A recently published report titled “The Rights of Cohabiting Partners” by a cross-party group of MPs called ‘The Women and Equalities Commission’ highlights the lack of protection for cohabiting couples and calling for reform to outdated laws to provide cohabitants with the same rights as married couples and civil partners.
One in five couples currently cohabit without being married or entering a civil partnership. This reportedly shows an increase in the last 25 years from 1.5m to 3.6m. Despite the increase in cohabiting couples in England and Wales, there remains a lack of legal protection upon relationship breakdown or on death of a partner.
A common misconception is that cohabiting couples automatically gain rights equal to marriage or civil partnership, such as where they have been living together for a certain period of time, or where households have children.
This is often referred to as ‘common-law marriage’ and is a myth. Cohabitants are not automatically entitled to their partners assets or the family home upon breaking up, which can be detrimental to the financially weaker partner. They also have to rely on complex property law and trust principles.
If cohabitants don’t have wills in place and one of them dies, the late partner’s assets will be distributed based on the intestacy rules to their next of kin – not to their surviving partner.
If the late partner was the sole owner of the property, this could mean that the whole property would pass to their next of kin, placing the surviving partner at risk. Alternatively, if they co-owned the property with their surviving partner, this could result in the surviving partner co-owning the property with their late partner’s next of kin.
The surviving partner may need to make a claim against their partner’s estate and under the Inheritance (Provision for Family Dependants) Act 1975 providing they can demonstrate they were financially dependent upon their late partner.
Cohabitants also do not benefit from the same exemptions to Inheritance Tax as married couples or civil partners, which could mean the property may need to be sold to meet the tax liability if there are not sufficient cash reserves.
The report also calls for clearer guidelines setting out how pension schemes should treat surviving cohabiting partners including what those partners are entitled to and what evidence they will need to access the pension.
It is therefore strongly advised that cohabitants sign wills to ensure their surviving partner is provided for and advice is obtained where necessary.