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