Cohabitation and separation, is everything about to change?Pepperells
In a world where cohabitation is the norm for the majority of couples, it may surprise you to know that common law marriage does not exist. Subsequently, the routes for financial remedy available to cohabiting couples on separation drastically differ to those which are available to couples upon divorce. However, this could be set to change. On 15th March 2019 The Cohabitation Rights Bill had its second reading in the House of Lords and has been committed to a Committee of the Whole House. Whilst this is positive news for cohabitees, The Cohabitation Rights Bill is still in its infancy and ultimately has a long way to go before it may become an Act of Parliament.
The Cohabitation Rights Bill recognises this inequality and, whilst the bill would not give the same level of relief available to couples on divorce, as Lord Marks stated, it will ‘enable courts…to adjust the financial position of qualifying cohabitants on relationship breakdown, so as to spread the financial consequences, benefits and costs fairly between them’. Essentially, a form of financial settlement similar to that available to divorcees and facilitated by the Courts will be available to cohabitees on separation, in the event that this bill is passed.
Nonetheless, unless the Bill is amended at a later stage, cohabitees will only benefit from the Bill if they fit the relatively restrictive definition of a Cohabitant. In order to satisfy the definition of a Cohabitant, it will be necessary to show that you live together as a couple and are:
- Treated in law as being mother, father or parent of a minor child; or
- Able to show that there is a joint residence order (for the avoidance of doubt, this is known as a Child Arrangements Order) in favour of either cohabitant in respect of a minor child stipulating where that child shall live or how that child will spend time with either cohabitant; or
- Are the natural parents of child in the womb at the date when you cease to live together; or
- Able to show that you have lived together as a couple for a continuous period of three years of more.
This would mean that any couples who have not lived together for a continuous period of at least three years and do not have a child will not satisfy the definition of Cohabitant and will therefore be unable to benefit from the Bill, in the event that it is passed in its current form.
Despite these welcomed and potentially upcoming changes to the law surrounding cohabitees, cohabitees currently have almost no legal protection and must rely on the law of equity upon separation if no financial agreement can be reached, which, as stated by Lord Marks, ‘depends on outdated and unwieldly trusts law’. Pursuing a financial settlement in this way can therefore be costly and time consuming. Furthermore, there is little certainty as to what the Courts will decide the party’s shares should be in any financial settlement.
Nevertheless, there are steps which can be taken by Cohabitees now to avoid uncertainty in the event of separation, such as a Cohabitation Agreement or Separation Agreement which provides for the division of assets upon separation.
At Pepperells our experienced family department are on hand to assist and advise you in relation to Cohabitation and Separation Agreements and all other aspects of family law.