As many as 40% of all “permanent” couples now cohabit and one in four children are born outside marriage.
Many cohabitees mistakenly believe that once they have cohabited for a certain period they acquire some form of “common law” status akin to marriage. Others believe they have few or no legal rights and are confused about their legal standing. Although relationships outside marriage do not attract the same legal status afforded to married couples, the law does now increasingly recognise some cohabitee rights.
The following guide is intended to provide a brief summary of the law in this area.
Buying a property together
When you buy a property together the Land Registry can record your joint ownership in different ways:
- Joint Tenants - this means that when one partner dies, their share will automatically pass to the surviving partner. The deceased’s partner’s share of the property cannot be left by their will.
- Tenants in Common in Equal Shares - this means that you will each own a defined 50% of the property regardless of the financial contributions that either of you make. With a tenancy in common, you can leave your 50% interest in the property by your will and it could therefore pass to someone other than your partner, depending upon your wishes.
- Tenants in Common in Unequal Shares - this means that you will each own a defined share but it will be necessary to specify the share held by each partner. Often this will represent the differing financial contributions made at the time of purchase. It is sensible to set out in the Transfer Deed or in a separate Declaration of Trust, the precise share that each partner owns.
Although you will need to jointly instruct one firm of solicitors to deal with the purchase of the property, you are both best advised to take independent legal advice about the manner in which you are to own your new property. This is particularly important if one of you is making a larger financial contribution towards the purchase price than the other.
Financial issues on separation
Introduction
Where a married couple divorce the court is empowered by virtue of a statutory framework to divide the couple’s assets notwithstanding how they are held. The court has no such power to share assets between separating cohabitees. The court can investigate and declare the extent of a person’s rights. Most declarations are in respect of a property which a couple have occupied during the course of their relationship, but it could also be in respect of other assets, for example, a business.
Land and Property
Where a house or any land is jointly owned by two or more people a “Trust for Sale” is automatically created. Broadly this means that either co-owner can insist that the property is sold and the proceeds of sale divided. This right to insist upon a sale can be enforced through the court. The court has discretion in some situations to defer any sale if it believes a sale would defeat the purpose for which the property was bought.
How do I know if land is jointly owned?
A search at HM Land Registry will confirm whether ownership of land or property is “registered” in joint names. It will also show if the property is owned as joint tenants or tenants in common (see above). Where land is unregistered, the Deeds will show whether it is jointly owned. Unregistered land is increasingly uncommon.
Where the legal ownership of a property is registered in only one partner’s name, this does not necessarily mean that the other partner has no claim to a share of it. The non-owning partner may be able to seek a Declaration through the court that he/she has an interest in a property as a result of:
- Having made a direct financial contribution towards the property, either at the time of purchase or during the period of ownership
- In the absence of direct financial contribution, if it was agreed that the non-owning partner should have an interest in the property and, in reliance upon that expectation, the non-owning partner has acted to his/her detriment
Other jointly owned property
The courts have the power to make declarations in relation to other jointly owned property, for example, insurance, antiques, jewellery etc.
The Married Womens Property Act 1881
This specific legislation is helpful for engaged couples or for those who have been engaged up to three years prior to the issue of an application to the court under the act. The court can declare what each person’s rights are in relation to any property including land, shares and cash.
Financial issues on death
Pensions
Many occupational pension schemes make provision for the payment of an adult dependant’s pension in the event of death after retirement if there is no legal widow/er at the date of death. Where death occurs during employment a lump sum may be payable and/or contributions to the pension refunded. This may be provided to a cohabitee by virtue of a “nomination” under the scheme to be made to the Trustees of the scheme. It is important that any nomination made under a pension scheme is regularly kept up to date.
Inheritance
It is essential that cohabitees make provision for their partner in their will if either partner wants the other to be provided for financially in the event of death. If a person dies “intestate”, i.e. without having made a will, then his/her estate is divided according to the intestacy rules. The estate is likely to be divided amongst members of the deceased’s family. If the deceased had no family the estate may revert to the Crown. Cohabitees do not benefit automatically under the intestacy rules.
