Family law expert Rachel Spencer Robb has advised unmarried couples in England and Wales buying a property with unequal financial contributions to take essential legal protections.
The guidance follows a query submitted by a concerned parent to financial advice website This is Money regarding their son, who is purchasing a home with his partner while contributing the largest portion of the purchase price. The partner has two children from a previous relationship, aged ten and nine, prompting questions about how to safeguard the son's financial share if the relationship breaks down, if he dies first, or if the property is sold.
Tanya Jefferies, of This is Money, noted that many unmarried couples buy property together without realizing the need to protect their individual financial investments. She emphasized that proper legal planning is especially important when young children are involved who require financially secure living arrangements.
Addressing the situation, Spencer Robb, a partner in family law at law firm Clarion, explained that unmarried couples who buy property with unequal contributions face distinct legal risks as property prices rise. She warned that many people are surprised to learn that unmarried partners do not benefit from the same legal protections as married couples or civil partners.
Spencer Robb stressed that "there is no such thing as a 'common law marriage' in England and Wales, regardless of how long a couple have been together." Although the UK Government recently consulted on potential reforms to strengthen rights for cohabiting couples in the future, those changes are not yet law.
For now, cohabiting couples remain largely reliant on property, trust and inheritance law to protect their financial position, Spencer Robb explained. If a relationship breaks down, property ownership disputes are generally determined by property and trust law rather than the broader discretionary powers available to family courts during divorce proceedings.
Declaration of trust protections
To secure a larger financial contribution, Spencer Robb recommended executing a Declaration of Trust when the property is purchased. A Declaration of Trust is a legally binding document that formally records each party's financial input and outlines how sale proceeds must be divided in the future.
Spencer Robb noted that the document can specify whether each party recovers their original deposit before capital growth is shared, or establish ownership in unequal shares reflecting respective investments. "Should the relationship break down, a Declaration of Trust can provide valuable certainty and significantly reduce the scope for disagreement," she said.
Without such an agreement, disputes frequently arise over what was intended at the time of purchase. Spencer Robb cautioned that while courts can determine beneficial interests, property litigation can be lengthy, expensive and stressful, making legal prevention far preferable to cure.
Property ownership and inheritance structures
The structure of property ownership is equally critical when contributions are unequal. Spencer Robb advised couples to carefully consider owning the property as tenants in common rather than joint tenants. Joint tenancy means both owners hold equal rights to the entire property, whereas tenants in common allow each individual to own a defined share.
Owning as tenants in common enables each person to decide through their will who will inherit their specific share upon death. Spencer Robb highlighted that this structure is preferable where financial contributions are unequal or where children from previous relationships must be considered in estate planning.
Unmarried couples do not currently benefit from the same inheritance protections as spouses. If either partner dies without a valid will, the surviving partner will not automatically inherit under statutory intestacy rules. Given that one partner has two children aged ten and nine from a previous relationship, Spencer Robb emphasized that careful estate planning and properly drafted wills are vital to ensure clarity regarding who inherits the property.
Cohabitation agreements and ongoing contributions
Beyond property deeds, Spencer Robb suggested that couples consider entering into a Cohabitation Agreement. This contract covers broader financial arrangements, including household expenses, mortgage payments, maintenance costs and other financial commitments during the relationship, as well as terms for separation.
"Whilst discussing these issues at the start of a relationship can feel uncomfortable, it is often far easier and considerably less expensive than dealing with disagreements after a separation has occurred," Spencer Robb said.
Financial contributions do not end after completion. Spencer Robb warned that if one partner subsequently contributes more towards mortgage repayments, renovations or major improvements, those contributions can potentially affect their respective beneficial interests. Couples should maintain clear records and review their agreements if circumstances change.
If the relationship progresses to an engagement, Spencer Robb noted that a prenuptial agreement can also be used to protect initial house purchase contributions. Readers with legal dilemmas regarding inheritance or property issues can contact This is Money at [email protected].
