Unmarried couples and what would happen to their assets on relationship breakdown

Unmarried couples who live together face unique legal challenges when it comes to the division of assets in the event of a relationship breakdown. Unlike married couples, unmarried couples don’t have the same legal rights or claims over each other’s property.

In this blog, we'll explore the legal framework surrounding unmarried couples and their assets, including the initial position, types of property ownership, how to acquire rights if the property is only owned by one party and cohabitation agreements.

Initial position

In England and Wales, cohabitating couples don’t have any rights in respect of sharing property or financial assets, nor do they have any ongoing financial obligations towards one another if they separate. Any assets which are held jointly will be split in accordance with their legal ownership.

The position differs slightly where children are involved. In circumstances where cohabitating couples have children and then decide to separate, a parent can make an application under Schedule 1 of the Children Act 1989 for maintenance, a lump sum payment or transfer of property order. These provisions are for the child only. The applicant parent doesn’t have the right to financial support for themselves.

There is often a misconception of “common law marriage” which is widely referred to in the media. This is, however, not recognised under UK law. Therefore, no matter how long a couple have lived together or whether they have children or own property together, they will not have the same legal rights and protections as their married counterparts or those in civil partnerships.

Shared property

Property rights for cohabitating couples can be complex and depend on various factors such as how the property is owned and any legal agreements in place. Generally speaking, when more than one person purchases a property, they will hold the property as either “joint tenants” or “tenants in common.”

Cohabitating couples as joint tenants – If the property is held as joint tenants this means that the couple will be considered equal owners with an equal share in the property. Should a cohabitating couple decide to separate, the property would be divided 50/50 between the two of them.  

Cohabitating couples as tenants in common – Where a couple owns a property as tenants in common, they each will own an identifiable share of the property. These shares don’t have to be equal and can instead reflect the individual’s contribution or preferences. Accordingly, were a cohabitating couple to separate, each individual would walk away with their distinct share of the property. For example, a 70/30 split. Some couples may choose to document their shares in an agreement such as a Declaration of Trust so that their intention is clearly set out at the point of purchase.

A Declaration of Trust is a legal document used in property ownership to specify the ownership structure and beneficial interests of a property. It can outline any contributions, rights and any agreed upon arrangements for property division. Subsequently, a Declaration of Trust can be a valuable document for cohabitating couples to ensure their respective interests and financial contributions are protected and can prevent disputes and provide clarity in the event of separation.

Where one owns property – how to acquire rights?

If a property is owned solely by one partner, that individual generally has the legal right to the whole property. However, there are ways in which one can acquire rights in a property that the other cohabitee owns by establishing a beneficial interest. This can happen in a number of ways but the most common is by way of the un-owning party making a financial contribution.

Financial contributions can include, but are not limited to:

• making mortgage payments,
• contributing to refurbishments or
• paying household bills and expenses.

Establishing a beneficial interest can be a complex legal matter and can vary depending on individual circumstance and therefore it is advisable to seek legal advice to better understand any rights.

This is a particularly complex area of the law and you should seek independent legal advice if you find yourself in these circumstances.

Cohabitation Agreement

A Cohabitation Agreement is a legal document designed to protect the legal rights of unmarried couples. This would usually be drafted at the outset to specify what would happen if the couple were to separate to ensure that both parties have a full understanding of the position and to avoid any uncertainty on separation. It might be equated to a “Prenuptial Agreement” on marriage.

Unmarried couples who live together should be aware of their legal rights and obligations when it comes to the division of assets in the event of a relationship breakdown. While the law surrounding unmarried couples is different from that of married couples, there are still ways to protect your interests and ensure a fair outcome.

Whether you are looking to acquire rights to a shared property or considering a cohabitation agreement, speak to us to understand your options.