Belfast Telegraph

Inheritance of property is complex for cohabitors

By Michelle McGagh

A cohabitation or "living together" agreement typically covers more day-to-day matters such as the way the household is run or other circumstances specific to the relationship. Stephen Kirwan, managing director of law firm Nowell Mellor, said: "A declaration of trust or cohabitation agreement establishes what your property is and it is binding on execution: it cannot be changed without the consent of both parties.

"A declaration of trust is usually in relation to particular property and a cohabitation agreement can include extra details about paying off debts, joint accounts and financial arrangements around children, such as who pays for school fees."

A home is usually the largest asset a person or couple owns, and for married couples or those in a civil partnership, each person has equal rights to the property no matter who bought it, who pays the mortgage or who maintains it.

For cohabiting couples it is not that straightforward.

If the property is owned by one of the couple, it has to be decided whether their partner has an interest in the property – because they contribute to the mortgage, or because they pay for building work, for example.

However, if these contributions are not set out in a declaration-of-trust agreement then the partner who does not own the property could find they have no rights to a share of the home if the relationship breaks down.

Similarly, cohabitors buying a home together should make sure they use the right legal structure so the property passes automatically to the surviving partner in the event of death.

Property-purchase contracts can be drawn up as either "joint tenancy" or "tenants in common". Under joint tenancy, both partners own the whole property, meaning that if one person dies, the survivor carries on owning it.

Tenants in common means each partner owns a specific share. Under this arrangement, the share a person has in a property can be left to whoever they choose.

Mr Kirwan warns that cohabitors purchasing a property under tenants-in-common rules should also draw up a will to ensure their share of the property is passed on to the person they wish.

Belfast Telegraph

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