insideKENT Magazine Issue 70 - January 2018 | Page 130
LAW
ADVERTISEMENT FEATURE
Chris Wilkinson
IT PAYS TO BE
PREPARED
Despite the advent of the Cohabitation Rights Bill 2017, cohabiting
couples still need to plan for the future carefully, writes Chris Wilkinson,
a partner at law firm Cripps.
As the fastest growing family type in the last 20 years, cohabiting couples
now represent 3.3 million family units in the UK. But with no legal
recognition for ‘common law’ marriages, very few yet benefit from the
same financial and legal protections as those who are married or civil
partners. The Cohabitation Rights Bill may yet be some way off becoming
an Act, so what should good planning for cohabiting couples look like
in the meantime?
If you are cohabiting, but not keen to get married or enter into a
civil partnership, it is important that you fully consider your legal and
financial affairs, particularly if children are concerned. There are a
number of key steps you should take.
AGREE ON HOW YOU LIVE TOGETHER
Whilst not the most romantic of documents, a cohabitation agreement
will help set out the practical and legal aspects of your living
arrangements. Ownership of the property you live in and the proportions
in which you contributed to it should be agreed. It should also make
clear how the property should be valued or dealt with if one of you
wishes to leave or to buy the other out.
But a cohabitation agreement is not limited to the bricks and mortar
of your home; it should be viewed more broadly, seeking to set out and
avoid areas of potential day to day conflict as well.
Who pays the mortgage or utilities, even contributions towards
the grocery shopping, can (and in some cases maybe should) be
reflected. In the exciting early stages, who brought what to the table,
how the house is run and what might be taken into account if it all
goes wrong, are all too often overlooked. Clarity in a written agreement
will often help avoid the double heartache of a breakup and an argument
over the assets at the end.
With many couples seeking financial assistance from the bank of
Mum and Dad, a cohabitation agreement, coupled with a declaration
of trust setting out each party’s interests, will often be the best means
of recognising and protecting everybody’s investment in the relationship.
home, a simple accident could change your circumstances dramatically.
A Lasting Power of Attorney will ensure continuity in decision making
and avoid unnecessary anxiety and cost.
THINK ABOUT TAX AND PENSIONS
Whilst perhaps even less romantic than a cohabitation agreement,
being aware of the tax implications of ‘I do’ or ‘I don’t’ is essential to
good planning.
Married couples benefit from tax-free transfers between each other
during lifetime and on death. Unmarried cohabitees do not. Gifts made
to one another of property or assets can potentially trigger unwanted
tax bills. And, unlike married couples or civil partners, income tax reliefs
(using the allowances of the lower earning partner) are not available.
Tax relief should never be a reason to marry, but it can be a prudent
consideration.
And, in an age where there are no guarantees that a partner will
benefit from pension death benefits, even if their rights are specified,
the need to ensure that payment nominations are completed in favour
of your partner is key.
2018 may yet be the year when cohabiting couples’ rights are
increased, but fortune favours the prepared mind.
For further advice, contact Chris Wilkinson at
[email protected] or call 01892 506247.
Cripps LLP
22 Mount Ephraim, Tunbridge Wells, TN4 8AS
About Cripps
GET WILLS AND POWERS OF ATTORNEY IN PLACE
Unless you are married, there are currently no automatic rights for your
cohabitee to inherit your estate. A well drawn and considered Will is
therefore essential – even more so if you have any children. Defining
financial benefits, determining guardianship and ensuring continuity
in a home are not matters that any parent should leave to chance, nor
should the ability to manage each others’ financial affairs.
With many cohabitees retaining independence in individual
investments and bank accounts, a partner’s possible loss of capacity
should not be dismissed – however young you are. If you rely upon
the contributions of your partner in the day to day running of your
www.cripps.co.uk
@crippslaw
Cripps is a key regional law firm
serving clients nationally and
internationally from offices in Kent
and London. Recognised
countrywide for both its commercial
and private client work, Cripps is
listed as a top law firm by
eprivateclient. The firm focuses on
wealthier families, entrepreneurial
businesses and the real estate sector.
Find out more at cripps.co.uk
This article gives examples and is intended for general guidance only.
130