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Millions of people currently cohabit in England and Wales, and the numbers are likely to rise. Most people do not appreciate that at present cohabiting couples do not have any financial obligations towards each other. In fact, no matter how long they have been together, cohabiting couples currently have no legal obligations towards each other arising simply from their shared life together. Cohabiting couples may create legal obligations towards one another in other ways, but they never automatically become financially responsible for each other in the way that married people do. Although a Law Commission Report has suggested that legislation be introduced to provide some cohabiting couples with greater financial security on separation, the Law Commission’s recommendations have not yet been accepted, and will, in any event, take a number of years to implement. So for some years to come it is likely that cohabitees whose relationship comes to an end will have to continue to manoeuvre their way through a patchwork of legal rules, most of which were not designed for, and are not suited to what are essentially family relationships.

'Common law marriage'

End of the relationship

Same sex couples

Death of a cohabitant

Inheritance and pension rights

Protecting yourself

Law Commission paper

Common law marriage

There is a thriving popular myth that in England and Wales people who live together as man and wife without getting married eventually acquire some special legal rights in relation to each other, similar to those enjoyed by people who marry. The newspapers regularly use the terms ‘common-law wife’ or ‘common-law husband’ as though they meant something more than ‘cohabitee’. In fact, these popular terms are, for legal purposes, meaningless.

‘Common-law marriage’ is a technical term which describes the highly unusual situation in which, because of extreme circumstances – shipwreck, natural disaster, imprisonment as prisoners of war – a couple are unable to go through the normal marriage ceremony, but make as good an effort to marry as possible - for example exchanging vows on the uninhabited desert island on which they are stranded. A ‘common-law marriage’ must take place abroad, so an exchange of vows in England can never qualify. Recognition of a ‘common-law marriage’ is very, very rare in England and Wales. In all but the most exceptional case - the desert island case - people who live together as man and wife without going through a ceremony of marriage acquire no special rights or duties in relation to each other. Unfortunately, the majority of people who cohabit believe, wrongly, that the relationship they have with their partner is legally similar to marriage in some important ways, and they fail to take steps to protect themselves from financial and other problems that may arise at the end of the relationship.

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End of the relationship

During the course of the relationship an unmarried couple, who are, of course, able to buy property together, have children together, and make wills in each other’s favour, are unlikely to worry very much about the law’s attitude towards them. However, they may be distressed to discover that they have little or no recognition or financial protection when the relationship ends.

When a relationship between unmarried partners ends, whether because the couple want to separate or because one of them dies, the two people are generally treated by the private law as two unrelated individuals, no matter how long they have lived together. In simple terms each person takes out of the relationship the property which they have brought into the relationship. Money or assets acquired during the relationship belong to the person directly responsible for acquiring the money or assets, and are only shared if there is a clear agreement to do so. Any specific agreements which the couple have entered into will operate as ordinary contracts, but the courts will presume, unless there is very clear evidence to the contrary, that neither party intended to give the other anything as a gift. Although this sounds quite simple, and in some cases may be quite simple, property law is often not straightforward, and the unravelling of the couple’s financial relationship can prove complex and difficult.

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Same sex couples

Since December 2005, same sex couples have been able to formalise their relationship by signing a civil partnership registration document; however, heterosexual couples cannot become civil partners, and must marry if they wish to formalise their relationship. Essentially [see Civil Partnership article for more detail] civil partnership creates a range of mutual rights and responsibilities within a formal legal relationship which is very similar to, albeit not precisely the same, as marriage. These rights and responsibilities arise only with the creation of the civil partnership, which involves a series of legally significant acts very much like those associated with legal marriage. Unless a civil partnership has been registered, the rules governing cohabiting same sex couples are essentially the same as the rules governing cohabiting heterosexual couples.

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Death of a cohabitant

It is always important to make a will, but it is particularly important for cohabiting couples to do so. Unlike a surviving husband, wife or civil partner, the cohabitant of a person who dies ‘intestate’ that is to say without having made a will, has no automatic right to inherit anything under the relevant legal rules, the rules of intestacy. This is the case even if the couple have lived together for many years, and have had children together.

