FINANCES ON COHABITATION BREAKDOWN

If you live together and are not married you are in a very different legal position from those couples who are married. In reality, there is no such thing as “common law marriage” and you do not get the same rights as a married couple merely because you have lived together for a length of time.

As the Law stands there is no legal recognition of the unmarried couple’s relationship. As a cohabitee you are not entitled to make any claims merely because you have lived with someone – no matter how many years you have lived together. You cannot claim any financial support by way of maintenance; you cannot claim any rights or interest in your partner’s money or assets and you do not gain any legal entitlement in property where you have lived with your partner, if that property is owned by them in their sole name, merely because that property has been your home.

However, there are some claims which you can make as a cohabitee if the relationship breaks down:-

1          Claims over your home

The house in joint names

If the home is in joint names then you are entitled to an interest in that property. The amount of your interest will be governed by how legally your own that property with your partner. Your share in the property will depend upon whether you are Joint Tenants or Tenants in common and the way in which you legal “hold” that property. You may need legal advice as to the way in which you hold the property and what that means in terms of your share in that property.

The house in sole name

If the home is owned in the sole name of only one of you it is possible that the other party may have a claim to an entitlement. Such claims result mainly by virtue of a specific intention or agreement that the non-owning person should have a share in the property or because the non-owning party has paid money for improvements believing this entitled them to a share. Once again the law relating to interests in the solely owned property is very complicated and legal advice will need to be given in the light of very detailed information as to the history of the purchase of the property and the relationship.

This is a complex area of law and it is important that you seek advice as to what your claim may be.

2          Financial claims where there are Children

If you have children with the person you live with then this may give rise to other financial claims under the Children Act.

Maintenance for children is decided by the Child Maintenance Service. Agreement as to the level of child maintenance is positively encouraged and can usually be achieved by basing the figure for maintenance payable upon the statutory formula for maintenance payable. We can advise you upon the maintenance assessment in your circumstances.

There are additional circumstances where the court can still make orders about finances for children and there are still potential claims by the parent with care against the non residence parent. These claims are for specific lump sums in limited circumstance and for housing to be provided. The provision of housing does not necessarily take away the non resident parent’s legal interest or entitlement in a property but may require that the property should be maintained for a child or children to live in during their minority.

3          Other assets and money

There may be other assets and money to sort out when you separate. This only applies to money and assets which are in joint names. The same applies with these assets and property as with your home: you will not gain any claim or interest because you have lived together.

WILLS AND PENSIONS

Where a couple are unmarried and one of the couple dies without a will the surviving partner will get nothing.

Cohabitants are not entitled to receive the state pension or bereavement allowance for deceased partners. In addition, many pension schemes may not pay out to unmarried partners in the event of death.

An unmarried couple should make a will and should discuss with their pension provider whether there is any way to nominate their surviving partner to benefit under their pension scheme.

SET UP A LIVING TOGETHER OR COHABITATION AGREEMENT

Such agreements in intended to regulate who owns what proportion of property or savings and help to avoid misunderstandings that could end up in court. Providing they are properly drafted such agreements are capable of being enforced in the courts.

Agreements are intended to resolve the position on the relationship breakdown ad avoid the trauma of disputes being taken to court. This is advantageous because disputes between former cohabitants which reach the courts are often protracted and expensive and often there is little evidence to support what either party says. A cohabitation agreement is designed avoid future litigation.

The freedom for couples to create an agreement dealing with matters, for which the current laws fail to cater for, is something we would strongly advise cohabiting couples to seriously consider.