Financial Provision for Unmarried Couples in the UK

Financial Provision for Unmarried Couples in the UK

In the United Kingdom, the concept of ‘common law marriage’ does not technically exist. In terms of their legal rights and obligations, cohabitees are treated entirely differently to conventionally married couples.

Irrespective of how long two people have lived together and how intrinsically their lives are entwined, they are effectively considered single in the eyes of the law. This can cause major complications in the event of separation, where cohabitees are treated entirely differently to a divorcing couple.

Financial Provision for Unmarried Couples in the UK

Unmarried couples also do not have the same rights as married couples to claim capital or maintenance against their partner, no matter how long they have cohabited.

Of course, unmarried cohabitees do not have to endure the unpleasantness associated with divorce proceedings. However, they may find themselves embroiled in the same kinds of financial disputes and disagreements as a married couple.

Allocation of Assets

This is where things become problematic, as there is nothing enshrined in law with regard to distribution or allocation of assets. With a married couple, divorce proceedings usually start out with an equal 50/50 split of all marital assets. After which, arguments may be put forth by both partners as to why they feel they deserve a greater share than their spouse.

With a cohabiting couple, separation results in both partners holding on to their own personal wealth and assets. The longer a couple has been cohabiting, the more complex the issue. For example, in the event that one partner owns the family home, but their spouse has made a significant contribution to its maintenance and upkeep.

Even more complex issues may be encountered where cohabitees have one or more children. If a mutually amicable decision cannot be reached between the two partners, the dispute may need to be taken to court.

Cohabitation Agreements

One of the best ways of preventing potential disputes like these from occurring is to consider a cohabitation agreement. Entering into a cohabitation agreement is largely the same as signing a prenuptial agreement.

Early in the relationship, or at any preferred time, the partners can draft a detailed agreement outlining their entitlements and obligations. Penned under the supervision of a solicitor to ensure it is legally binding, a cohabitation agreement can be used to specify how all wealth, assets and property will be distributed in the event of separation.

Once the document has been signed, it becomes legally binding and forms the basis of the proceedings that take place, should separation occur.

Where no such cohabitation agreement has been signed, a couple will have no choice but to consult with solicitors. Mediation will usually be recommended, as an alternative to complex and costly court proceedings. Should court intervention become necessary, extensive analysis of the relationship and each spouse’s financial contributions will be conducted, to allow appropriate allocation of shared assets.

As this can put a major dent in the personal wealth of both partners, it is always considered a last resort and should be avoided where possible.