New rights due for cohabitees

The cohabiting couple continues to be the fastest growing family type in the UK with most being in the 30-34 age-group.

The younger generations are clearly favouring cohabitation over marriage. Why? This is likely to be because of their negative attitudes to marriage, combined with the emotional and financial cost of organising a wedding.

With so many cohabiting couples in the UK, it is concerning that many are unaware of what would happen to property and possessions should their relationship come to an end.

Despite various myths, there is no such thing as a common law partner. Cohabitees may not have the rights they think they do in the event of separation.

‘Living Together Agreements’ can set out agreed arrangements should cohabitees decide to go their separate ways. Absent of such agreement, the strain of resolving matters can be significant. Unlike married couples, there is no straightforward legal framework to help determine how assets should be split after any separation.

However, The Cohabitation Rights Bill [currently before Parliament] aims to establish a framework of rights and responsibilities with a view to providing basic protection for cohabitants, whether of the same or opposite sex.

Although not yet law, the proposed legislation will allow cohabiting couples with children, or those without children who have cohabited for two years or more, the right to apply for a Financial Settlement Order. The court may make such an order if satisfied that the parties are no longer cohabiting and that any applicant has suffered an economic disadvantage or that their partner has retained a benefit as a result of any qualifying contribution made by the applicant.

The court must have regard to the following factors:-

- The welfare, while a minor, of any child of both parties;

- The [current or reasonably foreseeable] income, earning capacity, property and other financial resources of the parties;

- The [current or reasonably foreseeable] financial needs and obligations of the parties;

- The welfare of any child who lives or might live with either party;

- The conduct of the parties but only if inequitable to disregard it;

- The circumstances in which the applicant made any qualifying contribution, especially where the respondent shows that such contribution was made despite the respondent’s express disagreement.

A financial settlement order may require one party to:-

- Make a lump sum payment [including by instalments];

- Transfer or sell property;

- Share part of a pension pot.

The Bill envisages imposing a clean financial break between former partners, with no provision for ongoing ‘maintenance’. It aims to put parties in the position they would have been had they not cohabitated.

In certain circumstances, consenting couples can decide to opt out and not be bound by this proposed legislation.