Cohabitation and marriage: what are the legal differences?

The growing trend of cohabitation over traditional marriage is a significant societal shift with more and more couples choosing this lifestyle. This alternative to marriage has been gaining popularity due to various factors. Some couples prefer to avoid the legal formalities associated with marriage, maintain separate financial affairs, and manage debts individually. The rising costs of living and the high average cost of a wedding are also pushing many to opt for cohabitation, thus saving on separate rents or mortgages.

However, it’s important to note the stark legal differences between cohabitation and marriage. Contrary to common misconception, there is no concept of common-law marriage or automatic safety net for s cohabiting couple. This could lead to potential risks, as those who choose this path might find themselves in vulnerable positions if the relationship ends, facing issues such as homelessness or financial hardship. Unlike married couples, cohabitees do not automatically acquire the same legal rights, even after long-term cohabitation.

While cohabitation offers benefits such as financial savings and flexibility, it’s crucial for couples choosing this path to be aware of the potential legal and financial implications, ensuring they understand the privileges, responsibilities, and potential pitfalls that come with their chosen type of relationship.

• What is cohabitation?
• Cohabitation agreement – a way to protect yourself
• Cohabitation Vs Marriage: what is the difference?
• Finances
• Children
• Financial support for parties
• Next of kin
• Inheritance
• Pensions
• Ending a relationship
• Cohabitation versus Marriage
• Cohabitee disputes
• What are the legal differences between cohabitation, marriage & civil partnerships?
• Harper Macleod family law team

What is cohabitation?

Marriage is the legal and formal union of two individuals, while cohabitation signifies two people living together without a marital or civil partnership status. The trend of cohabitation is on the rise, with many couples opting to live together, often as a precursor to marriage or for financial reasons. However, a prevailing myth around cohabitation is the concept of ‘common-law marriage’. Contrary to widespread belief, living together does not automatically accord the same legal rights and protections as marriage upon separation. This common law marriage misconception applies even when the couple has children or has been cohabiting for a significant period. As such, it’s crucial for individuals considering cohabitation to understand fully the legal implications and rights involved. Advocacy for enhanced legal protection for cohabiting couples continues, with calls for laws to adapt to the evolving societal trends and provide broader rights to these individuals upon relationship breakdowns. However, it’s important for couples looking into a cohabitation agreement to seek independent legal advice to avoid future cohabitation disputes and to ensure their own financial provision.

Cohabitation agreement – a way to protect yourself

A cohabitation agreement, also known as a living together agreement or cohabitation contract, is a legally binding document that sets out arrangements and protections for couples who choose to live together but are not married. It outlines the rights, responsibilities, and obligations each party has toward the other, both during the relationship and in the event of a separation.

This agreement typically covers matters such as the division of assets, property rights, shared finances, and parental responsibilities. It will often deal with arrangements for a jointly owned family home, for example where parties contribute unequally to its purchase or where one person moves into a property owned solely by the other. It can also address day-to-day financial management, care or residence of children and pets, and provisions for potential separation.

A cohabitation contract, properly drawn up, will operate as an enforceable contract. It therefore offers protection, security and peace of mind.

Those considering cohabitation should seek expert advice, from family law specialists, to understand their rights and responsibilities better. Family law solicitors can assist in preparing a cohabitation agreement and provide guidance on other protective measures.

Cohabitation Vs Marriage: what is the difference?

When evaluating the legal differences between cohabitation and marriage, there are several key areas to consider:

