06.05.21

Deciding whether to get married, or enter into a civil partnership, is a big decision and aside the emotional side of things, couples need to consider a number of more ‘practical’ factors that are relevant to them.

We know that the number of couples getting married has declined and more couples are choosing to cohabit. However, whilst marriage is not for everyone, there can be issues for couples who choose not to. The implications of not being married may not be obvious but could cause significant problems.

What is the legal status of unmarried couples?

The first point to note is that there is no such thing as a ‘common law marriage’. Common law wife and husband are not legally recognised terms. This means that any couples living together do not automatically have any rights, even if the couple have been together for a significant period of time.

What about children?

For unmarried couples with children the implications may be more significant. Parental responsibility means having legal responsibility for your child until they reach the age of 18 and having the right to make decisions relating to the child. This will cover decisions regarding living arrangements, schooling, holidays and general day to day arrangements.

Here are the facts about parental responsibility:

• A mother will automatically have parental responsibility for her child from birth.
• A father who is married to the mother at the date of birth of their child will also have parental responsibility.
• A father who is not married to the mother of the child will only have automatic parental responsibility if the child was born after 1st December 2003 and he is named on the birth certificate.

Any fathers who do not have parental responsibility will not be able to make decisions for the child.  This may be an issue if the father wishes to arrange a holiday with the child or wants to be involved with discussions at school etc. The father can obtain parental responsibility by agreement with the mother or by applying to the Court.

What are the issues if an unmarried couple separates?

When an unmarried couple split up, the legal provisions are extremely limited when it comes to the support available to either individual.

Lisa Burton-Durham, specialist family solicitor and Collaborative Lawyer at Family Law Partners, says:

“Many people hold the belief that couples who live together in a settled relationship will, at some point, acquire the status of common law marriage and thereby obtain the same rights and obligations that they would have if there were married or entered into a Civil Partnership. However, this is not the case and as family lawyers we see time and time again when relationships break down the occurrence of complex issues (from finance to those involving children) where there are consequences of being unmarried that neither party had properly considered”.

If the home is owned by one partner only then there is no automatic right for the other partner to stay there. There is also no provision for one partner to pay maintenance to the other.

Neither partner can have a claim on the other person’s savings or pensions.

Whilst we don’t want to think about the repercussions of splitting up, unmarried couples really do need to ensure their financial affairs are reviewed and set up to protect both parties in this situation.

What happens to assets on the death of one partner?

There are set laws which determine who inherits your estate if you don’t have a valid Will in place when you die.  These rules, known as the Intestacy Rules, allow for your estate to pass to certain family in particular order.  This can include children, parents or siblings, but does not include an unmarried partner.

This means that a surviving partner will not inherit any assets that were owned solely by the person that died.  This can cause serious implications if, for example, the person that died owned the family home as this will not pass to the surviving partner on the basis that they were not married.

The only option for the surviving partner is to make a claim under the Inheritance (Provision for Family and Dependents) Act 1975.  This process will enable the Court to decide what provision should be made but this can be a long, expensive and uncertain process during an already difficult time.

It is essential for unmarried couples to make Wills ensuring that they make sufficient provision for each other and their families. As well as it being a sensible, pragmatic thing to do, many people also find it brings a real peace of mind to know that future plans have been considered.

Are there any tax issues?

As with all of the points listed above, the tax laws for unmarried couples are not favourable.

The law allows any transfer of assets between spouses and civil partners to be made free of Inheritance Tax and Capital Gains Tax liabilities.  This doesn’t apply for unmarried couples so any gifts between them may be subject to tax and, in particular, on the death of one partner there will be Inheritance Tax consequences.

Anything left by Will to the surviving partner may be subject to Inheritance Tax at the current rate of 40% on the value of those assets that exceed the deceased’s Inheritance Tax allowance.  If the couple had been married then any assets passing to the surviving partner would be exempt.  There could be significant tax liabilities depending on the type and value of assets owned by the couple and an unexpected tax bill for the surviving partner to settle.

Marriage or a civil partnership may not be for everyone, but unmarried couples need to understand the implications if they choose not to and should take steps to minimise any of the issues above.

For further information, or to talk to a member of our specialist team about planning for the future, please contact us: https://www.renaissancelegal.co.uk/contact-us