The end of the "Common Law Marriage" myth?

The Labour Government are currently carrying out a consultation on reforming laws to strengthen protections available for cohabitants at the end of their relationship.

Reasons for reform

There is a common misconception that cohabiting couples can form a “common law marriage” after living together for a period of time.

Latest statistics show a decline in the number of marriages and civil partnerships in comparison to a growth in cohabiting couples. Despite this, the relevant family legislation only permits couples who are married or in a civil partnership to seek financial orders from the court. Financial orders are determined by the principles of fairness and equality, prioritise the needs of children and deal with assets including the family home, savings, pensions, maintenance payments and debts. Cohabitating couples must instead rely on general law of contract, property and trusts to resolve their disputes which is typically more costly, complicated and unfair compared to family law legislation.

The family law group Resolution have been campaigning for change to the law since the turn of the century. Some of the key issues with the current set of protections for cohabitants on separation are:

• The complexity of property law and trusts principles often require the financially weaker party to demonstrate direct financial contributions to the acquisition of the family home.
• Childcare contributions and non-financial contributions are largely unrecognised.
• Schedule 1 to the Children Act 1989 is out of date and mostly benefits the children of wealthy parents.
• Victim-survivors of domestic abuse (including economic abuse) are often adversely affected due to the complexity and cost of litigation which forces many cohabitants to seek unfavorable out of court settlements.
• Partners have no claims to each other’s pensions or the right to receive maintenance payments for themselves.
• Partners have no automatic right to each other’s savings and property (unless legally and/or beneficially held in their joint names).
• On death, if your partner dies intestate (i.e. without a Will), then you will have no rights to their estate, unlike married couples or those in a civil partnership.

How could the law change?

Resolution are campaigning for the following changes:

• New legal rights to separating cohabiting couples if:
  • they have lived together for at least 3 years; or
  • the couple have a child together or a child lives with the couple and is considered a member of the family.
• The court could be guided by a “needs based” approach rather than the assumption of a 50:50 split associated with the current laws on marriages and civil partnerships to determining outcomes on separation. This will prioritise children and protect the economically weaker partner who may have stopped working to look after children of the family and offer a better framework for victims of domestic and economic abuse to access support following the breakdown of the relationship.
• New remedies for separating cohabitants could reflect what is available for divorcing couples and those in civil partnerships. The court should have access to a broad set of remedies which reflect what is available on divorce, including property adjustment orders, lump sum orders and pension sharing orders. However maintenance orders are only to be available in exceptional circumstances.
• New rights to surviving partners if their partner dies intestate if, certain conditions are met.

How can you protect yourself now?

Whilst we await the outcome of the consultation (which is expected later this year or early next year), here are some steps you could take now to protect your position as a cohabiting couple:

1. Enter into a cohabitation agreement. This will set out the arrangements for finances, property and children whilst you are living together and if you split up, become ill or pass away. Although it is preferable to enter into a cohabitation agreement before you move in together, you can still enter into a cohabitation agreement afterwards, especially if you subsequently decide to have children or acquire a mortgage.
2. Prepare or update your Will to include your partner as a beneficiary and potentially an executor. You might want to explicitly state in your Will that your partner will receive your legal share of the family home if only one partner owns the property or there is a declaration of trust.
3. Change the ownership of your family home from sole or tenants in common to joint tenants so that on the death of the first of you, the survivor will automatically inherit the deceased partner’s share. This will apply regardless of the contents of the deceased partner’s Will.
4. If the family home is owned in the sole name of one partner, you could create a declaration of trust over the property so that it is owned beneficially by both partners. This would mean that on death, the surviving partner could retain the benefit a percentage ownership of the property reducing the risk of being left with nothing.
5. You could also consider holding bank accounts in your joint names so that on death the survivor will automatically inherit the monies in that account.

How can we help?

If you would like to find out more about the rights for cohabiting couples and the steps you could take now to protect your legal position, or you are seeking advice on any other aspect of family/relationship breakdown, please contact a member of our Family Law Team on 01242 574244 and one of our experienced solicitors will be happy to meet you and discuss your situation.

Similarly, if you would like to find out more about preparing a Will, please contact our Private Client Team on 01242 574244.