Cohabitation: The Facts and the Current Law

On 9th October 2013 the Cohabitation Bill was due for its first reading in the House of Lords.

The Bill is described as  ‘a Bill to make provision for certain protections for people who live together as a couple or who have lived together as a couple, and to make provision about the property of deceased persons who are survived by a cohabitant, and for connected purposes’

Despite belief to the contrary, unmarried cohabitating couples do not have the same rights as those who are married. When two people marry, they automatically, by law, have a financial obligation towards one another upon separation and any assets owned by either party are taken into account when deciding a financial settlement.

There are many unmarried couples who believe that they are protected by common law as if they were a wife or a husband. This is a myth with is not supported by the law.

When an unmarried couple separate, each party retains the assets which are in each of their names, irrespective of whether that is the family home, or the family business. To contest this, the party whose interest has been undocumented will have to go through a struggle of establishing that there was a joint intention for them to have an interest. At the present time, where a dispute over property arises between co-habitants all that can be relied upon is trust law and such law is complex.

As matters stand, ex-cohabitants who are financially able to consult Solicitors may well find themselves expending more money than they would otherwise do so, because of the lack of appropriate law aimed to address their particular difficulties.

It is these problems The Cohabitation Bill is designed to remedy.

PUT IT IN WRITING

Whether an asset is to be held in joint names or one party’s sole name, a document clearly stating what the parties intend for each one to own allows for transparency and certainty. Without such a document, the Court will interpret the intention based on fairness, by looking at the actions and behaviour of each party during the period of ownership.

Court proceedings and the extensive examination process of the relationship can prove costly and time consuming and, most worryingly, the outcome is uncertain.

The best way for any couple purchasing a property or acquiring a business jointly is to have a formal document such as a Cohabitation Agreement or an express Declaration of Trust stating the distinct shares of how the property and/or business will be held.

We at Josiah Hincks are able to prepare both of these documents to record each parties share, who has contributed what, and what will happen should the asset be sold or if the relationship breaks down.

We are also experts in dealing with cases where no such Declaration of Trust or Agreement exists and are able to advise client’s as to the options available to them and their rights.

For any advice on such issues please contact one of Josiah Hincks family law solicitors in Leicester, Blaby or Coalville who will be able to discuss the case with you and assess whether it merits further investigation.