Living together
In the first of a series of articles and accompanying videos exploring the life cycle of a couple's interaction family law, Emily Brand explains some simple steps couples who start living together can take to protect their finances should the relati
Moving in with your partner is a significant step in any relationship, showing that the levels of commitment to each other are deepening. However, there are some common pitfalls that need to be considered.
This new chapter in a shared future brings some major and far-reaching decisions that need to be made. The purchase of a new home, for example, is singularly the biggest transaction most people make in their lives. The steps you take now may have significant consequences should the chapter fail to have a happy ending.
Legal myth
Prudent couples should take steps to protect the cash and assets they bring into a relationship. But first, let's put to bed a common misconception.
There is no legal concept of a 'common law marriage'. Even if you have been living with your partner for 60 years, you will not be married under common law. This means that you will not automatically be entitled to any financial provision if you split up, even if you are engaged to be married or have been living together for years.
Whose house?
If you and your partner decide to buy a property and move in together, it is critical that you are clear as to how you hold the property and who will be entitled to the proceeds on a sale, as this often causes the most difficulties later on if the relationship breaks down.
If you have contributed more to the purchase price or the bank of mum and dad have paid the deposit, you may want to consider buying as 'tenants in common', as well as entering into a 'declaration of trust'. This will establish exactly what percentage of the beneficial interest you and your partner respectively have in the property. This is a way to ensure that you receive your fair share if you sell the property at a later date.
If the property is held in joint names and there is no declaration of trust, it will normally be assumed that you and your partner intended to share the proceeds of sale in the property equally. If this is not what you intend, then it is important to establish this at the outset by way of a declaration of trust.
If, on the other hand, your partner contributes more to the purchase price than you but it is agreed that you will contribute subsequently through mortgage payments, then this agreement will also need to be reflected in a declaration of trust.
If the property is held in your partner's sole name and there is no declaration of trust, you will need to prove that there was a common agreement for you to have a beneficial interest in the property.
This is by no means guaranteed as it can be difficult to prove, and you may lose out on any financial provision if your relationship ends and your partner refuses to share the equity in the property with you.
You might also acquire an interest in the property if you have paid for any works or improvements. These 'improvements' must be identifiable and be contributions of money or 'money's worth', for example your labour or the purchase of building materials for your home.
To avoid any potential future arguments, if you are intending to purchase a property jointly with your partner or to move into a home which she or he owns, then it is sensible to agree in advance what your interest in the property will be, or if you will acquire an interest in the property by, for example, contributing to the monthly mortgage payments.
Clarity is also essential when it concerns large joint purchases and joint bank accounts. Will the payments into the account be equal, and if not, will the money in the account be considered to be equally owned? If two people are named on a bank account, this normally means that either can withdraw monies and not necessarily equally (regardless of who has paid the money in).
Cohabitation agreements can be useful as a means of evidencing your intentions in these matters.
Whatever the circumstances, if you are engaged or simply cohabiting, it is vital that you outline what you have contributed to the relationship and seek legal advice in the process, as otherwise you may lose out if all does not go quite to plan.
Emily Brand is a partner and head of the Family team at Winckworth Sherwood