At Eric Robinson Solicitors we advise and support unmarried couples who are separating, helping them deal with the financial consequences.
There is a common belief that if you live with someone for a certain length of time you become “common law man and wife”. This is not correct; there is no such concept.
Where parents are not married or civil partners, it is always still important to consider the financial arrangements for children. This is often left to the Child Support Agency to calculate but in certain cases the children are entitled to financial provision from the wealthier parent, for example to help with accommodation, school fees, care and so on. This can sometimes also include the provision of maintenance when a child goes on to university or further education.
There is no one single piece of legislation that a separating partner can use in order to resolve property, financial and children issues on the breakdown of the relationship. So if you are thinking about cohabiting or buying a property together, you should seek advice about what you could do now to prevent arguments later on. A cohabitation agreement or trust deed can save a lot of heartache and costs if you decide to separate. They can also regulate how assets and income are to be dealt with during a relationship.
Unmarried couples (COHABITEES) living together, with or without children, are the fastest growing family type in the UK. Despite this, it is much less common for cohabiting couples to take any form of legal advice prior to the cohabitation, or at the point of breakdown. This means that many people have either an incorrect or incomplete understanding of their legal rights in this regard.
UNDERSTAND THAT COHABITEES DO NOT HAVE THE SAME RIGHTS AS MARRIED COUPLES
It is important to appreciate from the outset, that you do not have the same legal automatic entitlement to claim against your partners’ assets and income as you would do if you married.
There is no such thing as a “common law” marriage. This means that it is perfectly possible to leave a long relationship without having any legal ability to claim against any asset or income of your partner.
IDEALLY BOTH SEEK LEGAL ADVICE BEFORE COHABITATION BEGINS
There are various factors which will make a difference to your rights and options when cohabiting such as; whether one of you moves in with the other, you move in together, whether you move into rented or owned property, or whether any owned property is in joint or sole names.
If you both obtain legal advice to understand the implications for yourselves, and how your best interests could be protected at the outset, you can then jointly discuss options and agreed a way forward.
BE OPEN AND HONEST
Do you have a good idea of what your partner’s finances are?
Money matters are one of the main reasons that relationships breakdown, therefore, having disclosure of your partner’s finances can help you decide if an Agreement is necessary and appropriate. Financial disclosure is often necessary to draft an Agreement, whether this is for cohabitation or separation, and will always assist with negotiations.
CONSIDER A COHABITATION AGREEMENT
A Cohabitation Agreement will allow you to consider firstly the legal and practical arrangements for living together, such as who will pay for what and how much you will each own. Secondly, the agreement considers what the legal and practical arrangements would be if you decided to separate; such as who will stay in the property and how the household contents would be divided.
In order to proceed with a Cohabitation Agreement, both partners will need to agree to commit to the process. This will involve financial disclosure from both partners, separate legal advice for both partners and then they would need to agree the terms for inclusion in the Agreement itself.
The Cohabitation Agreement will then form a legally binding contract between the partners. In the event of one or both partners not complying with the terms, this can be enforced through court as breach of contract.
KEEP MATTERS UNDER REVIEW
Whether or not you decide to enter into an Agreement, you should always keep your living arrangements under review. As your relationship develops and your personal circumstances change, your legal rights may also change.
- If you get engaged, your rights may increase
- If you have a child together, you may be able to pursue financial claims as co-parents in the event of your separation
- If you change the legal ownership of the property and / or the mortgage, your rights will change
- If a non-owner partner makes a financial contribution to the property by paying for e.g. structural renovation or continuous mortgage payments, your rights may change
Most importantly, if you decide to marry, you will gain automatic financial rights against each other as soon as you say “I do”. You may therefore wish to consider entering into a Pre-Nuptial or Post-Nuptial Agreement to clarify each others’ expectations and responsibilities post marriage.
Once it becomes clear that there is going to be a separation, whether as a joint decision or otherwise, the sooner that each partner can appreciate that this will have a huge impact on each of you, the better. Being kind to each other will make the practicalities and process as smooth and as easy to achieve as possible.
If you can keep communication open and courteous, this will ultimately be beneficial to both of you throughout the negotiations that will now need to take place. This will be needed whether or not you had considered this by means of a Cohabitation Agreement.
SEEK LEGAL ADVICE TO MANAGE EXPECTATIONS
Having a realistic understanding of your legal rights following a separation is paramount. You will need to know what claims, if any, you can pursue against your partner before negotiations begin in any level of detail.
It could negatively affect your position if you make offers, or enter into detailed communication involving figures, before you know your legal rights and responsibilities.
For example, you do not want to find out that you have made an offer to pay your partner a lump sum, if legally you have absolutely no duty to pay anything. Likewise, it will not help you to say that you are entitled to a specific outcome, if legally that is not the case. These approaches will both cause unnecessary delay, likely raise frustration between you, and make each partners expectations unrealistic.
PICK YOUR BATTLES
It is easy for separating couples to become distracted by issues which may be important to them, but overall would be largely irrelevant to the legal issues that need to be resolved. For example if you get stuck on agreeing ownership of household possessions, the cost of dealing with this legally, could quickly outweigh the value of that item!
The easiest way is to focus on your ultimate aim and make sure that every step you take in negotiations is helping you get closer to this. Being realistic as to your rights will keep you focused and help ensure that your legal costs are as proportionate as possible. Remember that not everyone will have the legal right to pursue a claim against their partner through court. In these circumstances, meaningful and genuine negotiation will be key to achieving the best possible outcome.
THE COURT OF LAST RESORT
Depending on your circumstances, there may be a legal right to pursue a claim against your partner through the court. This could be through the Small Claims Court for a debt due or possession of items; The County Court for breach of contract or property declaration of ownership; or The Family Court for financial claim for a child of the family.
You may find it helpful to attend mediation before being able to issue any application for the above. In addition, the costs and time that these proceedings will sometimes take, will delay matters being resolved and you cannot rely on being able to seek costs from the other party in all of these cases.
Given these issues court proceedings should be viewed as a final option if no other alternative option has proved successful.
CONSIDER A SEPARATION AGREEMENT
Once you have done the hard work of reaching an agreement, you should consider this being formalised by means of a Separation Agreement.
A Separation Agreement will confirm the terms of which you are separating and the rights and responsibilities to implement after separation. For example, who will continue to live in the property, whether the property will be sold or transferred; and pending such transaction who will be responsible for paying the household outgoings.
In order to proceed with a Separation Agreement, both partners will need to be in agreement and commit to the process. More than likely, financial disclosure from both partners with be necessary, and it is advisable for both partners to seek independent legal advice. If there was a Cohabitation Agreement, this would be considered, and then the terms for inclusion in the Agreement itself would need to be agreed by both partners.
As with a Cohabitation Agreement, the Separation Agreement then becomes a legally binding contract between the partners. This will mean that if any of the terms of the Agreement are not complied with, they will be classed as a breach of contract and can be enforced through the courts.
Cohabitation work can be undertaken at all our offices with a family law expert.