With the Marriage Foundation’s recent think-tank finding that the marriage gap between the richest and the poorest has widened to 51%, with only 20% of children born in low-income families being born to married parents as opposed to 71% of children born in high-earning families, it is important to consider the legal consequences of marriage vs cohabitation, including financial rights, property division, and inheritance rules for unmarried couples.
Marriage vs Cohabitation: Key differences
When you marry someone, you acquire a right to make a financial claim against their capital, pension and income on divorce. To find out more, read our article on asset division upon divorce.
When you live with someone, regardless of for how long, you will never acquire a right to make a financial claim against their earnings or pension assets like you would in a marriage. Cohabitation agreements can help protect your interests. As for their non-pension capital assets, there may be some limited circumstances in which you could make a claim. Read our article to find out what legal rights you have as a cohabitee to find out more.
Financial claims for a child of the family will always be available regardless of whether you are married or non-married.
What financial protection does marriage provide?
When you enter into a new relationship, it is hard to imagine it ending. But given the potentially far-reaching financial consequences of divorce, it is worth taking advice ahead of a marriage as to how to avoid the risk of a dispute in the event of the relationship breaking down.
As mentioned above, when you marry someone, you acquire a right to make a financial claim against their capital, pension and income on divorce. This can lead to the available resources being redistributed so as to prevent the financially weaker party suffering from financial hardship post-divorce. But for some couples, their idea of financial protection versus financial hardship does not align. In order to lessen the risk of a dispute over how the financial protections acquired on marriage are reflected in a divorce settlement, it can be helpful to enter into a nuptial agreement, prior to the marriage, that clearly details the parties’ intentions.
How are assets divided when cohabitants separate?
Although cohabitants may be able to make an application for a determination of the value of their financial interest in their jointly shared home under the Trusts of Land and Appointment of Trustees Act , the court does not have the same powers of redistribution of wealth as with divorcing couples. The law is considerably more prescriptive and does not require assets to be shared to protect the financial weaker party from being unable to meet their post-separation capital or income needs. To find our more on this topic, read our article of separating from a partner you live with.
What happens if my partner dies without a Will?
The estate of any person who dies with a valid Will, will pass as per the terms of their Will.
The estate of any person who dies without a Will, will be distributed according to the statutory rules of intestacy under which the order of priority is a surviving married partner or civil partner (followed by children and then parents, siblings, grandparents, uncles/aunts, and more distant relatives).
As such, if a non-married partner dies without a Will, the intestacy rules will not provide for their unmarried surviving partner to inherit. However, the survivor may still be able to make a claim against their estate if they can show that they were financially dependent on the deceased at the time of their death.
How can we help?
The team at Herrington Carmichael can advise you as to your financial rights and responsibilities whether you are considering entering into a cohabiting relationship or marriage, or ending your existing relationship. Contact us today.
