This article was originally published in FTAdviser, and can be accessed here.
It is official. Following the government’s recent announcement, lovers, single adults living alone or with children under the age 18, who have been kept apart by lockdown would be able to reunite and spend time together again in support bubbles (as long as they are in England).
The government’s advice at the beginning of lockdown had been that in the face of Covid-19, couples, “should test the strength of their relationship” and move in together or remain apart for the duration of the lockdown. This was a big decision for those in relationships, especially for those who would otherwise be living alone. Whatever the circumstances, now is a good time for couples to put aside some time to reflect and consider their options and the legal implications of living together.
So, what happens if things have gone well and the impulsive decision to fast track your relationship becomes a permanent arrangement or you decide that you can no longer face living apart?
It is a common misconception that if couples have a child and/or live together they have acquired the same legal rights as those who are married. Unfortunately, unmarried couples have no claims on each other’s property save under general contract and property law, or on death if they qualify under certain statutory provisions. This reinforces the frequently held myth that if a couple live together for a certain length of time, they then acquire the legal status of a married couple, a “common law marriage”. In England and Wales, (different provisions apply in Scotland) it is only when a couple marry that they assume financial obligations to each other. Most significantly it is only marriage that empowers a court to make orders redistributing their assets and for the payment of maintenance in the event that they subsequently separate. Parents will, however, have financial obligations towards their children irrespective of their marital status.
As family lawyers, we all too often experience how difficult it is for unmarried clients to come to terms with the fact that in the eyes of the law they are not entitled to any financial support. However, one way a claim can be made, albeit indirectly, is by a claim for financial provision for any child of the relationship. This may also result in the right to occupy property necessary for the support of the child.
Financial provision for children
Where children spend the majority of their time with one parent, that parent will be able to seek child maintenance from the other through the Child Maintenance Service (CMS). The CMS applies a set formula depending on the level of the non-resident parent’s income, the number of children involved, and how much time they spend with each of their parents. The CMS formula does not take into account any income over £156,000 gross per annum, but an application can be made to the court to “top up” child maintenance where the non-resident parent’s income is in excess of this amount. Child maintenance is payable until the child is 16 or leaves secondary education, whichever is the later. Parents are also free to agree maintenance arrangements between themselves.
Under Schedule 1 of the Children Act 1989, parents may be ordered to make capital provision for the benefit of their children. This could take the form of a lump sum payment, or a transfer or settlement of property in favour of a child. Importantly, these are not payments in favour of a former unmarried partner. Any decision is at the court’s discretion, but it will be guided by the six-point checklist set out in the 1989 Act. The key elements that tend to be most relevant in these cases are the financial resources and the needs of the parties and the child, both now and in the foreseeable future, whether the child has a disability, the manner in which the child was being or was expected to be educated or trained.
In the current financial climate, a common question is whether a reduction in the paying parent’s income would justify them reducing their child maintenance payments. If maintenance is being paid through the CMS, they reassess maintenance annually or if income has changed by more than 25%. Otherwise, the existing calculation must continue to be paid.
If you are paying child maintenance under a court order, you can apply to a court to reduce your maintenance obligations or agree a variation with the other party. It would, however, be prudent to take legal advice before embarking on such an application and, if possible, to try to reach a temporary solution by agreement together. However, it is important that any agreement is recorded in writing, so that it can be converted into a court order if necessary.
If unmarried separating parties jointly own, or have both financially contributed to a property, then the court will be able to determine their respective interests in that property. However, those interests, are determined by the laws of property ownership, which are restrictive. This is different from the position if the couple are married.
Property claims for unmarried couples are determined under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA). This is like any other dispute between the co-owners of property. The Act deals with agreements about the ownership of property. This is a complex area of the law with agreements being express, implied or deemed under the law relating to trusts by the court – it is therefore essential that specialist legal advice is obtained.
If, at the beginning of lockdown, you moved into your partner’s property, or alternatively they moved into your property, you may have had little or no time to plan how your cohabitation might work in practice. Often, before taking the step of deciding to live together, couples will consider the implications of the relationship, and will discuss their financial intentions. You may not have done this in the rush to reunite after the end of lockdown, but it is not too late. It is important to have regard to the following principles. Establishing a common intention to share ownership of a property can have significant legal implications – especially if the person relying on the promise is giving up their own property, or the belief that their partner has agreed to share their property. It is therefore important not to make promises that are not intended to be kept, as establishing common intention to share ownership of a property can have significant legal implications.
If a TOLATA claim is successful, it will result in a division of property according to each individual’s financial contribution to the purchase or ongoing upkeep of a property, or as otherwise provided in a legally binding agreement. This is quite different from the position for married couples, where the overarching principle the court will apply is a fair financial outcome with reference to the ‘yardstick of equality’. This is regardless of whether the parties have contributed financially or contributed in other ways e.g. caring for the children of any marriage to enable the other spouse to earn an income. The idea is that there should only be a departure from the 50/50 division of matrimonial assets if there is a good reason for doing so.
Although any potential interest in property will not be automatically acquired if you are not married, it is prudent to consider how cohabitation may affect you financially in the long term if you later separate. In order to avoid future disputes about the extent of each party’s interest in a property, unmarried partners can enter into an express declaration of trust setting out each of their interests. Alternatively, if there is no agreement, then in the event of a future dispute, it will be helpful if the parties have documented their financial contributions and agreed whether they will share the cost of the mortgage; bills; and contributions to any other costs.
One way of formalising the terms of such an understanding is to enter into a Cohabitation Agreement. A Cohabitation Agreement is a document which sets out how a couple’s assets will be handled during a relationship and in the event that the relationship breaks down. A Cohabitation Agreement will be legally binding as long as both parties can prove that they did not enter into it under fraud or duress, nor as the result of the parties operating under a mistake as to their intentions (a legal argument in contractual claims). This is very different from a Pre-Nuptial agreement which applies only to married couples and which imposes stringent conditions to be complied with to be valid. The effect of a Cohabitation Agreement is a matter to be decided by the court exercising its discretion.
Although there is no denying that amid the giddiness of setting up a home together questions over home ownership may be thought unromantic, it is important to think practically to ensure both parties are properly protected, should separation result. Above all else, it is always sensible to take legal advice at this point to ensure there are no unpleasant surprises in years to come
 White v White  FLR 98 1