This article was originally published on leading sports law website LawInSport in July 2022.
Tammy Knox, Laura Hunter Watkins and Hannah Hayward, family law specialists at Penningtons Manches Cooper, have prepared a series of articles highlighting the key considerations in family law that may arise for athletes in England and Wales. This series is aimed at lawyers and non-lawyers and attempts to provide a helpful introduction to family law in this jurisdiction. It will cover, in turn, the following key topics:
- The legal position of unmarried couples upon separation (below).
- The importance of pre and post nuptial agreements.
- Financial provision and division of the assets upon divorce.
- The legal position regarding the arrangements for children post separation.
- Examples of issues of parental disputes and what to do about them.
Family law in England and Wales is complex. As such, it is always advisable to take specialist legal advice early on in the event of entering into a new relationship, or when considering leaving an existing one.
This first article explores the key issues facing unmarried couples upon separation (particularly those living together), and answers the following questions:
- What claims are available to an unmarried couple if they are to separate?
- How can I protect my property if I live with my partner?
- How does property law protect me in a relationship breakdown?
- What claims can be made on behalf of children?
The article focuses on English law and is relevant to athletes from any jurisdiction now living in England and Wales. At the outset, please note that claims on behalf of unmarried couples are often complex and depend on your specific circumstances. This is why getting advice from a family law specialist at an early stage of a relationship is a good idea to protect you financially in the case of a relationship breakdown.
What claims are available to an unmarried couple on separation?
Despite what most people think, there is no such thing as a 'common law marriage' in England and Wales1. The reality is quite the opposite; cohabitants have very limited legal and financial protection compared to married couples, regardless of how long they have lived with each other.
If you are not married or in a civil partnership, your financial claims upon a relationship breakdown are limited to:
- claims under property law; and/or
- claims on behalf of any children of the family.
This is the case even if you have lived with your partner for five, fifteen or even fifty plus years.
By way of comparison, financial claims for couples who are married or in a civil partnership are wide ranging and the starting point is that capital and income built up during a marriage should be shared equally2 (what happens to assets and income following divorce or dissolution is explored in the third article in this series).
It is also important to note that if you decide to marry after a period of seamless cohabitation (i.e. no breaks), despite that period of cohabitation alone not giving rise to a financial claim in itself, it will be added to the length of your marriage . This is important because one of the factors that a court will take into account, when looking at division of the assets on divorce, is the length of a marriage. This is something worth bearing in mind for the cohabiting couple who may plan to marry in the future.
How do I protect my assets if I live with my partner?
There is actually no legal definition of cohabitation or living together, but this is generally taken to mean living with your partner exclusively. This need not be in one property, which is particularly important for athletes to note, who may travel frequently to compete (whether staying in hotels or in second or third homes).
Moving in with a partner is an exciting time. However, while finances are usually discussed in terms of plans and affordability, financial arrangements in the case of a break-up tend not to be discussed for obvious reasons.
However uncomfortable it may seem, sportspersons would be well advised to enter into a 'cohabitation agreement' if their partner moves into their property. A cohabitation agreement records the rights, responsibilities and financial arrangements between you and your partner, and what should happen if you later decide that you no longer want to live together. This simple document, which can include any and all assets that you own, provides you with certainty in respect of your finances, and also eases and simplifies the process if your relationship breaks down. Even though, as noted above, the law offers limited protection to unmarried couples, this does not mean disputes over assets don’t occur; in fact, they are relatively commonplace and hence the importance of a cohabitation agreement.
How does property law protect me in a relationship breakdown?
While most assets and investments can be effectively covered under the terms of a cohabitation agreement, property purchases need additional specific consideration because of the legal regime in England & Wales and specifically the terms of the Law of Property Act 1925.
If you are considering buying a property, our advice is to buy the asset in your sole name. This is because there is an assumption that the beneficial ownership of the property reflects the legal ownership: so the starting point is that you will be entitled to 100% of the proceeds of any sale.3
However, if you do decide to buy a property together, and particularly if you make unequal financial contributions, then additional steps need to be taken. This is because the starting point under the law is that a property held in joint names is owned completely by both people, even if they contributed unequal amounts (a 'joint tenancy').4 This means the proceeds of any sale will be split 50:50, even if you contributed 90% of the purchase price. 5 It also means your partner will be entitled to 100% of the property were you to die.
To avoid this presumption, our advice is to make sure you split the ownership of the property into distinct ‘legal shares’ ('tenants in common')6. This can be simply expressed (on the transfer deed which is lodged with HM Land Registry when a property is purchased) as a percentage based on your initial contributions to the purchase price or contributions to the property. However, to ensure that there can be no dispute about what was intended for the future, it is advisable for the parties to also enter into a simple trust deed, at the same time to define each parties’ contribution and their beneficial ownership (i.e. the percentage of any proceeds of sale – e.g. 90:10).
What claims can be made on behalf of children?
Both parents have legal obligations towards their children until they reach 18 years of age or complete full time secondary or tertiary education, regardless of whether they are married or not.
Case law has established that a child is entitled to be brought up by both parents with a standard of living that bears some resemblance to the lifestyle that they are accustomed to (or that the wealthier parent can offer).7 As an unmarried parent, it is possible to apply to the court for financial provision from a child’s other parent on their behalf. This is known as a 'Schedule 1' claim as it is available under Schedule 1 to the Children Act8. This can include:
- A lump sum(s) for expenses relating to the child(ren) such as to purchase a car, furnish a nursery/bedroom or pay for school fees.
- The transfer of a property into trust for the benefit of a child(ren). An unmarried person is then able to live in the property (rent free) until their child(ren) turn 18 (or complete secondary/tertiary education). Properties are usually then transferred back to the parent who bought the property.
- Maintenance payments to meet the child(ren)’s everyday needs. This payment would cover clothing, medical / dental expenses, transport and the child(ren)’s share of utilities, groceries etc.
- If the paying parent’s income is lower than £156,000 (gross) per annum, maintenance is dealt with by the Child Maintenance Service (CMS). The CMS calculates the maintenance to be paid based on income and the nights that the child spends with each parent. If the paying parent’s income is above this threshold, the family courts have the power to make maintenance orders. This is often referred to as 'top up' maintenance and can result in very generous child maintenance awards being made.
- While the unmarried parent does not have an entitlement to regular payments in their own right, maintenance on behalf of a child(ren) can include a 'carer’s allowance', which can be generously interpreted. The purpose of this is to recognise the responsibility and sacrifice of the primary carer, for example if they have stepped back from their own career. However, as this is an allowance, rather than maintenance per se, this should not include funds “to put money away for a rainy day”,9 so as not to allow the carer to build up savings from the allowance.
- The paying parent who comes under the jurisdiction of the family court should be aware that they will also be expected to meet the other parent’s legal fees (associated with bringing the application) if that parent does not have sufficient means to meet those costs themselves.
Every relationship, and therefore the facts of each case, are different. Please always seek legal advice if you are uncertain about any of the points above. Affairs of the heart are notoriously difficult to control, but their financial implications can, to some extent, be mitigated with forethought and specialist legal advice.