The structure of families has changed significantly over the last few decades. Whilst couples continue to move in together and have children, fewer are deciding, as Beyonce would say to, ‘put a ring on it’.
According to the Office of National Statistics, cohabiting couples are the fasting growing type of family in the UK. From 2005 to 2015, the number of cohabitating couple families grew by almost 30%. In 2006, the Family Law (Scotland) Act 2006 was introduced which gave cohabitants the right to make financial claims against one another when a relationship breaks down. But exactly what rights do cohabitants have when they go their separate ways? Clients are often surprised to hear that although they may live together ‘as husband and wife’, socialise together, share finances, and possibly even have a child, they don’t have the same rights upon separation as married couples. Here are a few of the main differences:-
Unlike married couples, cohabitants don’t at the end of a relationship have a right to share assets built up during their time together. Each party keeps what they have but might have a claim for compensation for advantage conferred or disadvantage suffered. For a cohabitant to make a financial claim against the other following the breakdown of their relationship, they must prove that they have suffered economic disadvantage as a result of the relationship (either in the interests of their former cohabitant or their child) or that the other has been economically advantaged as a result of the cohabitation. The court must consider the extent to which any economic advantage is offset by economic disadvantages suffered by the cohabitant during the relationship, and vice versa. A cohabitant only has 12 months from the date of separation to raise an action seeking an order for financial provision where the cohabitation ends otherwise than by death and only 6 months to raise an action where the cohabitation ends by death.
Conversely, when a married couple separate, they do expect to share what they have accumulated during the marriage. The matrimonial property is identified, valued and then divided between the parties. The starting point for division is 50:50. There are, however, certain arguments that can be put forward by either party to deviate from an equal division. If a spouse wishes to raise court proceedings regarding the matrimonial finances, this can be done at any point prior to the divorce being granted.
The rules surrounding the occupation of the matrimonial or family home also differ depending on the type of relationship. A cohabitant does not automatically have occupancy rights to a property they do not own, whereas a spouse would have these rights by virtue of being married to the title holder. If title to the property is taken jointly, then regardless of whether the owners are married or not, they are both entitled to live there.
When spouses separate, any pension entitlement they have accrued during the marriage is considered to be ‘matrimonial property’. This is taken into account when calculating the total value of the matrimonial ‘pot’. Under Scots law, it is possible for the court to order, or for the parties to enter into an agreement, providing that a pension is to be shared on divorce as part of an overall settlement. In comparison, cohabitants cannot make a claim on the other’s pension, albeit pension entitlement (or indeed lack thereof) could be argued under the umbrella of ‘economic advantage/disadvantage’ to justify the payment of compensation.
Spouses have an obligation to financially maintain each other whilst they remain married and in some circumstances, post-divorce. There is no such obligation on cohabitants.
Whilst spouses will be equally responsible for any matrimonial debt which has accrued during the marriage, be it in their joint or sole names, cohabitants are responsible only for debt accrued in their sole names. An exception to this would be if a one cohabitant acted as a guarantor or agreed to the debt/loan being taken out in joint names.
If a cohabitating partner dies without leaving a will, the surviving partner will not automatically inherit anything – unless the couple jointly own property and there is a provision in the title to the property giving automatic inheritance rights. Conversely, a married partner would have automatic claims on the deceased’s estate.
A cohabiting couple can end their relationship without involving the court. A married couple, however, need the court to formally grant their divorce, even if they have reached agreement on all financial and child related matters out with the court process.