However, if two people have lived together in the same household as husband and wife, or as civil partners, for a period of 2 years immediately preceding the death of one of them, the surviving partner may apply for reasonable financial provision from the estate of the deceased partner. In these circumstances there is no requirement for the cohabitant who is applying for financial provision to have been maintained by their deceased partner immediately before the death, but the extent of their dependence on the deceased partner may be relevant to the exercise of the court’s discretion. Otherwise, cohabitees can make a claim against the estate of their deceased partner only if they were being wholly or partly maintained by the deceased at the time of the death, in which case, the extent of their dependence on the deceased partner will be relevant to the exercise of the court’s discretion. In both cases the cohabitant of the deceased may claim either on the basis that there is no will, or that the will that does exist does not provide them with reasonable financial provision.

If a court does decide to make reasonable provision for the cohabitant of the deceased, the cohabitant’s financial resources, their circumstances, and their needs will be taken into account, and also, very importantly, their contribution to the welfare of the deceased’s family, including any contribution made by looking after the home or caring for the family. However, the court is also required to take into account not only the size of the estate left by the deceased, but also the resources, circumstances and needs of anyone who would otherwise be entitled to share in the estate, so the final award is usually something of a balancing exercise.

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'Next of Kin'

‘Next of kin’ is not a legal term, but is used by hospitals to mean the person who will be informed that the patient is in hospital, and who will be provided with information about the patient’s condition and treatment, and who will sometimes be asked for guidance on the patient’s wishes if the patient is unable to communicate his or her wishes. Traditionally hospitals have consistently recognised spouses and close blood relatives as next of kin, while sometimes excluding cohabiting partners, particularly same-sex cohabitants. However, most hospitals are now prepared to treat a cohabitee as the patient’s next of kin, and the Department of Health has amended its policy guidance to NHS staff to extend consultation with next of kin to include unmarried partners. It is, in any event, always possible for a person to nominate his or her next of kin, naming whomever he or she chooses to name; there is no need for this person to be a relative, or even a cohabitant. Most NHS trusts ask the patient to nominate next of kin formally, but obviously cannot do so if the patient is unconscious; a next of kin card can be downloaded from the relevant government website. As with all the issues surrounding cohabitation, it is best to make a nomination of next of kin before there is any need to do so. This can avoid potentially distressing and unpleasant disputes at the bedside of a patient whose condition is so serious that he or she cannot make his or her own wishes clear, about who should be treated as being ‘closest’ to the patient.

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Housing

For most couples, the family home, or homes, will be one of the more important assets. When the relationship is over, each cohabitant will need to find out how much of the property, if any, they own, and will have to decide where they are going to live now that they are no longer going to live together.

Sole Ownership

If the couple live in a property which is owned by only one of them, the non-owner is usually entitled to nothing — the non-owner cannot claim a share of the property simply because they have been living there for a long time. There are some ways for people who are neither married nor civil partners to acquire rights in property that legally belongs to their cohabitant, but it is very difficult to establish such rights, which arise only in unusual circumstances (see Trusts and other special property rights below).

The non-owner is protected from simply being thrown out on the streets, and may even, in some circumstances, and for a limited time, be allowed to occupy the property to the exclusion of the owner, if, for example, there have been threats or violence. In the end however, if the owner wants their former partner to leave the home, eventually the former partner will almost certainly be required to leave without receiving any form of compensation.

Property owned by more than one person

Many people purchasing a house together, married or unmarried, buy it in joint names. A property bought in joint names is assumed, until the contrary is proved, to be owned equally by the couple, as ‘joint tenants’. For most cohabitants who own a property jointly the straightforward answer to the question ‘who owns what?’ is that on separation each person takes half of the equity in the home, and if one of them dies, the survivor inherits the whole property. The decision as to where each of them is going to live after separation is likely to pose more problems. Either person can force a sale of the property to make sure that they receive their half, but with only half the value of the current home to invest in a new one, finding somewhere new to live is likely to involve making some difficult decisions.

It is possible, of course, to purchase a property together without sharing it equally. Couples can, instead, explicitly state that each person owns a particular share, usually on the simple basis of how much each person contributed to the purchase price; this arrangement is known as a “tenancy-in-common”. The different share of the property owned by each person should be set out in a properly drawn up legal document, called a ‘declaration of trust’. If the couple then separate, they will each be entitled to their specific share of the property and if one of them dies, the other does not automatically inherit the other person’s share, which can be left by will or under the rules of intestacy to someone else.

