From cars to credit cards: who owns what when a couple lives together?

Who legally owns assets or debts when a couple lives together? During Cohabitation Awareness Week 2017 (27 November to 1 December), Sarah Evans, family lawyer at Coodes Solicitors outlines some of the legal differences between being married and living together.

When a couple lives together, the position regarding who owns any assets and debts is relatively straightforward – it is whoever took on ownership initially. That sounds easy to manage. However, there are frequently situations when a substantial purchase, like a car or piece of furniture, is bought and registered in one person’s name despite the money having come from joint assets. Unless this can be traced via bank accounts, this can leave someone who has put considerable means into a significant purchase losing out.

Who is responsible for debts when a couple lives together?

With married couples and cohabitees, one spouse or partner is not legally responsible for the debts of the other. Where one person takes out a debt such as a loan or credit card in their sole name and the funds are used to provide for both parties, there is little they can do to should they then separate. Where debts are held in joint names – for example, with a joint mortgage or overdraft – both people are considered ‘jointly and severally’ liable by the law. This means that the debt provider can pursue both partners for the whole amount of the debt. If one is working whereas the other is unemployed, they may well find that they are pursued as being a better option for the debt to be recovered against.

No entitlement for maintenance or financial support between cohabitees

After living together for years, someone who has not worked because they have taken the role of bringing up the children and maintaining the home, may find themselves without an income or good job prospects. What is often not appreciated is that – unlike with divorce – there is no entitlement for maintenance or financial support between former cohabitees.

There is also no entitlement to achieve a share of pensions, as there is for married couples. Again this means that someone who has not worked and built up a pension is unable to secure any of a former partner’s pension and will find themselves not provided for later in life.

Why a Will is vital for cohabiting couples

Finally, a cohabitee is not automatically entitled to any of the assets of a partner who has passed away. If the house is held in the deceased partner’s name they will have no legal right to remain there unless there are Wills in place providing for them to remain in the property. In the absence of a Will the state decides who should inherit under the Intestacy Rules. And a cohabitee has no rights under intestacy.

Those planning to live together should consider all of these issues. Many of the potential pitfalls can be prevented by a clear and legally binding Living Together Agreement and by having a properly drawn up Will in place.

For advice on any of these issues, please contact the Family Team at Coodes Solicitors on 0800 328 3282.