Should you consider a cohabitee contract?
Broadly, yes, if you are unmarried and cohabiting. Spouses, or those in a civil partnership, are treated very differently in law to cohabitees who haven’t formalised their relationship. It is a myth that common law marriage exists in the UK; it doesn’t.
A cohabitation agreement can help to set out what cohabitees would like to happen if their relationship were to break down in the future. Cohabitation agreements can be legally binding and enforceable provided they are properly drafted, signed as a deed and both parties seek independent legal advice. As well as providing a useful guideline as to a couple’s intentions and potentially making the practicalities of parting company slightly less stressful.
What rights do spouses have?
Spouses, and civil partners, have automatic financial claims against the other in the event of divorce. These can relate to property/savings, income and pensions, and the Courts have a range of powers to deal with these claims.
Spouses also have automatic rights if their spouse dies. However, these automatic rights are not necessarily at the level you might expect, so making a Will is strongly recommended.
You can find out more about Making a Will here.
What rights do cohabitees have?
Unmarried couples who live together do not have the same rights as spouses. Cohabitees currently have no automatic financial claims upon their partners in the event of the relationship breaking down - no claims on income, pensions, or savings, even if they have lived together for several years and raised children. Claims can be made for child support using the Child Maintenance Service for children under the age of 16 years or under 20 if they are in approved education or training.
Claims can arise in respect of property, even if it is only owned in one name. In those circumstances, the non-owner might be able to make a claim if they have invested money in it - for instance through mortgage repayments or home improvements - or on the basis that the owner had previously assured them of a share or interest in it.
Should this dispute go to Court, the Judge would look at all the evidence, to try and determine what their intentions had been, and whether there had been any financial contributions which ought to be recognised. Such cases can be complicated and expensive.
Unmarried cohabitees also have no automatic rights if their partner dies, so making a Will is potentially even more important for cohabitees than for married couples, particularly if there is a property involved.
What role can a Cohabitation Agreement play?
A Cohabitation Agreement, like a Prenuptial Agreement, records financial wishes and intentions, and can look to 'ring-fence' solely owned assets, as well as provide a framework to sort out everyday matters such as the payment of bills.
It is not possible to guarantee that the Cohabitation Agreement will be completely binding and upheld in its entirety by a Court. However, they are becoming more widespread, and should be given serious weight if the usual requirements for both partners to take separate legal advice have been met.
Whilst proposing a Cohabitation Agreement may seem unromantic, it is vital that unmarried couples try to protect themselves, and this should give partners - and their families - some peace of mind.
Moving in together - property issues for cohabitees
If you live in, or intend to move into, a property that is already held in your partner’s sole name, or a property that is held in your joint names, you should seek advice on your rights in relation to the property in the event of separation. How the property is owned, or contributed to financially, will have a strong bearing on how the property should be divided and whether you automatically have a right to a share of it. Sometimes a court might go beyond the legal title and decide ownership rights based on what you agree or contribute during the time that you live together, rather than approving a fifty-fifty split.
There have been cases where sole ownership of a property has been successfully challenged where it was established that both parties contributed to the purchase of a property even if this wasn’t registered legally. This could apply whether the payments were made before a couple lived together or while they were doing so. There have been other cases where the court has held someone to a promise they made in terms of how the property would be treated, even though that person subsequently changed their mind.
The strength of your case will of course depend on what evidence you have. This not only applies to circumstances between cohabitees in a relationship together but also to other family members who have reached an agreement in relation to a property purchased together even though one of them lives in it and the other does not.
Joint tenants or tenants in common?
There have been cases where joint ownership of a property has been challenged when one person moves in with a partner who already owns a property and then the property is transferred into joint names on receipt of a contribution. Your position will depend on whether you own your property as ‘beneficial joint tenants’ or ‘tenants in common’.
If you own the property as joint tenants, you own half each and nothing that either of you has done during the relationship affects this. If you own property as tenants in common, then the size of your share should have been specified.
What happens in relation to children when cohabiting couples separate?
If you have a Cohabitation Agreement stipulating how your mutual children would spend their time, then this will be taken into account. Of course, if there have been any unexpected issues with violence or other inappropriate behaviour within the home or relationship then these factors would be taken into account. As with marriage breakdown, decisions would be made based on what is in the children’s best interests.
To discuss your own circumstances in relation to a possible Cohabitation Agreement, contact Jackie Jessiman, a family law specialist on 01353 886996 or by email on jackiejessiman@fraserdawbarns.com
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This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances. Fraser Dawbarns LLP is always happy to provide such advice.