It is a simple matter to convert a joint tenancy into a tenancy-in-common with shares of equal size – either person can simply write to the other saying that they wish, from now on, to hold the property as tenants-in-common, which the result that the property will not automatically be inherited by the survivor, but can be left to other people.

Trusts and other special property rights

In some very unusual cases it may be possible to persuade the court that even though a property appears to be owned equally by joint owners, and there is no “declaration of trust”, in fact one person is entitled to more than half of the property. It may even be possible, in equally unusual cases, to persuade a court that although a property appears to be owned only by one person, in fact the owner holds all or part of the property ‘on trust’ for someone else, such as a cohabitant. When someone claims that the legal ownership does not reflect the real situation, the main issue for the court is working out what the parties’ shared intentions were, and if the couple did not make an explicit statement at any stage as to what they both intended, then the court will look at the whole course of the couple’s conduct in relation to the property. Contributions to the purchase price are generally the most important consideration, although they are not the only factor taken into account by the court.

It is also sometimes possible to claim some sort of financial compensation for work on a property a person has been living in, providing that the work added to the real value of the property, and people are sometimes entitled to live in a property which they do not own because their former partner promised them that they would be able to stay there, and they gave something up, for example the right to live somewhere else, in reliance on that promise.

However, in general it is expensive and time-consuming to pursue this sort of claim, and successful claims are relatively rare. So, both a couple buying a house in joint names who do not expect simply to share the property equally and a person who believes that, although he or she is not named as one of the legal owners of the property, for some reason he or she is entitled to a share in a property, should make sure that a clear statement of the true legal position is agreed with anyone else with an interest in the property, preferably using a “declaration of trust”. Many people find that when mutual trust breaks down, it breaks down in every respect, and that what may have seemed obvious and fair while the relationship lasted, is called into question when the relationship ends.

Some special rights to property can also be acquired if the couple are engaged to be married, or have agreed to enter into a civil partnership. A person who changes his or her mind about getting married or about becoming a civil partner cannot be forced to marry or to register the partnership, but if the couple separate, some different rules about property ownership may apply in relation to the ‘engagement’ period.

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Possessions

In respect of other assets, large and small, the person who paid for the item is normally the owner, and their former partner will not have any claim to it, unless he or she can establish that the item was given to him or her as a present. Property bought from money in a joint account will be owned jointly.

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Maintenance

After any property has been divided up, the couple are expected to go their separate ways, without any further financial assistance from one another. Cohabitants cannot claim maintenance from a former partner. On divorce or dissolution of a civil partnership the courts will consider the “contribution” made to the relationship in every sense, and the contribution a person made by providing emotional support, or by establishing a family home, will be relevant to the division of the assets and it may also be appropriate for one former spouse or civil partner to pay maintenance to the other following the divorce or dissolution. However, currently the only contribution which matters when a cohabiting couple separate is the specific financial contribution each person has made - which is reflected only in the capital that they take away with them. Cohabitants have no right to maintenance under the existing law.

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Children

The rules are different if there are children, because, although the couple are still treated as unrelated individuals with no responsibilities towards one another, the law recognises the responsibility of both parents to the children. Depending on the circumstances, one parent may be able to claim maintenance, a lump sum or property rights against the other, but only on behalf of the child, not in their own right. The parent who is not living with the child (the non-resident parent) may be required to pay child support via the Child Support Agency.

The responsibility of both parents to house their child is particularly important. Between them, the couple will have to work out where the child is going to live, and the parent who is given the day-to-day responsibility for looking after the child may end up living in a home provided by their former partner. However, because the person who has provided the home has no responsibility to house adult children or to house the parent with care of the children, the provider of the home can reclaim the property once the child becomes an adult and ceases full time education.

Unmarried couples with children should give particular thought to making wills, and to making provision for guardianship of the children in the event of the death of one or both parents.