1. Rules of Intestacy: In the event of a partner’s death, a cohabitee’s property will pass to the individual named in their will, or to a specific family member if no will exists, in accordance with the Rules of Intestacy. If there is no valid will, the surviving cohabitee can make a claim, for a capital sum or property transfer order, provided the claim is made within 6 months of the date of death and they can show they were living together as a couple at the date of death. In contrast, a married partner will inherit most, if not all, of the estate.
2. Claims for Capital or Maintenance: On separation, a cohabitee can apply to court for payment of a capital sum if certain criteria can be met. Claims must be made within one year of the cessation of the cohabitation. It is only possible to seek payment of a capital sum. So, it is not possible to ask for transfer or sale of a property. Unmarried partners cannot claim maintenance for themselves, only for their children. Married couples, however, have broader claims to joint assets such as property, savings, and pensions.
3. Pension Sharing Order: Unmarried partners cannot apply for a pension sharing order for themselves unlike married couples.
4. Bank Account Access: In case of a partner’s death, cohabiting partners cannot access their deceased partner’s bank account, while married couples can.
5. Court Involvement: A cohabiting couple can separate informally without court involvement, whereas married couples require court engagement for a formal divorce.
6. Obligation to Provide Support: After separation, cohabiting couples are not legally obliged to provide financial support to each other, unlike married partners who can be obliged to do so in certain circumstances.
7. Matrimonial Home Rights: Unmarried partners do not have an automatic right to stay in accommodation owned by the other.. In contrast, each married partner can stay in the matrimonial home until the divorce process concludes, unless a court order is made suspending their occupancy rights. A cohabitee can apply to court for the grant of occupancy rights in a property owned by the other, for up to 6 months at a time but this is not an automatic right
8. Tax and Inheritance Benefits: Married couples can transfer assets to each other free from capital gains tax and inherit assets from their spouse free from inheritance tax.

In essence, cohabiting couples, regardless of their relationship’s duration or whether they have children together, lack the legal protections that married couples enjoy, in areas such as financial support, access to assets, and inheritance rights. These differences can lead to significant complications and potential financial hardship in the event of a relationship breakdown or partner’s death. Although there are limited remedies available using the court process, this can be an expensive. stressful and uncertain way forward.

For individuals considering cohabitation over marriage, understanding these legal distinctions is crucial, as the notion of automatic rights derived from cohabitation is a widespread misconception. For unmarried couples, especially those with children, careful planning and legal advice from a family law solicitor is strongly advised, in order to protect their interests and secure their financial futures in the event the cohabitating couple separates.

Finances

Cohabitation

When cohabiting with separate bank accounts, neither individual can access funds in the other’s account. Upon the death of a partner, the remaining balance becomes part of the deceased’s estate, inaccessible until the estate is resolved.

In the case of a joint account, both partners can access funds regardless of the contributor. If the relationship ends and ownership of the money is disputed, a court may need to intervene. If one partner never used the account (neither depositing nor withdrawing), claiming a right to the funds could prove challenging.

Under the circumstances where a partner dies, and account is jointly named, the surviving partner gains rights to the balance, maintaining unrestricted access. However, a portion of the balance will factor into the deceased partner’s estate value calculation.

Marriage

In marriage, a joint account’s money belongs to both partners, irrespective of the contributor, as long as they remain married. In the event of one partner’s death, the entire account instantly becomes the surviving spouse’s property. Both or either partner will be responsible for any debts or overdrafts linked to the joint account, regardless of who incurred them.

If each spouse maintains separate accounts, and one passes away, the bank may permit the surviving spouse to withdraw the remaining balance if it’s a small amount.

Debt Responsibility – Cohabitation and Marriage

You are only liable for debts solely under your name, and not for any that are solely under your partner’s name.
For joint debts or those under ‘joint and several’ legal responsibility, you may be held entirely accountable.
If you’ve guaranteed a debt for your partner, you are legally obligated to repay it.
In marriage, you’re not liable for any financial commitments or debts your partner incurred before the marriage.

Children

Parental responsibility and the rights which go with that applies to parents irrespective of their marital status and includes making key decisions on aspects such as a child’s home, health, education, religion, and financial matters. It’s a long-term legal obligation, until the child is 16 and with the responsibility to provide guidance and support lasting till the child is 18.

The obligation to support a child financially can continue until the young person is 25 if they’re in full-time tertiary education.

In cases where a separated couple cannot agree matters for their children, the court can be asked to make orders to determine arrangements for the children. Most commonly this will involve orders regulating with which parent the children live and when they have contact with the other. However, the court can also be asked to decide issues such as whether a parent should be allowed to relocate with the children away from the local area, which school or nursery the children should attend, arrangements for payment of private school fees or even whether a holiday should go ahead. parentr. It’s also noteworthy that both married and cohabiting couples have equal rights to apply for joint adoption. Whether married, cohabiting, or separate, all parents can ascertain their parental responsibilities on official governmental platforms.

