August is the most popular month to tie the knot in the UK. However, since the early 1970s, the number of people actually getting married has steadily decreased, dropping a further 3.4% in 2017. There have been many theories about why marriage rates are falling, but whatever the reason, the fact remains that fewer people are formalising their relationship.
In 2016 there were 3.3 million cohabiting couples, making it officially the fastest growing family type, more than doubling from 1.5 million just 20 years ago. The trend is not confined to younger people: last month the Office for National Statistics revealed that the number of cohabiting couples in their sixties and seventies has never been higher.
There are serious misconceptions about cohabitation: a 2017 ComRes survey revealed that only one in three couples knew there was no such thing as ‘common law’ marriage. Contrary to popular belief, couples who live together do not have the same legal rights as married couples when a relationship breaks down. This belief is widespread, with nearly 98% of professionals from Resolution, the national organisation of family lawyers, reporting that they have worked with a former cohabitant who they were unable to help at all because he (or more usually she) had no basis for a legal claim against their former partner. A further 90% said that clients are often surprised to find out about their lack of rights when a cohabiting relationship comes to an end.
With nearly a third of these 3.3 million cohabiting couples living in London and the South East, high property prices mean that many parents help their children financially to get on the property ladder by contributing in whole or in part towards a deposit. Often, a property is bought or lived in jointly with a partner which can cause concern for the parents if the relationship later breaks down.
A lack of clarity about whether the parents provided the money as a loan or a gift to their child, and if there were any conditions attached to it, can lead to difficulties. One way for parents to protect their loan or gift and ensure that it does not have to be shared with their child’s partner if the couple split up is by ensuring that a cohabitation agreement is signed by the couple before any money changes hands. Amongst other benefits, a cohabitation agreement can set out what is agreed in relation to money received from relatives, or where one partner contributes more money than the other to a joint purchase, helping avoid future complications and costly litigation if the couple split up.
Similarly, for cohabiting couples who decide to marry, it may be prudent for a pre-nuptial agreement to be prepared if one partner has significant inheritance prospects or brings much more wealth to the marriage than the other. A ‘pre-nup’ can give them clarity about which assets are to be shared and which ring-fenced if there is later a divorce.
Jane Craig, head of the family department at leading law firm Penningtons Manches, and a former chair of Resolution’s cohabitation committee, is supporting the organisation’s campaign to raise awareness and is encouraging cohabiting couples to take steps to protect themselves and their families.
Jane explains: “If an unmarried couple breaks up, they are not both automatically entitled to share in what they may have thought were their joint assets, such as the house they lived in together, even if they both contributed to the payment of household bills and the upkeep of the property, if one of them isn’t named as an owner on the deeds. This applies regardless of how long they have been together or whether they have children. Although parents have financial obligations towards their children, there are no equivalent responsibilities towards a former partner.
“When the ‘Bank of Mum and Dad’ assists in the purchase of a property jointly owned by a couple it is essential that the parents document the basis on which money is given or loaned and what happens to it if the relationship ends. Otherwise they could be saying ‘goodbye’ to thousands of pounds. They should insist that the couple sign a cohabitation agreement confirming what has been agreed before handing over any cash.
“A motion to bring our laws in line with modern family types is currently supported by 23 MPs from all the main parties, so the Government does have an opportunity to update the legislation should it choose to do so. In the meantime however, couples need to be made aware that rights do not exist through ‘common law’ marriage, so that they can take appropriate steps to protect themselves. A cohabitation agreement is a simple and cost effective way to get financial peace of mind without marrying or forming a civil partnership.”