Let’s cohabit. Admittedly, it’s an invitation that lacks the exuberance of the Proclaimers’ ‘Let’s get married!’ but it’s undeniably an option that more of us are choosing. The fastest-growing type of family in the UK is the cohabiting couple, growing by nearly 26% over 2008-2018 and the graph appears to be following an ineluctably upward trend.

The advantages seem obvious: a couple  decides to live in a committed relationship without the cost – or formalities – of a wedding. If, however, that relationship ends in separation with children and financial issues involved, what are the potential consequences?

Nina Taylor, a specialist in family law at Lindsays agrees that increasingly people are deciding to live together with no intention of marrying – but that there is a lack of awareness about the differences between marriage and cohabitation in the event they do choose to separate.

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Know your rights

“Many assume that they will have the same rights as a spouse or someone in a civil partnership. However, at the end of a relationship, there are far fewer options for a cohabitating partner to claim a financial settlement from their former partner. A spouse may be entitled to settlements such as maintenance payments, or a share of a pension or transfer of an interest in a house – whereas the only option available to cohabitees is a claim for a capital sum to compensate them for economic disadvantage suffered, and only then if their former partner had a corresponding economic advantage, payable in full or in installments.”

The rights of cohabiting partners were established by the Family Law (Scotland) Act of 2006, when the archaic ‘marriage with cohabitation and repute’ was abolished but these, says Taylor, are not as far reaching or clear cut as for a married couple going through a divorce.

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“The 2006 legislation was intended to give cohabitees some rights and obligations but there is a train of thought that it might not be working as well as it could be because it is not as specific as the matrimonial legislation. It refers to economic advantages and disadvantages, which are open to debate and problematic to quantify.

“People don’t tend to enter into relationships primarily thinking of it being an accounting exercise setting out, for instance, differing contributions to the value of a property or who is working more hours than the other, so it can be very difficult to determine who is at advantage and who at disadvantage – and in order to raise a court action you have to produce vouching (proved by documentation and or valuation) which may not have been retained if it is a long relationship.

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Early measures

She believes that it’s extremely useful for couples to have a financial conversation at the beginning of a relationship, at a time when they are on good terms, enabling them to make sensible, fair decisions about what might happen in the event of separation – and not to have to start these discussions when things have perhaps become acrimonious.

A cohabitation agreement, a document that is legally binding, can be prepared that effectively deals with issues arising relating to property on separation – essentially a pre-nuptial agreement for couples who are not married.

It can set out what each partner is entitled to if they split – which is especially important if partners are buying property or going into business together and it should also anticipate arrangements for changes such as having children.

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The available options

There are several sound reasons for making such an agreement says Taylor. “Many people are genuinely surprised that some of their assumptions are not founded in fact. For example, one of the parties might think they are entitled to the return of a higher sum paid towards a jointly owned house. Or they may well be unaware that while there is provision for child maintenance there is no equivalent of spousal maintenance for cohabitants.”

An agreement, Taylor adds, can be a very simple one: “It can just be a co-purchasing agreement that regulates one aspect of the relationship and frequently that relates solely to the sale of a house when a couple have contributed deposits that are not equal – one partner may have put in £50,000 and one £10,000 and each wants to make sure that they get back what they put in. Or it can be more complex and cover other financial aspects ”.

However, she says Lindsays offers its clients a range of bespoke options that can cover a comprehensive range of individual circumstances.

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“We ask if there are any other aspects of their financial relationship that they feel they should regulate in order to give them more certainty in the event of a future separation. For example, if the house is jointly owned, should one person have the right to stay in it and buy out the other party and what should that mechanism be to value that interest? And should there be any agreement in respect of maintenance or the children’s school fees – or if there is a joint bank account, what happens to that in the event of separation?

It’s very important, she says, that people in these circumstances understand what rights they have … and what rights they may be giving up if they enter into a cohabitation agreement and what it means for them in the future.

“You can make it very much an agreement that is tailored to suit your own circumstances which will avoid acrimony, expense and potentially litigation further down the track.”

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Nina Taylor, Family Law Partner at Lindsays, has over 25 years’ experience and is accredited by the Law Society of Scotland as a specialist in child law and in family law. She is also a member of the Family Law Association and Consensus Scotland, and is trained in collaborative practice.

Nina has extensive experience of advocacy in the Sheriff Court having personally conducted a large number of family court hearings including multi day proofs. She advises on all contracts relating to marriage and cohabitation, including Pre and Post Nuptial Agreements, Cohabitation Agreements and Separation Agreements.

Nina will be happy to advise you on the best options for your particular circumstances. If you would like to get in touch with Nina, please call her on 0131 656 5788 or email ninataylor@lindsays.co.uk

Lindsays is a Scottish firm of experienced lawyers who can provide expert, accessible and reliable legal advice for people and businesses. We support our clients at every stage of their journey through life in areas related to their family, work, property, business interests and retirement, and with any other issues that may crop up along the way.

Contact details for Nina Taylor

T: 0131 656 5788

E: ninataylor@lindsays.co.uk