LEGAL

COHABITATION AND COMMON LAW MARRIAGE

Many couples believe that moving in together creates a common law marriage, giving you the same rights as if you were married. It does not the concept of common law marriage has no legal validity in the UK. In reality, moving in together does not give you automatic rights to each other’s property, no matter how long you live together. Conversely, however, if a cohabiting couple separates and there are children involved, both cohabiting partners may have rights and responsibilities. Problems can occur, particularly when one of you moves into a property the other owns or rents. The property owner is the only one entitled to live there, anyone else can be asked to leave. Cohabiting couples have no legal duty to support each other financially, either while you are living together or if you separate. Nor do you automatically share ownership of your possessions, savings, investments and so on. Cohabiting partners have no automatic right to inherit if their partner dies, although they may be a beneficiary under the other’s will. If you are a beneficiary, any assets you receive may be subject to inheritance tax - there is no exemption for unmarried couples. If you have lived together ‘as man and wife’ for at least two years or if you can show that you were financially dependent on your partner, you can make a claim for a financial settlement even if you were not a beneficiary of the will. However, making a claim can involve a complex and expensive dispute with the other beneficiaries. If you owned your home together, the form of legal ownership has a major impact. If you owned your home as ‘joint tenants’, you will automatically continue to own the (entire) home if your partner dies. But if you were ‘tenants in common’, your partner’s share is dealt with under the terms of his or her will. Written agreements can help to protect you from potential risks if you separate or your partner dies.

SWANSEA | MUMBLES CARDIFF

01792 65 00 00

The Dunes Business Centre, 267 New Road, Porthcawl CF36 5BG

PROPERTY OWNERSHIP AND TAX PLANNING

There are many factors to consider when deciding how best to leave property on death and this should be explored as part of a wider discussion about tax and estate planning as a whole. Jointly owned properties are held in one of two ways, the first being as joint tenants, which means that on the death of the first joint tenant, the property will pass automatically to the surviving joint tenant, regardless of the terms of any will or the intestacy rules. This transfer will be exempt from Inheritance Tax as the spousal exemption will apply. It will also pass without the need for a Grant of Probate. The second way is as tenants in common, when both parties own a distinct “share” in the property – this can be 50-50 or any other split, which would usually be recorded in a Declaration of Trust. On the death of the first tenant in common, his or her share in the property will pass in accordance with his or her will or intestacy. A property held as tenants in common may, of course, still pass to the surviving spouse on the first death, if the deceased spouse left his or her share of the property to the surviving spouse in his or her will, in which case spousal exemption would still apply. Alternatively, a trust can be set up for the benefit of the surviving spouse for the rest of his or her lifetime, allowing that spouse to live in the property but not own the deceased’s share of it. There may be many potential benefits of doing this such reducing the Inheritance Tax liability on the spouse’s death, to claim the residence nil rate band and to provide certainty as to where the share passes after the surviving spouse’s death.

MADELINE RAND King Davies & Partners

WHITTINGHAMS

SOLICITORS • CYFREITHWYR

CONVEYANCING Moving House?

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Richard Deere House, 46C John Street, Porthcawl CF36 3BD Tel: 01656 788823 Fax: 01656 786781 Email: porthcawl@whittinghams.co.uk Web: www.whittinghams.co.uk • Wills, Trusts & Probate • Conveyancing • Property Law • Housing • Family

Partner Mr. Ceri Morgan L.L.B Tel: 01656 732911 Email: info@kingdavies.co.uk www.kingdavies.co.uk

Associate Madeline Rand BA

Lloyds Bank Chambers, 18 Talbot Street, Maesteg, Bridgend, CF34 9BP

Family Solicitors

Melanie Lazarus & Co Solicitors are the only specialist Family Solicitors in Bridgend. Specialising in Divorce, Separation, Cohabitation, Civil Partnerships, Financial Disputes, Children & Pre-Nuptial Agreements Fixed Fee Initial Appointment £270 inc VAT Fixed Fee Divorce £600 inc VAT (excluding Court fee – T&C’s apply)

Your Questions Answered

Question: I have split up from my wife but don’t wish to file for Divorce at the moment. I would like to have some sort of Separation Agreement in place setting out what we have agreed on the division of our assets? Is this a good idea?

Answer: My firm advice to you is NOT to proceed by way of a Separation Agreement. They are not 100% legally binding. I advise you to file for Divorce when you are ready and then to obtain a Clean Break Order which can set out what you and your wife have agreed. The reason for this is that Separation Agreements can be overturned by a Court on subsequent Divorce proceedings if the terms agreed are deemed unfair or if the circumstances of one of the parties have dramatically improved or worsened. This is far from ideal. You will also incur the cost of your Solicitor drawing up the Separation Agreement only to then be advised on the Divorce to obtain a Clean Break Order. It is important that you ensure that neither party can make a claim against the other in the future in both life and death. Clean Break Orders can be submitted to the Court when you reach the Conditional Order stage of the Divorce, that is, the middle stage. At that point, the Judge will consider the Clean Break Order and if it is considered fair, will approve the same. Clean Break Orders can be refused if a Judge considers the agreement unfair to one party but your solicitor will usually warn you if there is risk of this. Once a Clean Break Order has been approved, you have the security of knowing that future claims will be barred unless in the most exceptional circumstances.

For further advice, please don’t hesitate to contact us on

Tel 01656 750 888

Email: melanielazarus@mlsolicitors.com www.mlsolicitors.com Ground Floor Offices, 38-40 Nolton Street, Bridgend, CF31 3BN