Legal/Finance
Debunking legal myths about common-law partnerships
11th March 2010
with Collette Bailey, of Gardner Leader
Is there such a creature as a common-law wife? Collette Bailey, partner in the family team at Gardner Leader LLP solicitors in Newbury, clears up some common misconceptions about the rights of unmarried partners and their entitlements if they should separate.
The common-law wife does not exist as far as English law is concerned. Marriage or a Civil Partnership (for same sex relationships) gives parties certain legal rights.
Merely living together does not, although you can enter into a Cohabitation Agreement setting out the terms of your relationship. It may not sound very romantic, but it can save a lot of trouble later on.
I am frequently asked about the legal position in relation to cohabiting couples and am aware that there are many incorrect assumptions that cloud this area.
If a couple, who are not married and have not entered into a Civil Partnership, buy a property together in joint names, their respective interests in the property are recorded on the title document. Careful thought should be given to this and if one party has contributed a greater sum towards the deposit and has the burden of paying the majority of the mortgage, then they may wish to protect their interest by way of a Declaration of Trust.
If a property is bought in one person’s name and the other party makes a contribution to it, it is the nature of these contributions that are important. Should there be a dispute and the matter proceeds to court, the court will try to establish what the parties’ intentions were when they bought the property. A capital contribution to the purchase price or home improvements is very relevant and would enable one party to acquire an equitable interest in the property. Contributing to household expenses, payment of bills, doing housework, gardening and decorating will not count. If an interest in the property is established by means of a financial contribution, the court will examine the relationship and level of conduct between the couple and try to determine who gets what when the property is sold.
If the relationship breaks down and an unmarried couple have children, there would be obligations in respect of maintenance for the children and in certain situations, there could be an order for a lump sum to be provided for the children to be re-housed.
Cohabiting couples should also consider how a split might affect their entitlement to a business concern. It may be that this is how the couple have arranged their affairs and one of them may do the accounts or provide some secretarial assistance for the business either on a paid or unpaid basis. Depending upon the nature of the arrangements, you may have to consider whether this gives rise to employment rights or if it could be argued that they are a partner and are entitled to a share of profits.
One never knows what might happen to the relationship in the future and it may be prudent to make your intentions clear – and in writing whenever possible – about interests in a property or business, in case you should separate in the future.
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