The push for cohabitation reform continues - but how can you protect yourself today?
In 2022, 22.7% of couples living together were not married or registered in a civil partnership . A nationwide poll has shown that there is a significant misunderstanding of the rights, or lack thereof, afforded to cohabitees when they separate. Nearly half (47%) of cohabitees are unaware that they lack the rights otherwise afforded to individuals who are married or in a civil partnership .
We last wrote in October 2023 about the need for reform of the law surrounding cohabitating couples and recent research carried out by Resolution (a group of family lawyers committed to constructive outcomes for separating individuals) supports this view. Over a thousand family lawyers and legal professionals shared their views and experiences with the majority identifying cohabitation law as the next priority for reform. 75% of those surveyed said that they would support changes that would provide basic rights to cohabiting couples .
What might the future look like for cohabitees?
Resolution has drawn up a ‘Vision for Family Justice’ which launched in Parliament on 27 November, calling for changes to the law that fits the modern needs of cohabiting families . The ‘vision’ focuses heavily on the creation of legislation specifically designed to create rights and obligations for cohabitants, which currently do not exist.
Specific suggestions of reform include introducing:
- An opt-out right for eligible cohabitees to apply for financial remedy orders if they separate.
- The extension to cohabitees of the same orders married couples and civil partners are entitled to on separation, albeit on a more limited basis.
- The ability for cohabitees to apply for maintenance for a limited period to adjust to the loss of financial support until they are self-sufficient.
- Provision for payments for childcare costs so that parents who are primary carers of children of the family can work.
- Extending the range of powers available to the court and the criteria considered under Schedule 1 of the Children Act 1989 (which addresses financial provision for the children of unmarried couples) so that the needs of any children of the family are better met.
- Upon death, a right for cohabitees to inherit under intestacy and to be treated in the same way as married couples for tax purposes.
What can cohabitees do now to protect themselves?
The first two options to protect cohabitees’ rights in the event of a separation are ‘simple’:
- Get married or
- Enter into a civil partnership
However, not everyone wants to walk down the aisle. In fact, 50% of cohabitees have no plans to get married and 34% do not believe in marriage at all . So, if marriage or a civil partnership are not options for you, what steps can you take now to protect your rights as a cohabitee?
- Enter into a cohabitation agreement
You and your partner can enter into a cohabitation agreement which can set out your intended arrangements for your finances (including any property) if you separate. You can also include your intentions in the event you become unwell or die. Cohabitation agreements are contracts which can be enforced in the civil court if they are drafted and signed as a deed. A family solicitor can help advise you on what terms would be appropriate and in your best interests in your individual circumstances. As part of the drafting, you could also include any proposed arrangements for any children of the family, although this will not be binding because of the principle that the welfare of the former is paramount and the court must retain an overall discretion in this regard.
- Make a Declaration of Trust
Declarations of Trust are legal documents which record the terms upon which an asset, usually property, is held. Some examples of circumstances where a Declaration of Trust could be suitable are:
- Two cohabitees purchase a property as beneficial joint tenants, meaning you both own the whole of the property together, regardless of how much money each has put into the purchase, its renovation or upkeep. If one of you passes away before the other, the whole property would ordinarily pass to the other owner automatically.
- You may benefit from a Declaration of Trust if you have paid more of the deposit and want to receive this money back if you separate and the property is sold. If you have a Declaration of Trust and hold the property in specific shares, you will be regarded as tenants-in-common and can specify exactly how much of the property you are entitled to. If one of you dies, his/her share will pass through that person’s estate and does not automatically pass to the other owner.
- Declarations of Trust can also give you a beneficial interest in property that is solely owned by one person. This might be the case where the property is legally in the name of one of you but you both contributed to the purchase price.
- Draft a Will
When a person dies without a will, their estate must be distributed according to the ‘intestacy rules’. Cohabitees have no right to inherit under these rules. If you do not have children, your share of the property may pass to your parents or to more distant family members. If a cohabitee wants to make a claim for financial provision, they will have to make a lengthy and expensive court application. This would be a distressing and difficult process for you or your partner after the death of the other and there is no guarantee that you would be successful. If your intention is for your cohabiting partner to receive all or some of your estate on death, then you should draft a will which sets this out clearly and unambiguously. A solicitor can help draft your will so that it is legally binding, reflects your wishes and is tax efficient.
If you are a separating cohabitee but have not taken any steps during your relationship to protect your rights, you should not lose hope.
The first thing to consider is whether you can come to an agreement now with your partner on what your finances will look like in the event that you separate. You should each receive separate advice to enable you to discuss this together, attend mediation (with a neutral third-party to help steer the discussions) or negotiate through solicitors. The latter can help draft your agreement into a separation agreement which is legally binding as a contract.
In the absence of an agreement, you may still have a statutory claim for property ownership or for financial assistance with any children of the family. These claims are highly fact-specific so advice should be taken as soon as practicable as to their chances of success so that you can make an informed decision.