Cohabitation – common misconceptions of a common-law spouse
In a recent Office for National Statistics report, the number of cohabiting couple families have continued to grow faster than married couples and it has increased by 25.8% over the last decade. Despite the increase in the number of couples cohabiting, rather than marrying, the common misconceptions and failure to consider what may happen if the relationship ends, continues to make a relationship breakdown even more distressing than it might otherwise be, and the law has not kept pace with the changes in society. Despite this topic being discussed regularly, in particular discussion surrounding the need for law reform, it is also something that it readily dropped from the legislative agenda.
People are frequently under the misapprehension that they are a common-law spouse and they will be able to receive a share of the home they may have been living in, but this is a concept which does not exist in the law of England and Wales.
If you are married, even if there has been a short marriage, the court has a wide discretion to make orders in respect of assets belonging to either party in order to redistribute any wealth, in order to reach a just and fair result, often with the overriding objective of meeting the needs of the parties. This safety net does not exist with cohabiting couples, no matter how long the relationship may have lasted. There are two pieces of legislation that can be helpful to cohabitants if they have had children together, and one if they have not.
If cohabiting parties separate when they have not had children, the court’s power to make orders are usually limited to the law of trusts and an application would have to be brought under the Trusts of Land and Appointment of Trustees Act 1996. This is not designed to enable parties to separate with the funds they need to start their new life, but to look more strictly at the intentions of the parties when they purchased the property and/or the contributions which have been made. So, for example, imagine a situation where two people meet and decide to live together, but they do not marry. One of the parties owns a property in which they will both live. They agree that the owner will pay the mortgage, and the other party will pay for the food and other expenses. In the absence of any agreement saying otherwise (such as a declaration of trust or evidence about discussions which took place to show that the parties had a common intention and that they acted to their detriment in reliance on that agreement) the non-owning party would not be entitled to anything from the property and the court would also not have the power to make orders for maintenance or to share pensions.
If those parties had children, then the court could make orders which could allow one party to live in the property during the children’s minority, but such an order would be temporary and would not adjust ultimate ownership of the property. Although this may provide some respite, it falls far short of the remedies which are available for people who are married.
In addition to the more limited avenues available cohabitants, these proceedings can be expensive, lengthy and have a great deal of uncertainty. However, there are steps that you can take to try to avoid finding yourself relying on court proceedings to resolve these matters. These include:
- When purchasing any property, making sure that the legal and beneficial titles expressly set out the nature of your interest in the property. This is known as an express declaration of trust and usually conclusive.
- Enter into a cohabitation agreement. This is a document which can set out what your intentions are in respect of property ownership, the financial arrangements generally during cohabitation and what you agree should happen if you separate. Although this is not legally binding, it will provide clear evidence of your intentions.
- You should also think carefully about inheritance, as being unmarried will mean that certain tax reliefs are unavailable and if you die without a will, cohabitants are not treated the same as spouses in terms of automatic entitlement to a share of the deceased’s estate.
If you would like advice on any aspect of cohabitation, please contact Naheed Taj, Head of Family on 020 3988 2027 or [email protected].
This paper is intended to be a brief note for clients and other interested parties. The information is believed to be correct at the date of publication but should not be relied upon as a substitute for professional advice. Please speak to a member of our team.