Both parents should be aware that unmarried fathers do not automatically acquire parental responsibility for the child, although they always share financial responsibility for the child with the mother, and are normally entitled to contact with the child. Parental responsibility involves legal recognition of the parent’s right to be involved in making decisions about the child. Unmarried fathers can acquire parental responsibility in one of three ways: (i) by being included on the birth register, or (ii) through a written agreement in an official form between the mother and father, or (iii) by obtaining a parental responsibility order from the court. An unmarried father can be included on the birth register if he is present at the registration and signs the register, or, in his absence, if he fills in a statutory declaration acknowledging that he is the father, and this is given to the registrar, or if a copy of the written parental responsibility agreement is presented at the register office. An unmarried father may register the birth of the child without the mother present but only if she has made a statutory declaration acknowledging him as the father, or he brings with him a copy of the written parental responsibility agreement. An unmarried father may have his details included at a later date by re-registering the birth.

If separated parents, married or unmarried, are unable to agree arrangements for residence of and contact with the child, the court may be asked to intervene. Only in exceptional circumstances will the court refuse to allow any contact between the child and the non-resident parent, regardless of marital status.

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Inheritance and pension rights

Cohabiting partners are at an obvious disadvantage when it comes to inheriting the property of a deceased partner. There are no presumptions that a person who died without making a will wished to leave their property to the person they were living with, so cohabiting partners who wish to leave each other their property in the event of their death must make a will. Even if they do so, they will be disadvantaged by comparison with a married couple or civil partners, because, unlike a married or civil partner, a surviving unmarried partner has to pay inheritance tax on any property which is left to them by the partner who has died, at the rate of 40 per cent on everything above the personal threshold.

Cohabitants should also review the details of their pension provision. Employers who give pensions or death-in-service payments to spouses often do not recognise partners who live together, although a few pension companies have shown flexibility in this respect. Cohabiting partners have no rights under the state pension system, and occupational and personal pension schemes usually allow a survivor’s pension to be paid to a surviving unmarried partner only if the survivor was financially dependent on the pension scheme member, whereas surviving married partners can qualify without financial dependence. The best protection is for cohabitants to name each other as the person to benefit from any relevant policy.

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Protecting yourself

There is nothing to stop any couple from entering into a legally binding agreement to share their assets in a particular way - and every cohabiting couple should think about whether they need such an agreement, especially if they have children. A properly prepared cohabitation agreement may be enforceable by the courts, and could include provision for maintenance following separation, as well as dealing with division of the assets at the time of the separation. Every couple buying a property jointly should consider very carefully and agree, before the purchase is completed, how they would wish the proceeds of sale of the property to be divided if the relationship ended. They should then take legal advice about how best to give effect to this agreement through the drawing up of the necessary documentation. Every cohabiting couple should also make wills, particularly if there are children. It is also a good idea to nominate next of kin. It is recommended that people who share their lives without marrying or registering a civil partnership seek legal advice as to how best to protect themselves in the event of death or separation.

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Law Commission paper

In July 2007 the Law Commission published a report on cohabitation and the financial consequences of relationship breakdown, recommending that legislation be introduced to enable couples who have a child together, or who have lived together for a specified number of years (the suggestion was something between 2 and 5 years) to obtain financial relief in certain circumstances. The Commission rejected an ‘opt-in’ scheme, proposing instead that couples would be able to ‘opt out’ of the scheme by means of an agreement, leaving them free to make their own financial arrangements. In order to obtain financial relief, applicants would have to demonstrate not only that they were part of an eligible couple, and that they had not opted out of the scheme, but also that they had made “qualifying contributions to the parties’ relationship, giving rise to certain enduring consequences at the point of separation.” In other words, the applicants would have to show that the relationship had had an economic impact on them, as individuals. This would still be very different to the financial relief available on divorce, as simply cohabiting, for however long, would not give rise to any presumed right to a share in any pool of property, and the scheme would not make awards on the basis of a party’s needs following separation. Each applicant would have to show that his or her former partner had retained a benefit, or that the applicant had a continuing economic disadvantage, as a result of contributions made to the relationship by the applicant, and the size of the award would depend on the extent of the retained benefit or the continuing economic disadvantage. In March 2008 the government sent an interim response to the Law Commission, which noted that the Commission’s report on this issue was very thorough and of a very high quality, but which went on to announce that the government was postponing a decision on the report, so that it could consider the impact in Scotland of Scottish legislation on this issue.

The pressure for reform in this area of the law is mounting, but may be difficult to achieve, and reform will, in any event, take some time. In the meantime, as the Law Commissioner for England and Wales noted some years ago: “Far too many unmarried couples still believe that they come under the protective wing of ‘common law marriage’”.

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