For better or worse, marriage is in the decline all over the world. In Ireland, cohabiting couples form a significant portion of the population, but their legal standing has often been a grey area. Understanding cohabiting rights is crucial, especially when it comes to matters like tax, pensions, property, inheritance, and children.
Cohabiting Definition
A cohabiting couple is typically defined as two individuals who live together in an intimate and committed relationship but are not married or in a civil partnership. A common law husband/wife is just a phrase, not a legal definition. So while cohabitation offers flexibility and freedom, it also brings unique challenges, particularly in legal and financial matters.
Taxation
One of the first areas where cohabiting rights come into play is taxation. Unlike married couples or those in civil partnerships, cohabiting couples do not enjoy the same tax benefits. In Ireland, the tax system treats cohabiting couples as separate entities. This means they miss out on the advantageous tax allowances and reliefs available to their legally recognised counterparts.
Pensions
Similarly, cohabiting couples face challenges when it comes to pension rights. Many pension schemes provide benefits to the surviving spouse in the event of death, but without the legal recognition of marriage or civil partnership, cohabiting partners may find themselves excluded from such benefits.
Property
Unlike married couples, cohabiting partners are not automatically entitled to a share of each other’s property. And if you do not own a share of the property, your partner can ask you to move out, and can sell, and you have no legal right to object. This lack of legal protection can lead to disputes – especially where a non-owning partner has contributed towards the deposit or the mortgage repayments.
Inheritance
When it comes to the issue of inheritance, the absence of legal recognition means that without a valid will, the surviving partner may not automatically inherit the deceased partner’s estate. Because you’re not married, you won’t be considered his/her next of kin. This can lead to unintended consequences, with family members potentially contesting the inheritance and a bereft partner being forced from their home. You can apply for provision from your deceased partner’s estate, but you must prove that you were cohabiting for five years (or two years if you have children), and that you were financially dependent on the deceased. On top of that, where there is a will instruction, the surviving partner’s inheritance (of all assets) is subject to inheritance tax – a tax that does not apply to married couples.
Children
When children are part of a cohabiting relationship, matters become even more intricate. While legal provisions exist for custody and maintenance, the absence of marriage or civil partnership status may complicate matters. It is crucial for cohabiting parents to establish legal agreements that protect the rights of both partners and the wellbeing of their children. Unmarried fathers do not automatically become legal guardians for their children – even if their name is on the birth certificate. Guardianship can be gained after the child is born, so long as the father lives with the mother and child for at least 12 consecutive months, including the three months following the birth. If the father has yet to obtain guardianship, the mother may be the sole guardian. Aside from unusual circumstances, this may influence the court to give custody rights to the mother.
Solutions?
In conclusion, cohabiting couples in Ireland face various challenges in terms of legal recognition and rights. To mitigate these disadvantages, it is essential for individuals in cohabiting relationships to take proactive steps. Possible remedies are:
- Write a comprehensive will. A well crafted will can ensure that the surviving partner is legally entitled to inherit the deceased partner’s assets, providing financial security and avoiding potential disputes. It can also appoint guardians for children and address other important matters.
- Before you buy a property, consider buying as tenants in common, where each of your percentage share is legally recognised. But remember that if your partner dies before you, you will not automatically receive their share of the property unless they have written a will naming you as the beneficiary.
- Make use of the dwelling house exemption (to avoid inheritance tax on your home) if at all possible.
- A cohabitation agreement sets out what should happen to your money, finances and children, in the event that your relationship breaks down. You both need to get independent legal advice for the agreement to be valid. The key benefit is that you have prepared for future events while your relationship is still amicable. This ensures that the plans you make are fair and reasonable to each person.
- Structure life insurance policies to ensure that proceeds go to the surviving partner without any liability to tax. Arrange two single life mortgage protection policies where appropriate.
In essence, while Irish law continues to evolve to address the rights of cohabiting couples, understanding the legal landscape and taking proactive measures can offset many of the complexities of Irish cohabiting rights.
You may need to seek professional legal advice on your particular circumstances but for further information first have a look at Citizens Information.
If you like this article, try this one: Inheritance Tax in Ireland