With the number of couples choosing not to marry or form a civil partnership increasing, are cohabitees protecting their rights? Melissa Mitchell from our unmarried family finance team considers the issues.
Recent studies show that marriage and civil partnership rates are forecast to fall from today’s current rate of 1 in 100 couples, to just 1 in 400 couples by 2062.
This is a reduction of 70%, leaving a significant proportion of relationships unsupported by protective legislation, like the Matrimonial Causes Act 1973. The MCA 1973 affords protection, particularly to a stay-at-home parent who is seen to contribute equally to the family, and are afforded an equitable starting point during financial remedies following divorce, unlike cohabiting stay at home parents, who can often be left without any recourse to the family home.
There is also evidence to suggest that poorer couples are less likely to get married or form a civil partnership than their better off counterparts. This group of potential cohabitants are more unlikely to seek legal advice on how to protect themselves if a cohabiting relationship should end, and there is currently a lack of education to prevent issues arising or protect cohabitees rights.
Championing change for cohabitees
Calls have been made on the government on behalf of both advocates of marriage and supporters of cohabiting couples.
In relation to marriage, a removal of the couple penalty and introduction of meaningful financial benefits have been requested to try and encourage more couples to marry or form a civil partnership, stating that it benefits both the couple and any children.
For cohabiting couples, the Women and Equalities Committee put forward a report to the government proposing reform to the law surrounding cohabitation and to offer legal protection to cohabitants. The government responded by saying that existing work on the law of marriage and divorce must conclude before they could consider changes in the law in respect of rights of cohabitants. Considering the trend for couples to not marry is set to increase, this leaves a large proportion of the population with very few rights and even less education on how to protect themselves.
What type of issues can occur when a cohabitees relationship comes to an end?
There are several issues that occur when couples living together end their relationship for such as:
If the property is owned solely by the one party and the other party are not contributing to the mortgage, or making substantial contributions to the property, it is unlikely the non-paying party will have any rights/beneficial interest in the property when the relationship comes to an end.
This can also cause problems for a sole owner the other way around, as if the sole owner allows their partner to move into their property and make contributions or substantial investment, the contributing party may be entitled to a beneficial interest in the property.
If two parties purchase a property in joint names as ‘Joint Tenants’ and one party dies, the full beneficial interest in the property passes to the other party under the rule of survivorship. If the relationship breaks down, each party may prefer for their ‘share’ to pass to their beneficiaries in the event of their death, however, they will need to sever a Joint Tenancy to do this, or to have been recorded as Tenants in Common at the time of registration.
Often when cohabiting couples have children together, there is a misconception that the party with main caring responsibilities is entitled to remain in the family home. This is often not the case unless an agreement can be reached by both parties.
What is the best approach to becoming a cohabitant?
Ensure the cohabitee has an understanding of their rights, or lack of rights in relation to the property they are going to be living in. Discuss the situation with their partner and what they would like to happen in the event of the relationship breaking down.
These discussions are useful and can help resolve issues more easily when a relationship breaks down, however, this is based on the breakdown being amicable.
The best protection would be to form a cohabitation agreement and each party seeking legal advice prior to signing and executing the deed. Within this agreement, you can record joint intentions on what should happen in the event of the relationship breaking down. The hope is that you would never look at this document again, however, if the worst happens, you will have peace of mind of knowing how to deal with the situation fairly.
Need some advice? Get in touch today