Unlike married couples, the law for unmarried couples is very limited in the protection it offers and the idea of a ‘common law’ marriage is just a myth. This may come as a surprise to many but when a relationship comes to an end this can leave parties in a vulnerable position and a state of limbo. Despite this, over 3.5 million people live together without getting married or entering a civil partnership.
Although these issues are not new, there is clearly a case for change and in June of this year the Government launched a consultation paper looking to reform what happens when relationships end. The paper entitled “A fairer end to relationships” brings together three areas of reform: (i) reforming the law of financial remedies on divorce and dissolution (ii) reforming the law for cohabitants on separation and (iii) reforming the law for cohabitants on intestacy.
The aim is to provide a statutory framework that gives more rights to cohabiting couples than is currently the case.
The Position of Cohabitees on Separation
At present, where a dispute arises between unmarried couples, property disputes have long been resolved as claims under the Trusts of Land and Appointment of Trustees Act 1996 “(the Act”). The Act gives the Court the power to resolve property disputes between parties and is a useful tool for separating couples. It is beyond the scope of this article to delve into the intricacies of the Act but, under it, the Court can decide the extent of a party’s beneficial interest in property and order, if appropriate, the sale of the property.
Under the proposals now announced by the government, for qualifying cohabitees, there would be a new framework available. The framework would operate on an ‘opt out’ basis and it would automatically apply to those in a committed relationship who have lived together for at least three years or who live together and share a child.
Under the framework the Court would begin from the position that each person keeps what they legally own and a departure from this would then be on a “needs” basis. The idea behind a “needs” approach is that it will achieve a fair outcome for children.
Under the proposal discretionary needs would be excluded from the Court’s assessment so this would mean that the Court is not to take account of needs for comfort like luxury items or private club memberships.
The government proposes that the limitation period for bringing a financial claim under this framework would be two years after the relationship has ended.
For those who do not meet the criteria (or who perhaps opt out or do not bring a claim in time) the Act would still be available.
Inheritance
The consultation is also proposing reforming the rights of cohabitants on intestacy.
Currently, cohabitants have no entitlement to their partner’s estate if their partner dies without a Will (i.e. intestate). If their partner dies without leaving a Will the distribution of the estate is governed by the intestacy rules which priorities blood relatives and means that the surviving partner receives nothing.
There is remedy available in the form of a claim for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975 but these claims are far from certain and litigation can be expensive.
In view of this and the way people live their lives today the government is proposing that rights upon intestacy are extended to qualifying cohabitants so they received the same rights to inherit as a spouse in terms of amount and order of entitlement.
The Future
Whilst these intended reforms may not be new, they will, for many, be welcomed and will be seen as bringing about a system that it fairer and more reflective of the way many people now choose to live.
Mr Palmer and Mr Green of the Wills and Estate Team welcome the consultation but, at present, the proposals are not law and the consultation should not be seen as a reason to neglect proper estate planning.
The consultation does not address inheritance tax and it would be unwise to think that, if these reforms did go ahead, they provides an adequate safety blanket and there is no need for proper estate planning. The devil will be in the details and there will, no doubt, still be disputes over whether parties qualify under the proposed framework and what, for example, a “need” is when cohabitees separate.
Whilst proper estate planning cannot entirely extinguish the potential for disputes there is no substitute for it. The very fact that it has been necessary for the government to launch this consultation highlights the change in modern living practices and how complex the family structure has become. Even more than ever, estate planning is now crucial.
The consultation will now run until 14th August 2026 and Colman Coyle will be following the consultation with interest.
How We Can Help
If you are looking for assistance with estate planning and wish to ensure your loved one and your assets are protected you should not hesitate in reaching out to Mr Patrick Green at patrick.green@colmancoyle.com. Alternatively, if you find yourself involved in a dispute and require advice you should not hesitate in reaching out to Mr Adam Palmer at adam.palmer@colmancoyle.com.
