MLegg

Last updated 00:00, Friday, 21 December 2007

It is two years this month since the Civil Partnership Act 2004 came into force. The Act allowed same-sex couples forming a civil partnership a package of legal rights and responsibilities reflecting those available to married couples.

The legal and financial situation following the break-up of a civil partnership or marriage is well established, but what about unmarried (or non civil partnership) couples?

The Law Commission recently published a report entitled Cohabitation: the financial consequences of relationship breakdown. This contains several recommendations for reform of the present law.

However, one surprising fact detailed in the report is that in 2006 the majority of people believed that the law of England and Wales recognises cohabitants as “common law spouses” once they have lived together for some time.

They are under the impression that the rights of such people are similar or equal to those who are married or in a registered civil partnership.

“Common law spouses” do not exist in the eyes of the law and are treated as individuals with no rights or liabilities to each other if the relationship ends.

This can have far-reaching consequences in many areas including the biggest asset, the house.

Unmarried couples have no basic rights to their partner's property or to maintenance if they split up. What is his is his, what is hers is hers, and what is jointly-owned needs to be divided.

If a house is bought in joint names then it should be split accordingly on separation. Either party can force a sale of the property to realise their share.

If the parties are contributing unequally to the purchase price, or to payments on the property, then this should be reflected by being designated as tenants-in-common and holding unequal shareholdings (say 70 per cent and 30 per cent), rather than the equal shareholdings of beneficial joint tenants.

If the property is in the sole name of one party then it remains that person's property on separation, unless the other party can establish that there was a common intention that they would be entitled to a share in the property.

Another problematical area is pensions. On divorce or the dissolution of a civil partnership the courts will normally include the pension fund of either party as part of any settlement which could mean that a non-working spouse would be compensated for giving up their career to raise a family. This does not apply to cohabiting couples.

On the death of an unmarried partner the survivor has no automatic right to receive a share of their partner’s estate and an up-to-date will clearly stating their intentions is a priority.

This is a complex area and what is clear is that there is a general misunderstanding of the rights of unmarried cohabitants.

Although not a very happy subject for the Christmas period, Gingerbread (an organisation offering advice to lone parents) states that the number of calls to their advice line doubles in the post-Christmas period.

Professional advice taken at the outset of a relationship can help to avoid complicated and expensive legal wrangles should the relationship breakdown.

Contact us at moneymatters@armstrongwatson.co.uk or freephone 0800 195 2161