For Unmarried Couples

For Unmarried Couples

The law governing property is found scattered throughout legislation and also case law, which means that individual case outcomes can lead to considerable revisions of the legal position for an unmarried couple owning a property together.

Settling property and financial matters for unmarried couples

Each of the matters referred to below can prove expensive to litigate. This is because the law is so uncertain and is not really designed to address the needs of couples and their offspring in an unmarried relationship. Various attempts have been made to secure changes in the law but these have generally been defeated by the public policy position which provides that if people wish to have the protection of the laws which govern marriage, they can get married. 

It is therefore advisable for cohabiting couples to draw up legally binding agreements in the form of trust deeds or cohabitation agreements which record their intentions during their cohabitation and in the event of a separation. Where parties have failed to enter into such agreements, they should enter into separation agreements in the event of a breakdown in the relationship so that their intentions are clear. This can avoid a lot of expensive litigation.

Pensions

Cohabiting couples do not have any entitlement to make claims on the pension of their partner.  In the event of a death they may be able to satisfy the pension Trustees that they have some entitlement under the pension as a dependant or family member but they will not be entitled to a widow or widower’s payment.  Recognition of their claim will be entirely at the discretion of the pension trustees.  The courts have no role in this matter and it is not possible for cohabitees to make an application to the court requiring receipt of share in a pension which is not in payment.

Property

Where properties are jointly owned decisions will depend on the legal agreements entered into by the couple.  Therefore if a cohabiting couple purchase a house together each signing the Transfer Deed as purchasers, having made no attempt to define their shares, it will be assumed that they are each entitled to 50% of the equity in the property.  As a result of a key case, the Court will also consider the post separation conduct of the parties in an effort to establish whether there was an implicit change in the legal agreement.

It is not usually possible to prevent a sale of a jointly owned property although it is not unusual to find that one owner refuses to sell and it is then necessary for the other owner to apply to the court for an order for sale.  This is an expensive and laborious process but is sometimes the only option available in the face of an intransigent joint owner.

Where there are children of the family under the age of 18 one joint owner may be able to establish that he or she should remain in the property during the children’s minority - up to the age of 18.  In that case the person who is allowed to stay living with the children will usually be required to return to the other joint owner his or her equity in the property when the youngest child reaches the age of 18.  This can put off a difficult housing decision for one of the parties who may find it more difficult to obtain a mortgage when their youngest child is 18; but deprives the other owner of their share in the capital.  It can resolve immediate problems of the housing at least for the children and their primary carer.

Capital

The initial assumption in respect of capital (for example money in the bank, the interest in insurance policies or other investments) is that those assets belong to the person in whose name they are held.  It can be possible to establish that such funds were held on trust for the other party.  Trust law is potentially an expensive and difficult area of law.

Maintenance

Under Schedule 1 of the Children Act the parent who remains in occupation of a property until their youngest child reaches the age of 18, may be able to claim income to support that residence.

A court will only award maintenance if the other partner can afford to pay it.  This therefore involves a careful means assessment of each party’s income and outgoings and financial needs and resources generally.

It is not possible for couples who do not have dependent children to claim maintenance no matter what their personal circumstances.

Child maintenance

The courts no longer (generally) deal with child maintenance.  There are some exceptions to this rule.  The parent who has day to day care of the children (or the parent who receives the Child Benefit) may apply to the Child Support Agency (now known as C-MEC) for child support. This is calculated as 15% of the other parent’s net income for one child, 20% for two children and 25% for three or more children.  A reasonably precise means assessment can be undertaken online at www.csa.gov.uk

Inheritance

Under the provisions of the Inheritance (Provision for Family and Dependants) Act 1976 it is possible for members of the deceased’s family or his/her dependants to make a claim against his or her Estate if the deceased fails to make adequate provision for the surviving family member or dependent.  Such claims must be lodged with the Court within six months of the Grant of Probate.