Cohabitation Rights – Myths and Misconceptions

Despite an ever growing proportion of the population choosing to cohabit rather than get married, nearly half (46%) of adults in England and Wales mistakenly think that couples acquire ‘common law’ rights after living together for a certain amount of time or having children together.

These misconceptions can lead to one party being particularly vulnerable in the event of a separation or death when the potential action that could have been taken to protect them has been left too late. 

Protection available on cohabiting

• Declaration of Trust – Within the property purchase document (TR1) or a separate document when buying or transferring property rights.  Requires assistance of a conveyancing and/or trust lawyer
• Cohabitation agreement – a legal contract between the cohabitees which can cover all aspects of cohabitation to include assets, income, liabilities, occupation of property.  Can be totally unique to the parties but must comply with legal formalities in order to be binding
• Will – to be drawn up by a private client/probate solicitor
• Life insurance – to provide protection in the event of death/severe illness (seek advice from Independent Financial Advisor)

Real life examples where protection can and should be sought:

• Buying a property together and one party has provided the deposit. Consider a Declaration of Trust in TR1 transfer deed and purchase as Tenants in Common in specific percentages rather than Joint Tenants (where property passes automatically by survivorship)
• Legal title (deeds) are in the other party’s sole name and you intend to inject capital or to undertake renovations on the property.  In these circumstances, a declaration of trust to specify the percentage ownership and/or cohabitation agreement in order to regulate the future management of the outgoings in the absence of transferring property into joint names.
• Allowing a new partner to move in to the property and pay half of the bills. This could potentially lead to the creation of what is known as a beneficial interest in the property which was not intended or conversely one party could pay believing they had an interest which was never intended.  A cohabitation agreement to make it clear what was intended either way is advised.  
• A party may also seek for their partner to be able to continue living in the property upon their death.  To ensure this binds the estate cohabitation agreement and will together with life insurance to ensure that any mortgage/outgoings can continue to be paid is advised.

Potential claims available upon separation

• Child Maintenance Service

A biological parent remains responsible for any child.  The amount due will be based on a percentage of their income together with a deduction for the amount of overnight stays the child has with them.

• Schedule 1 Children Act

There is no obligation to provide financial support to a partner even if that person has given up work to care for the children.  There is no obligation to provide that partner with a share of the equity nor any occupation rights to the property.  However, this legislation does provide greater protection to assist in supporting the children of the family to include top up child maintenance (for the very wealthy – earning over £156,000 gross per annum) but more helpfully to provide some protection for the occupation of the home and/or lump sum payments while the children remain dependent.  The emphasis here being that it is during the children’s minority and will therefore usually revert back to the owner upon the children reaching 18 years or finishing full time education

• Trusts of Land and Appointment of Trustees Act 1996

Starting point is that ownership of the home follows the legal title (deeds) but The Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) legislation can provide some protection for cohabitees with or without children if there has been an intention for that party to have an interest in the property verbally or in writing or this can be inferred thorough conduct e.g. a financial contribution to a property, or a party acting to their detriment in reliance on a promise made that they would have some rights to the property.

An extremely complicated area of the law with many cases turning on recollections of who said what, to whom and when.  This can lead to high level of cost, stress, uncertainty and unfairness.  Far better to spend much smaller amount on a cohabitation agreement at the outset to prevent that risk.

• Inheritance (Provision for Family & Dependants) Act 1975

An area for the Private Client team but essentially without a will a dependant partner with or without children will have no automatic rights on the death of their partner.  If they are not included in the will they could be left vulnerable upon death.  There are some claims that can be made to contest a will if you can prove you were a dependent of the deceased and you had lived together for more than two years before the death. 

Another complicated and emotional type of application at a time when parties are grieving.  This can be prevented by ensuring this has been covered in a will and/or cohabitation agreement.

It is crucial that the myth about automatic rights when living together is dispelled at an early stage and not left until it is too late.  There continues to be campaigns to persuade government to provide a greater level of basic protection to cohabitees but until then, the onus is on the parties themselves to ensure they are adequately protected.

Please contact us if you would like to discuss putting a cohabitation agreement in place or any aspect of family law.