A conversation for co-habitees when everything is rosy

Year Published: 2013

Quite often we see clients who choose to live together rather than getting married. The number of couples who are living together has doubled since 1996 and is now approximately 5.9 million, representing a significant 11.7% of the population.

In some cases people choose to have a religious ceremony but not a legal ceremony. In these circumstances the couple will only have the same rights as a couple who live together. Legal rights are very different for married couples who are separating, under the laws of England and Wales, than for those who are co-habitees and have chosen to live together.

The law for married couples has clear and strong powers to address financial matters arising from the breakdown of a marriage, addressing provision from income, capital (including savings, investments and the house) right through to pension and family business interests. The law is less robust for co-habitees and giving that living together is on the rise, you may need to know what can be done in the event of separation.

The inequality of the law for couples living together may seem unfair, especially when you have a situation where a couple have lived together, to all intents and purposes, as man and wife but simply didn’t tie the knot. In a poll in 2008, 51% of people believed legal rights are afforded through co-habitation however, the idea of being a ‘common-law-wife or husband’ is a myth. Despite numerous calls for reform, changes have not yet been made to the law.

The house is often a massive issue when a couple separates. Quite often there is little thought given to how a couple chooses to hold their house when buying it and the legal implications of either being joint tenants or tenants in common are disregarded in the excitement of buying a house. Shares are not specified for joint tenants whereas they are specified for tenants in common.

Specifying shares in a house through the land registry

Earlier this year the Land Registry introduced different forms to make the process of specifying shares in a house clear. Whilst this has always been possible it is clear that small steps are being taken to try to educate new homeowners to the options available. Where arrangements are more complex, a bespoke trust deed may be more appropriate and can provide an insight into the intentions of the couple at the time they purchase the house. Although this may be a difficult conversation to have with each other when everything is rosy, it could save a lot of time and money in trying to resolve how equity should be distributed fairly if a couple separate in the future. If matters cannot be agreed between a separating couple, the court has the power to make a declaration to specify the beneficial interests of the parties and to order the house be sold.

It is also important to understand the difference between “being on the mortgage” and being registered as a joint owner of the property. The mortgage is essentially the debt and the registration as joint owner represents part ownership of the property.

Co-habitation agreements

A co-habitation agreement is another way of setting out exactly what a couple expects of each other when they move in together. Having an agreement that documents a couple’s intentions from the beginning can be invaluable if you separate and it is not amicable.

There is no provision in law to deal with the transfer of pensions or savings held in the sole names of those living together as there is with married couples, and there is no provision for maintenance payments for unmarried couples.

The Child Support Agency

If there are children as a result of the relationship then there are some tools to help financially provide for the children. In the first instance, an application can be made to the Child Support Agency. There is a simple calculation to secure maintenance and this can be put in place by a family arrangement or through the CSA themselves who have powers of enforcement in the event of default.

Alternatively, in specified circumstances an application can be made to the court under schedule 1 of the Children Act 1989.The court has the power to make orders to transfer property or make orders for lump sum payments and on going maintenance payments for the benefit of the child.

Family law remains a complex area of law whether you have married or not; It is therefore important you get detailed advice early on. If you require legal advice please contact a member of our Family team on 0161 475 7676.

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