The Inheritance (Provision for Family and Dependants) Act 1975
If a cohabitee dies intestate or his/her will fails to make any or adequate provision for his/her partner then the surviving cohabitee may be able to bring a claim against the estate of the deceased under this act for financial provision. If two people have lived together in the same household as husband and wife, or as civil partners, for a period of two years immediately preceding the death of one of them, the surviving partner may apply for reasonable financial provision from the estate of the deceased. If this condition is met the cohabitant does not need to have been financially maintained by their deceased partner immediately before the death, but the extent of the cohabitant’s dependence on the deceased partner may be relevant to the exercise of the court’s discretion. Otherwise cohabitants can make a claim against the estate of their deceased partner only if they were being wholly or partly maintained by the deceased at the time of death. In that case the extent of their dependence on the deceased partner will again be relevant to the exercise of the court’s discretion.
If a court does decide to make reasonable provision for the cohabitant of the deceased, the cohabitant’s financial resources, their circumstances and their needs will be taken into account and also, very importantly, their contribution to the welfare of the deceased’s family, including any contribution made by looking after the home or caring for the family. However, the court is also required to take into account not only the size of the estate left by the deceased, but also the resources, circumstances and needs of anyone who would otherwise be entitled to share in the estate, so the final award is something of a balancing exercise.
Children
Introduction
Save in relation to one aspect, there is little distinction between married and unmarried parents. If arrangements cannot be agreed between the parents upon their separation, it may be necessary to seek the intervention of the court in relation to such matters as with whom the children should live and how often they should see the other parent.
Parental responsibility
Where the parents of children are married whether before or after the birth of the children, both automatically have parental responsibility for their children. An unmarried father does not automatically acquire parental responsibility for his children although he always shares financial responsibility for the child with the mother and is normally entitled to contact with the children. Parental responsibility involves legal recognition of the parent’s right to be involved in making decisions about the child. Unmarried fathers can acquire parental responsibility in one of three ways:
- By being included on the birth register. An unmarried father can be included on the birth register if he is present at the registration and signs the register or in his absence, if he fills in a statutory declaration acknowledging that he is the father and this is given to the registrar, or if a copy of a written parental responsibility agreement is presented at the register office. An unmarried father may register the birth of the child without the mother present but only if she has made a statutory declaration acknowledging him as the father, or he brings with him a copy of a written parental responsibility agreement. An unmarried father may have his details included at a later date by registering the birth.
- Through a written agreement in an official form between the mother and father.
- By obtaining a parental responsibility order from the court.
By definition parental responsibility is said to mean “all the rights, duties, powers, responsibilities and authority which by law a parent of a child has in relation to the child and his property”. By way of example, it gives the right to be involved in any major decisions regarding medical treatment, education and religious upbringing. A child cannot be adopted without the consent of all those with parental responsibility and if a child’s mother wishes to change his/her surname or move to another country, she cannot do so without the consent of the child’s father if he has parental responsibility or a court order.
Financial issues and children
All parents have an obligation to maintain their children. The Child Maintenance Service (CMS) makes no distinction between married and unmarried parents of a child and a parent’s liability is not dependant on his or her marital status. Please refer to our briefing note Child Support for further details. Parents can also reach an agreement between themselves about maintenance and there are various options available. Aside from this the court has the power in certain circumstances to order the non-resident parent to settle capital or property for the benefit of children during their minority. This will revert to the non-resident parent usually when the child finishes full time education.
Guardianship
Unmarried couples with children should give particular thought to making wills, and to making provision for guardianship of the children in the event of the death of one or both parents.
Non molestation and occupation orders
The courts are able to intervene in cases of domestic disturbance to prevent the use or threat of violence whether this is directed to the other cohabitee, living in the same property or a child.
In certain circumstances, a cohabitee may be obliged to move out of a property even if the partner who remains does not have a share of the ownership of the property. Although such an order would be limited in duration, it would give the victim of abuse an opportunity to make alternative accommodation arrangements. The court may also make orders for the payment of bills during a period of occupation of this nature.
Cohabitation agreements
In order for cohabitees to protect their legal positions they would be well advised to have a Cohabitation Agreement drawn up. A Cohabitation Agreement is the only way cohabitees can seek to give legal effect to their relationship. The advantages of having a Cohabitation Agreement are as follows:
- It provides a framework for what is to happen on the breakdown of a relationship
- It provides a record of the parties’ intentions
- It provides some certainty for the parties during their cohabitation so that they each know where they stand
- It helps to focus the parties’ minds on the implications of living together and sharing property or finances
Nicola Harries