The law for the separation of assets and income for cohabiting or unmarried couples in England and Wales is much misunderstood. There is a widely held view that the longer the relationship lasted the greater the entitlement to assets and income, which is not true. Also, that in a “common law marriage” a “common law partner” can benefit from the standard divorce claims on separation. This also is not the case.
Despite plans to reform the law, such cases are still dealt with under strict property law and the law of trusts – under the Trust of Land and Appointment of Trustees Act 1996 (also known as TLATA or TOLATA). There is the added complication of possible claims for children under the Children Act 1989, and Child Support Agency/Child Maintenance Service.
Generally, the settlements are beneficial to the property owning party. There is no ability to award lump sums, transfer property or share pensions. There is also no provision for the equivalent of spousal maintenance. However parents caring for children may have a claim for capital to purchase a property whilst the children grow up.
We are able to advise you as to the consequences of your separation, which are often very different from the settlement you would have achieved if you had been married, or in certain circumstances engaged.
We also have the necessary expertise in our property, litigation and tax teams to deal with the specific issues that frequently arise in such cases. The tax implications are often ignored and can be expensive to rectify.
We also can give advice on a cohabitation agreement at the outset of such a relationship or during it as to the best way to protect your assets and income if you subsequently separate.
The cohabitation agreement brings certainty in this complex and unreliable area of the law. For example, one party may consider that they have significantly contributed financially to the property they live in with their partner and so the property is shared, even though it is in their partner’s sole name. The property owner may consider financial contributions to be nothing more than fair contributions to daily living costs and running that property. Alternatively a non-owning party may have been promised an interest in property which was not documented and is therefore difficult to prove.
Joint property can be owned as joint tenants where both parties own the whole property together or tenants in common, where each party owns a distinct share either in equal or unequal shares (eg 70:30). Often the division of property at the time of purchase may not be the intended division if the property had to be sold and divided. For example, if one party paid the deposit and the other pays the mortgage then what shares should they get? Again, this can be a great source of uncertainty.
All of these scenarios are common problems, but they can be clarified with an agreement that clearly sets out each party’s intentions.
Contact our family law team
If you need legal advice about any issue relating to cohabitation, contact our family law solicitors.
Call us now on 0800 422 0123 or contact us online.