Breaking up is never easy, but it can be a particularly tricky situation when cohabiting couples decide to part ways. It can be hard to know where to turn for advice and support, as well as how to go about fairly splitting up your finances.
Here, Anthony Jones provides practical advice on some of the steps that separating cohabiting partners can take to ensure finances are dealt with in an appropriate manner.
In the first instance, it is important to remember that if you are not married, there is no such thing as a ‘common law spouse’, so a couple that is separating don’t have the same rights as married couples who are seeking a divorce.
To help ensure that your finances are dealt with fairly in the event of a break-up, each party should create an up-to-date record of all joint assets, such as bank accounts, property and investments, as well as any debts that are jointly held. It is also important to ensure that each partner’s contribution to the relationship is recognised; for example, if one partner has contributed more financially than the other, then this could be taken into account when deciding how to split the money.
If you are unable to come to an agreement on your own, then it may be worth seeking the advice of a solicitor who can help to negotiate a financial settlement that is fair for both parties. A solicitor can also advise on any future that should be made, such as child maintenance payments.
It is important to remember that any agreement reached should be put in writing and signed by both parties. This will ensure that both parties are legally bound to the agreement and can be used as evidence should any disputes arise in the future.
Where a property is owned by one/both of the parties, it will need to be agreed who will stay living in the home. This will largely depend on how the property is owned. If the property is solely owned by one owner, they have the legal right to stay in the home. However, the other partner may be able to claim a ‘beneficial interest’. If the property is owned jointly, both parties have equal rights to stay in the home and this will need to be decided and an agreement made as to what will happen on an ongoing basis regarding the ownership and any mortgage payments.
To avoid uncertainty and potential dispute at the point of a split, cohabiting couples are increasingly looking towards to provide clarity. This is a legal document between unmarried couples who are living together that sets out arrangements for finances, property and children. Cohabitation Agreements can be made at any time during the relationship, coming into effect if you split up, or if one partner becomes ill or dies. Cohabitation Agreements are particularly useful where one partner contributes more up-front, for example, towards the cost of a joint home.
We understand that splitting up can be a difficult and emotional process, and unfortunately, it can, at times, also become acrimonious. Should you require any further advice on your rights or how to approach a financial settlement following a breakup, please get in touch with our