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How Can Unmarried Couples Protect Themselves?

26th June 2014 Frederick Tatham, Farrer & Co

Thrown on the 'scrapheap' can raise significant challenges for those involved but what steps can be taken when their is no marriage on the cards?

The President of the Family Division, Sir James Munby, hit the headlines recently when he highlighted the plight of unmarried women  on the breakdown of long, cohabiting relationships.  He described how such a woman is "thrown on the scrapheap at a time when she has lost her earning potential because of her age and because of the time she has been out of employment where there is no way she can rebuild her career, in circumstances where, had the parties been married, she would have had a very significant claim to very significant financial relief".

The President was talking about those relationships which last for many years without the couple ever tying the knot – perhaps because of a wealthy man's refusal to marry.  The couple might have children and the woman might have made exactly the same sort of career sacrifices as many women do when they marry. 

On the breakdown of a cohabiting relationship, an unmarried woman is entitled as of right only to what is in her own name.  If the family home is in her partner's name, there is little she can do aside from trying to establish that he holds a share of the property on trust for her (not an easy task). 

She may not have worked outside the home for many years, yet she is not entitled to any financial support from her ex-partner save for maintenance for the children. She may not even receive this if her children have grown up and left home. 

In these circumstances, an unmarried woman is in a very vulnerable position indeed. 

The "common law marriage" – a myth

The dangers of this injustice are only intensified by widespread unawareness of the legal position.

A poll by the charity OnePlusOne last year found that 47% of UK citizens aged between 18 and 34 mistakenly assumed that cohabiting couples have the same legal rights as their married counterparts.  58% of people across all age groups believed that there was such a thing as "common law" marriage when in fact there is no such thing.

According to the Office of National Statistics, there were 5.9 million people cohabiting in the UK in 2012, double the 1996 figure.  That makes cohabitation the fastest growing family type in the UK.

Protection from the scrapheap

Undoubtedly, the best protection from the scrapheap is marriage. But for those who cannot persuade their partners to marry them, what can be done? 

Unmarried couples can enter into a cohabitation agreement, often referred to as a 'no-nup'.  These record the couples' rights and responsibilities in relation to property and financial arrangements during their cohabitation and, of course, if and when they decide to head their separate ways.

A cohabitation agreement can deal with the following:

  • The home - It can record each party's legal and beneficial interest in the property, and can specify what will happen to the property if cohabitation comes to an end. 

  • Other property - An agreement can cover personal property such as cars, art and furniture.   While a couple are living together they may want to share the use of property, but still ensure items will remain in the owner's name when cohabitation ends.

  • Financial arrangements - An individual has no claim against a former partner for maintenance or a share in their assets.  Nevertheless, a party may want to provide for their former partner, especially if they have children together.  An agreement can set out arrangements for maintenance to be paid to a former cohabitee to allow that party to readjust post-cohabitation.

  • Children - An agreement can specify what living and financial arrangements will be made for the parties children if cohabitation comes to an end.

Clearly, a cohabitation agreement can mean avoiding the cost and uncertainty of litigation, and save as a lot of stress on the breakdown of a relationship.

It also forces couples to discuss the legal and financial consequences of their relationship which, in light of the misconceptions that exist in this area, is a definite advantage. 

However, whether or not it provides protection from the scrapheap depends entirely on what it says.  Cohabitation agreements can say whatever the parties wish – there is no 'fairness' test.  The agreement may in fact provide protection for the financially stronger party rather than the weaker, by making it clear that the weaker financial party has no rights to property owned by the stronger party. 

Reform?

The law is in urgent need for reform and the President's calls are nothing new.  The Law Commission made recommendations in 2007.  So far, Governments have failed to act and it seems unlikely that the law in this area will change in the near future.

In the meantime, education is key, so that people in a vulnerable position are aware of the risks and go into their cohabiting relationship with their eyes open. 

That way they may avoid a scrap – and the scrapheap.

This publication is a general summary of the law.  It should not replace legal advice tailored to your specific circumstances

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