Marriage and Cohabitation – Is there a difference?
Is there a difference between marriage and cohabitation from a legal point of view?
There is a common yet mistaken belief that couples who have cohabited for a few years suddenly have the same legal rights as couples who are married. The phrase ‘common law husband or wife’ is often used. It is only when something happens that the legal reality of cohabitation is revealed and sadly it is often then too late to resolve the situation.
So what happens if a cohabiting couple decide to separate?
If a couple decide to separate then decisions need to be made on who owns what and this may not be straight forward irrespective of whether the couple are married or not. However where there is an owned property there is a clear distinction in law as to who has rights over the property and this can give rise to unexpected consequences.
If you live in a property that is owned by your partner and you are not married, you legally have no interest in the property as of right when you separate, irrespective of the length of time that you have been living together. This will be the case even if you have children together.
To make your intentions clear, from a legal perspective, it is advisable to have a Cohabitation Agreement in place. This will document the assets you brought to the relationship and how you expect assets to be divided should you separate. Intentions regarding any children can also be incorporated into the Agreement.
What happens if your partner is taken ill or has an accident?
When you get married your partner automatically becomes your ‘next of kin’ and as such doctors and hospitals will give you medical information. Although there is no statutory definition of the term 'next of kin', cohabitees can be treated differently. Many hospitals are reluctant to discuss medical matters with people who are not spouses or blood relatives.
What happens if your partner suddenly dies?
If there is a legally binding Will then your partner’s wishes will be honoured irrespective of whether you were married or cohabiting.
If there is no Will but you were married then there are clear legal guidelines as to how the Estate should be distributed. Where there are children or grandchildren, the surviving spouse inherits the first £250,000, all personal possessions, and half the remainder of the estate and the children get the rest. If there are no children or grandchildren the surviving spouse gets the whole of the estate including the personal possessions.
If there is no Will and you were cohabiting at the time of death, you will get nothing.
It is therefore always advisable to make a Will, whatever your circumstances.
Sadly though, even if there is a Will, Inheritance Tax rules make a clear distinction between married couples and cohabitees.
For married couples, on the death of their partner, the surviving spouse will suffer no Inheritance Tax on the assets he or she inherits.
For cohabitees, on the death of a cohabitee, the surviving partner would have to pay Inheritance Tax of 40 per cent on all assets left to them that are above their Inheritance Tax personal tax threshold. This can cause real problems if the deceased partner's share of the family home is worth more than the Inheritance Tax threshold.
If you would like confidential help and advice on any of the matters mentioned above or on any other areas of Family Law call your nearest office in Uxbridge (01895 256151), Ruislip (01895 636037) or Greenford (020 8578 6936), email firstname.lastname@example.org or fill in the Family Enquiry Form.