Here at Napthens our conveyancing department has been busier than ever and it would be hard not to attribute this flurry to the government’s stamp duty ‘holiday’. This ‘holiday’ means buyers will pay zero stamp duty on the value of a property up to £500,000 until the end of March 2021. It is an excellent incentive for buyers and will no doubt encourage those couples that were thinking of taking the plunge and moving in together to take advantage of the stamp duty hiatus.
For those couples moving in together, it is an exciting time and there are plenty of decisions to be made. Which wallpaper for the hall? Which broadband provider to choose? Does the kitchen and dining room need knocking through? Unsurprisingly, a question that cohabiting couples do not often ask is ‘what happens if we don’t live happily ever after?’. It is by no means a romantic question but it is an important question to ask.
Cohabiting couples are the fastest growing ‘family’ type in the UK. Even No.10 Downing Street is home to its first cohabiting family!
It has become the norm for couples to live together before they marry. As the saying goes, you don’t really know someone until you live with them – but in fact, many couples choose to cohabit long term without getting married.
There is an important consideration however, as cohabiting couples often mistakenly believe that they share the same rights as a married couple. In reality a ‘common law’ spouse does not exist.
If a couple are not married then they do not have legal rights in a relationship unless there is a Statutory Declaration of Trust or Cohabitation agreement in place:
Statutory Declaration of Trust
A Statutory Declaration of Trust sets out agreements regarding the ownership of a property. A Statutory Declaration could include terms such as how the mortgage will be paid. For example, one person will pay more towards the mortgage because the other person provided the deposit.
A Statutory Declaration can also be used to protect a previously owned home which a partner moves into, by either agreeing that the partner does not have an interest in the property, or if they do, to what extent.
It is not uncommon for a couple to receive some financial help from family members towards a deposit or perhaps renovations of a property. If for example the financial contribution came from one person’s parents, the Statutory Declaration could stipulate that in the event that the relationship ends, the money is to be paid back to the parents from the proceeds of sale when the house is sold.
A Statutory Declaration relates only to the house, but a Cohabitation Agreement can cover a much wider net of topics that couples may have to consider. A Cohabitation Agreement can include everything from who keeps the car or the dog if the relationship ends, to who is nominated for death in service benefits, through to who will pay the water bill.
Whilst talking about a Statutory Declaration or a Cohabitation Agreement may not be the pillow talk topic of choice for most cohabiting couples, it is a conversation that should happen. If the relationship is a long and happy one, then a Cohabitation Agreement can set out some ground rules to prevent future arguments and can provide some security for the couple. If the relationship does end and an agreement is already in place, each person already knows where they stand and this can avoid uncomfortable discussions.
If you would like to find out more then please contact our family department.
It is also important to consider if you are part of a long-term cohabiting couple and wish your partner to benefit from your estate, that you ensure your Will reflects your wishes. Our Wills and estate planning team can provide further advice on this.