: married couples have access to tax exemptions on the transfer of assets in a range of situations, cohabiting couples do not.
• Entitlement to partner’s assets under intestacy rules upon death: married couples have an automatic entitlement to inherit, cohabiting couples do not.
• Obtaining a survivor’s pension: there is no requirement of nomination for married couples, however there is an absolute requirement of nomination for cohabiting couples.

Steps to take:
Whilst cohabitants are not provided automatic, full protection by the current laws, there are steps that can be taken to safeguard the position. This can include:

1. Cohabitation agreement – This is a document which sets out certain agreements and intentions to be relied upon both during the relationship, and upon relationship breakdown. It can cover matters relating to property, finances and children in order to provide ongoing security to both parties;
2. Deed of trust – Where cohabitants own joint property, a deed of trust can be entered into to manage the ownership of a property. It is not always the case that properties owned in joint names are owned equally, and this document can provide protection to parties who have contributed more into the purchase of a property.
3. Wills – Whilst cohabitants do not automatically benefit from the doctrine of survivorship (whereby a spouse will automatically inherit some or all of their spouse’s estate upon death, where there is no will present), they can still ensure that their partner inherits upon their death by creating a will to that effect.

In addition to the above, where the cohabitants have children together, financial claims can also be brought for the benefit of the child under Schedule 1 of the Children Act 1989. Under this Act, a parent can make an application for a lump sum, and settlement or transfer of property order, in addition to (limited) claims for child maintenance and carer’s allowance.

What does the future hold for cohabitants?
A growing number of legal professionals and politicians are of the view that the laws on cohabitation need to be reformed in line with the changes to society. Given the increase in lockdown enforced cohabitation as a result of COVID-19, it is hoped that this might accelerate the process and finally overhaul these outdated laws.

The Solution
A lot of the issues surrounding common law come from the fact that the majority of cohabiting partners assume the law and what rights they feel they have. The simple fact is that by taking professional advice and drawing up protective Wills that reflect each other’s concerns along with the correct legal split of property ownership and the drafting of Lasting Powers of Attorney means the majority of these issues can and are normally avoided.

The Alternative
Marriage/Civil Partnership – this involves personally taking responsibility for the legal and financial commitment of two people. The legality of marriage and this commitment is not only recognised but also rewarded by law, Tax and otherwise.