Financial support for parties

Cohabitation

In a cohabiting relationship, there is no legal obligation for either party to support the other financially.

Marriage

During marriage, spouses have a duty to support one another financially. It is reciprocal and the duty can continue post separation (when it is known as “aliment”) and even in some circumstances after divorce (“periodical allowance”). It is possible to apply to court for an order in relation to financial support.

Next of kin

When entering the hospital or filling out life insurance forms, you may need to provide a next of kin. Though not legally defined, next of kin are typically recognized as spouses or close relatives by most organisations. However, a cohabiting couple may not always be acknowledged as such.

Recognition as a partner’s next of kin varies by organisation. Prisons and hospitals usually accept partners as the next of kin. Despite no one being legally able to consent to medical treatment for another adult (unless they’re unconscious or mentally incapable), doctors often consult the patient’s family, which can include your partner. If an organisation denies recognising your partner as next of kin, you can request a policy change.

Spouses are always authorised to act as next of kin, and doctors will generally include them in medical discussions unless the patient is incapable of consent.

Inheritance

Unmarried and married partners, alike, have a responsibility to protect their partner’s financial interests in the event of their death, typically achieved through the creation of a will. Without a will, the child of both married and unmarried parents will still inherit from both sides. However, in the absence of a will, an unmarried partner does not automatically inherit anything. It is possible to apply to court where a cohabitee dies without a will, so long as the application is made within 6 months of the date of death. If a property is owned jointly, check if the titles contain a survivorship destination meaning the other person’s share of the property passes automatically to the other on death, Also check to see whether there was life insurance in place or pension nominations (neither of which form part of the deceased’s estate but can still provide valuable assistance to the surviving cohabitee).

Married partners, on the other hand, will inherit under their deceased partner’s will if provisions have been made for them. In the absence of a will, the surviving spouse will still inherit some or all of the estate based on its worth. Importantly, unlike unmarried couples, married couples are exempt from inheritance tax on property inherited from their spouse.

A common misconception is that long-term cohabiting couples automatically inherit from each other’s estates. Contrary to this belief, there is currently no legislation to this effect. Unmarried couples also don’t have access to the tax reliefs or exemptions that married couples and civil partners enjoy, including those related to pensions. Therefore, the only way to ensure that assets are distributed in accordance with your wishes is by explicitly providing for the partner in the will.

Pensions

The occupational and private pension plans for the beneficiaries of a pension scheme member hinge on the scheme’s regulations. Many schemes provide advantages to dependent children, while some extend benefits to a dependent partner.

Individual pension schemes can be tailored to cover anyone the pension plan member designates, assuming the member can afford potentially substantial contributions to the pension pool.

In cases where a scheme is suitable for cohabitating couples, it’s necessary to fill out an ‘expression of desires’ form. This document declares your preference for who should receive the benefits upon your demise.

Even if a scheme doesn’t fit the needs of cohabitating couples, you may still receive assistance from scheme trustees or union representatives if you wish your partner to be the beneficiary.

Ending a relationship

When cohabitants separate, if they are unable to resolve the financial aspects through negotiation, it is possible to apply to court. The application must be made within one year of the end of the cohabitation. It is only possible to ask for payment of a capital sum, not for payment of financial support, nor for transfer or sale of a property. There are two possible heads of claim (you can apply for either or both).

The first head of claim is where one party asks for payment of a capital sum on the basis that he or she can demonstrate economic disadvantage. This involves the court in assessing whether and to what extent a cohabitee has derived economic advantage from contributions made by the applicant and whether and to what extent the applicant has suffered economic disadvantage in the interests of the other party and/or a child of the relationship. There are then offset provisions which need to be considered.  The first is the extent of any economic advantage the defender has derived being offset by economic disadvantage suffered by the defender in the interests of the applicant or a child of the relationship.  Secondly, the extent to which any economic disadvantage suffered by the applicant in the interests of the defender or a child is offset by any economic advantage the applicant has derived from contributions made by the defender.

