Tips for Co-habitants

Marriage is on the decline and co-habiting couples are becoming the most common family unit.  A recent survey by the Association of Family Lawyers, Resolution, found:-

  • One in five families in the UK are co-habiting couples, and around 50% of those have children;
  • Two out of three co-habitants were not aware that they had fewer rights than married couples; and
  • Most of the lawyers surveyed reported having been unable to assist a co-habiting partner due to a lack of legal protection.

The existence of a “common law” spouse is a myth.  The fact is that, even if a couple has been living together for many years, neither of them acquires automatic rights to a share in the other’s assets in the event that the relationship breaks down, or if one of them dies.  This can lead to severe financial hardship.

Claims in relation to a partner’s property can be hard to prove and can take many forms.  Claims are not contained in a single statute or remedy.  In a divorce, claims are made under the Matrimonial Causes Act 1973, which enables a divorcing spouse to claim maintenance, lump sum or sums, a share in property and shares in pensions.  The Court has a wide discretion and can adjust shares in assets, even those owned by one party, in accordance with what the Judge considers to be fair and reasonable.

A co-habitant has no rights to maintenance or a share in pensions.  Claims to property owned by the other party is limited to establishing trusts or that the party making the claim has acted to their detriment in reliance on a promise (i.e. proprietary estoppel).  Lump sums may be limited to reimbursement of money spent on property (but not necessarily on ordinary household expenditure or housing costs such as mortgage payments).

If one of the partners dies, without making a Will, the survivor has no automatic right to a share in their estate, or the right to remain in a shared home.  A spouse would be entitled to at least the first £250,000 of any assets and a half share in the remainder, along with any children.  If there are no children, the spouse gets everything.

A surviving co-habiting partner will only get a share of any property they jointly own with the deceased.  This means that they could be left homeless, unless the deceased left a provision in the Will.  Claims can be brought under the Inheritance (provision for Family and Dependents) Act 1975, but this does not mean that they will be entitled to more than “reasonable financial provision”.  This might simply men a right to live in a property for a specified period.  Even if they have spent money on the property, if there is no clear evidence of this, and an intention that they acquire a share, they will not necessarily be entitled to anything back.

The deceased might have unofficially “adopted” their partner’s children.  However, those children will not be entitled to a share in the estate unless they can prove a dependency and make a claim under the 1975 Act.

If the deceased has not been divorced, their surviving spouse may be entitled to a share where their long-standing live-in partner may not.  It is possible that if the deceased has made a Will but not changed it to reflect their current circumstances, the existing Will, will stand.  Claims against the estate can be expensive and the cost of bringing or defending claims can use up a sizeable share of the estate.

In any event, if one partner is not divorced, or their ex-spouse’s financial claims have not been dismissed, such claims can remain open unless the ex-spouse has remarried, and even then this is not a guarantee. Claims can be brought at any time and the court will take into account the parties’ circumstances at the time of the application, not at the time of the divorce or separation.

There are a number of ways that co-habiting couples can protect themselves and each other:-

  1. You should ensure that you have a Will and it is kept up to date. Children from previous relationships as well as any children from the current relationship should be accounted for.  The needs of step-children should also be considered.  If any existing partner is to be specifically excluded from the Will then a Letter of Wishes should be included to assist the Court in the event of a claim in explaining why matters were set up as they were.
  1. Contributions to property should be properly recorded in a Declaration of Trust. This can be as simple or as detailed as you want.  If there is no intention of giving a partner a share in a property then finances should be kept separate and contributions, whether in cash or in kind, should be properly recorded and accounted for.  It is advisable to get a Co-Habitation Agreement drawn up which deals with and explains any payments which the couple make between them.  If you are intending to marry, then you could consider entering into a Pre-Nuptial Agreement.
  1. If you or your partner are still married to someone else, you/they should consider applying for a divorce and an order dismissing financial claims as soon as possible.  An Order should be sought form the Court dismissing any claims which your ex-spouse can bring under the Matrimonial Causes Act 1973.  If not, when a claim is brought, the Court will take into account the parties’ financial positions at the time the Order is made, not just when the parties were separated or divorced.  This means a change in circumstances, even the fact that someone has a new partner, can affect the type of financial provision a Court makes for an ex-spouse.
  1. Separated married couples who are not able to divorce straight away should consider sorting out their financial affairs as soon as possible and entering into a Separation Agreement. This will record the financial position at the time the agreement is made and make it clear that it is in full and final settlement of all claims.  Provided that the divorce is progressed as soon as possible and there has been no significant change in the parties’ circumstances which might undermine the fairness of the original agreement, the terms should stand and be approved by the Court when the divorce is finalised.
  1. Step-parents are not automatically liable to pay maintenance for their partner’s children. However, it is possible to make a claim for maintenance against a step-parent under Schedule 1 of the Children Act 1989.  Even if unmarried parents have not lived together, it is possible to claim maintenance and lump sums for specified expenditure under Schedule 1 of the Children Act 1989 on behalf of a dependent child.

If you require any further information or if any of the advice above affects you, you should not hesitate to contact our family law specialist, Andrew Hill, or our private client department in relation to Wills, on 01539 723757.

Please note it is important when considering a Co-Habitation Agreement, Pre-Nuptial Agreement, or Separation Agreement that both you and your former partner take legal advice and that both of you have fully disclosed your respective financial and other circumstances and that there is no suggestion that pressure has been put on the financially weaker party.

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