Cohabitation: trouble in waiting?
For many couples, cohabitation is their living arrangement of choice, free from the associated conventions and definitions of marriage. However, the law is still heavily weighted in favour of married couples or civil partners in terms of legal rights if the couple split up, including major rights such as inheritance and assets such as property. LGFL Director Anne Leiper explores the implications for couples who choose to live together.
Cohabiting families in the UK
Cohabitation has grown in popularity from just over 1.5million in 1996 to 3.3million families in 2017. This may be due in part to the enduring myth of the “common law spouse”, with people believing that rights accumulate by living as a couple and having children together.
No such thing as a common law spouse
Sadly, there is no such status as a “common law spouse”. You are either married / in a civil partnership, or you’re not. In law, cohabitation is a lifestyle, not a status. When a married couple divorce, or a civil partnership is dissolved, there are legal rights in place to determine the division of financial assets, property, settlements, and pension rights. This does not apply to cohabiting couples.
Cohabitation splits - what you are entitled to
When a cohabiting couple split, there is no automatic entitlement to anything, such as assets, a share of the house, or even a reasonable financial settlement. Unless there is a clear paper trail of who owns what, (and crucially who contributed what and when during the relationship), any settlement will ultimately rest on the decision of a judge. Even then, a court cannot order a lump sum to be paid, or property ownership to be split. This leaves stay at home parents who have may not have contributed as much financially particularly vulnerable.
Safeguarding your assets
At LGFL, we are all too aware of the difficulties cohabiting parents face when they split. That’s why we encourage cohabitees who might want to split to come and consult with us first, especially if you own property and other assets together, and have children to look after at home. We can talk through your particular situation, and advise you of the options available. This might include issuing civil proceedings to determine your potential rights or obligations to provide a home for a minor child under the Children Act.
Orders under the Children Act
Schedule 1 of the Children Act enables an unmarried parent to apply for a court order to receive payments towards the care of the children, and to remain in the family home. However, courts are usually very careful to ensure any financial payments are for the children, with sometimes precious little left for the parent themselves.
What happens if your partner dies
Matters are equally as difficult if one cohabiting partner dies. Unless there is specific provision in their will for you as the surviving partner, you are not automatically entitled to inherit. Indeed, if your partner did not make a will and has children, they will inherit rather than you. You would have to make a claim against your cohabitee’s estate under the Inheritance (Provision for Family and Dependants) Act 1975, and you must have lived together for at least two years.
Reform is on the way
The good news is that there is a strong appetite for reform, but the bad news is that progress is painfully slow. Despite several bills being presented in parliament, the latest one, The Cohabitation Rights Bill, is still waiting for a second reading in the House of Lords. This puts England and Wales way behind Scotland and other countries, who already have cohabitation schemes in place. These allow courts to make orders for payments, transfer of property and the sharing of pensions (another thorny issue for any unmarried partner).
A solution for now: cohabitation agreements
At LGFL, we’ve drawn up dozens of detailed Cohabitation Agreements for couples who haven’t the slightest intention of splitting up, but want the reassurance of an agreement in writing if by any chance they do split.
Cohabitation agreements are specifically designed to protect your assets if you decide to move in together. A cohabitation agreement lays down how your property and other assets would be dealt with on relationship breakdown, and to make provision for any minor children you may have together. This formal agreement can help avoid costly and acrimonious litigation further down the line.
It’s also important to keep any cohabitation agreement up to date as your circumstances change, so that it accurately reflects your current financial status rather than when you first moved in together.
If you would like to set up a Cohabitation Agreement, or wish to update an existing one, contact us for an appointment. We can meet at our discreet countryside main office in Swallowfield near Reading, or in our new exclusive-use office at Spaces in Reading city centre.
The recent changes to extend civil partnerships to heterosexual couples may be a way forward for cohabiting couples who would like a formal arrangement but just don’t want to be “married”. However, it doesn’t address the issue that many cohabiting couples don’t want any form of official arrangement, and hence will still be left in a vulnerable position. At LGFL, we firmly believe that until major reform to the law is made, a Cohabitation Agreement is the best way to protect you, your assets and your family should that unexpected split actually happen.
Listening with empathy