Unmarried Couples
Unmarried couples are also known as cohabiting couples or common law partners. Although couples living together without the ‘marriage’ ceremony is popular and more widely accepted in society today, it still has it’s drawbacks. If you are part of a couple but are unmarried or do not have a civil partnership, then you DO NOT have the same rights as a legally married partner when the relationship comes to an end or when one partner dies. You cannot apply for spousal maintenance, property adjustments, and pension sharing, to name a few. However, you do have rights to apply for maintenance and provisions for any children within the relationship.
WHAT IS A LIVING TOGETHER AGREEMENT AND IS IT IMPORTANT TO HAVE ONE?
A living together agreement is also called a cohabitation agreement. It is also known as a ‘no-nup’. This agreement can be drawn up by a solicitor and is very important for a couple who intend to live together, but not marry. It is intended to safeguard both partners and any children within the partnership during the relationship and when the couple decide to part. For the sake of a few hundred pounds, please do not ignore this document.
A living together agreement will do the following –
- Protect all assets acquired by both partners before living together.
- Cites how all living expenses, including bills, mortgages, repairs, food, and holidays will be paid for and by whom.
- Cites what will happen if one partner loses their job or income, or falls ill and cannot work.
- Cites what will happen when one partner dies.
- Cites how debts and assets acquired within the relationship such as, pensions, life insurances, and bank accounts will be shared if the relationship comes to an end.
- Cites how the ‘earning’ partner will support the ‘non-earning’ partner if the relationship comes to an end.
- Cites child arrangements and how the children will be financially supported if the relationship comes to an end.
- Wills will be noted in the agreement.
- What will happen to any pets if the relationship comes to an end.
Please note – similar to wills and many other documents, a living together agreement can be updated or modified at any time. This should be done at regular intervals in the relationship to make sure it is up to date.
CAN YOU HAVE A LIVING TOGETHER AGREEMENT NOW EVEN THOUGH YOU BOTH ALREADY LIVE TOGETHER?
Yes. The sooner you do it, the better.
WHAT ADVANTAGE DO UNMARRIED COUPLES HAVE OVER MARRIED COUPLES?
As of August 2021, when this Help Guide was written, unmarried couples have one advantage over married couples. When calculations for tax are being made as marital assets are sold during a divorce, unlike married couples who can claim one private residence relief (PRR) for capital gains tax (CGT), unmarried couples are treated as single individuals and each have their own PRR. This means they may not have to pay capital gains tax if the couple own more than one home and one of them is sold.
To understand the above terms (PRR and CGT) please click on the link below.