Contributions include indirect and non-financial contributions. Economic advantage includes gains in capital, income and earning capacity but this is not an exhaustive list. Assessing whether a cohabitee has a claim, per case law, does not involve a detailed accounting exercise of who paid what over the course of the relationship. Case law suggests instead that the statutory provisions should be approached broadly and with a view to achieving the paramount objective of the legislation, being to make such award (if any) as the court considers appropriate in order fairly to compensate the applicant where in the course of the cohabitation either the other cohabitee has suffered a net economic advantage from contributions made by the applicant or the applicant has suffered a net economic disadvantage in the other’s interests. Case law over the years has shown that the court tends to have regard to where each of the parties were at the start of the cohabitation and where they were at the end.

The second head of claim is where a cohabitee has the economic burden of caring for a child under the age of sixteen years. This focuses on ancillary costs associated with a child’s upbringing, over and above board and lodging which is a generalised way of looking at child support. It is possible to claim under this head even where the other party is paying child maintenance. Ancillary costs typically include paying afterschool care costs, activities associated with education such as school trips, equipment, uniforms and the like. There is no set definition of ancillary costs though, it depends on each family’s circumstances.

The rights of a cohabitee are not the same as for a spouse. The orders which can be sought by a spouse on separation are wider. So, in the context of a divorce action it is possible not only to ask for payment of a capital sum but also for a property transfer order, pension sharing order and orders for payment of aliment and periodical allowance.

Cohabitation versus Marriage

Marriage, a civil partnership, and cohabitation offer varying degrees of legal protection and status to couples. While cohabitation is becoming increasingly acceptable, it lacks the legal endorsement afforded to marriages and civil partnerships. This difference comes into sharp focus in situations where a cohabitee dies or on breakdown of the relationship.

In the case of divorce or separation, married couples’ assets are combined into a marital pool with a default equal division (though there can be circumstances where an unequal division is appropriate). This safeguards individuals who might have been financially dependent on their spouses. Cohabiting couples, however, don’t have this entitlement, often leaving the financially dependent party in a challenging position. Anyone looking to enter into a prenuptial agreement or cohabitation agreement should seek legal advice.

Cohabitee disputes

Similar to divorcing marital partners, individuals living together who decide to part ways must determine the future of their shared home, manage their bill payments, ensure the mortgage is covered, and arrange for adequate financial support for their children. The residential property may be solely owned by one person, or owned jointly by both. In some instances, one person might want to sell the property, while the other would prefer to continue residing there. In the case of joint property ownership, it is typically presumed that each owner has an equal share, unless a formal agreement specifies individual ownership stakes. They also need to address the distribution of household items, family vehicles, savings, debts, and so forth. What legal entitlement do these cohabitating individuals have to shared property?

Unlike the process for divorcing couples where the default mode of division of the net matrimonial property is on an equal basis, the position for cohabitants is much less clear. Putting in place a cohabitation contract at the outset of cohabitation will, however, ensure certainty of outcome in the event the relationship breaks down. Making a will ensures provision is made for a surviving cohabitant.

What are the legal differences between cohabitation, marriage & civil partnerships?

Modern couples have various options to formalise their relationships: marriage, a civil partnership, cohabitation, or cohabitation agreements. Regardless of the choice, understanding the legal implications is crucial. Married couples and those in a civil partnership enjoy significant legal rights, identical for both same-sex and opposite-sex couples. On the other hand, cohabiting couples have minimal legal rights, often leading to misconceptions around “common law marriage”, which doesn’t have legal recognition. This can result in financial and legal challenges if the relationship ends, affecting matters like asset division and financial assistance. A cohabitation agreement is a legal document that can provide protection and peace of mind, setting out the division of property, bank accounts, debts, and joint purchases, among other matters. Couples must be able to make informed decisions about their relationship’s legal status, factoring in their individual circumstances and needs.

Harper Macleod family law team

For  couples seeking legal advice related to cohabitation agreements, reach out to our experienced family law team. We offer our expertise in cohabitation agreements as well as other aspects of family law, tailored to meet your unique needs. We understand that deciding to live together is a significant step in life, and we aim to provide you with the assurance and peace of mind you need in this important phase. Our team of experts can give you the advice and support needed for you to make the right decisions for you and your family. Contact Harper Macleod today and let our expertise guide you through this process.