The Cohabitation Rights Bill is a step closer towards becoming law, after having its second reading in the House of Lords and currently being at committee stage. If passed, it will give greater legal rights to people living together, including if one of them dies.
The bill defines cohabitants as two people of the same or opposite gender who are in a relationship and are living together as a couple but not married or in a civil partnership.
It’s estimated that there are more than 2.8 million cohabiting households in the UK, according to the family law group Resolution, representing a shift away from the traditional family and prompting the need for new legislation.
What does the bill mean for cohabiting couples?
The bill, if it becomes law, will not give cohabiting couples the same legal protections and rights as married couples, but it will provide some basic cover. For example, cohabiting couples that have children, as well as those who do not but have been cohabiting for at least two years, can apply for a Financial Settlement Order in the event of a split. Proof would need to be submitted to support the application, such as one party showing that they were less well off than the other.
In order to make an assessment regarding Financial Settlement Orders, the court will examine the welfare of any children involved. They will also look at the couple’s income and financial assets, take into account both sides’ financial needs and obligations, and see how the parties are conducting themselves. Contributions, whether financial or aiding the wellbeing of any children, to the household will also be important factors for the court in making a decision.
The bill does not provide for long-term commitments from either side and in that respect, it brings about a final resolution in the break-up, where neither party is burdened by ongoing responsibilities. But it does allow for lump-sum payments – where there is seen to be an economic disadvantage on one side – to be paid in instalments over a period of time.
There is no provision for maintenance payments to be made, as is the case with married couples divorcing, and the bill essentially puts both parties back where they were before they began cohabiting.
The proposed legislation also contains an opt-out option for cohabiting couples who do not wish to be bound by it. This can be done in one of three ways: with an opt-out agreement, a cohabitation agreement or a deed of trust.
Our team of experts have many years of experience in the drafting of shareholders agreements. Contact one of them on 01727 858807 and see how we can help you.