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A recent poll found that more than a quarter of British adults believe that cohabiting with their partner for a period in excess of two years gives them legal rights akin to marriage. This is not the case.
Cohabiting couples in England and Wales have no legal rights and either party can walk away from the relationship without taking any responsibility for their former partner. On the breakdown of a cohabiting relationship, there is little recourse available financially to either party, save for a non-resident parent’s liability for child maintenance if there are children of the relationship. In addition, there is statutory provision for financial assistance for children of a relationship under the Children Act 1989; however this is limited in application and only provides financial assistance for the benefit of the children whilst they continue to be in their minority. The Act provides no financial security for former partners.
With so much of the population believing the legal status of cohabiting couples to be different, Resolution, the association of family practitioners, launched a Cohabitation Awareness campaign last year to raise awareness of the lack of protection for cohabiting couples. As the family unit evolves, they hope to prompt a change to the law in this area to bring the law in line with the modern-day family.
However, in the meantime it is important to ensure that, if you are one of those 3.3 million cohabiting couples, you are protected. Accordingly we take a look at the current legal status of cohabiting couples and how you can protect yourself should your relationship breakdown in the future.
By way of example, meet Sophie and Mark who have been cohabiting for over ten years since Sophie moved into Mark’s property shortly into their relationship. The parties have three young children together. Mark has always been the breadwinner and although Sophie worked before having the children, since their first child was born she has stayed at home to look after the family while Mark continued to work full time. Although Sophie and Mark are committed to one another, they have never felt any need to marry.
Should her relationship with Mark break down in the future, Sophie would be left in a vulnerable position financially. She occupies a property held in Mark’s sole name with their three children, but she does not have an entitlement to any of the equity in the property if they were to separate; and how would she get by month-to-month with little or no income of her own and three children to provide for? Of course, were she married to Mark, Sophie would be able to seek a legal division of the matrimonial assets under the Matrimonial Causes Act, but no such relief is available to cohabiting couples.
Following a separation, and assuming that Sophie continued to be the primary carer of their children, Mark would be liable for child maintenance payments as governed by the Child Maintenance Service, but Sophie would have no right to claim income from Mark in her own right. Neither does Sophie have any real legal protection regarding a property not held in their joint names.
This example highlights some of the issues that arise amongst the millions of cohabiting but unmarried couples in the UK. What steps, therefore, can unmarried couples take at the outset of their cohabitation, or at any point thereafter, to protect themselves in the event of a breakdown of their relationship?
1. Cohabitation Agreements
Cohabiting couples can protect themselves in the event that their relationship breaks down in the future by entering into a cohabitation agreement. This is a formal written agreement that the parties should enter into at the outset of their cohabitation setting out their intentions for the period over which they live together. Such an agreement can discuss any jointly owned or occupied property, joint finances, and payment of any outgoings on the property. The agreements can also set out how the parties might support their children financially should they decide not to live together in the future and set out a proposed shared care arrangement should they separate.
The terms of a cohabitation agreement are legally binding provided that the agreement is entered into correctly, including an obligation on both parties to obtain their own independent legal advice. Entering into such an agreement can save on costly litigation later down the line and leaves both parties with some certainty as to where they would stand financially should the relationship breakdown.
2. Entering into a Declaration of Trust for jointly owned property
When acquiring property jointly with a partner, you should enter into a declaration of trust to document how the property is held and what your respective beneficial interests in the property are. The deed can set out your respective beneficial interests in accordance with each of your contributions to the capital of the purchase price, the purchase costs (including SDLT) and towards the repayment of any mortgage secured against the property. Of course, these interests can be reconsidered and adjusted as circumstances change or any additional capital is invested in the property. Again, such documents are legally binding unless challenged on the basis of fraud or mistake, and can save a costly legal battle on later separation.
3. Additional Considerations
It is not just provision should the relationship break down that needs to be borne in mind, but in addition, cohabiting couples do not enjoy the same benefits on death as a spouse. A cohabiting couple has no automatic right to make a claim against the other’s estate on death. If you want to ensure that your partner will be adequately provided for in the event of your death, you should both set out your wishes in a Will and keep these updated to ensure your assets are directed as you would wish.
It might also be prudent to consider taking out a life insurance policy to provide an income for you partner should the worst happen.
If you would like any more information on the above or assistance in putting in place any of the measures discussed, please get in touch with a member of our family team who would be happy to advise you further.