To wed or not to wed

It is a common, but mistaken, belief that being a ‘common law spouse’ means something and that if the relationship breaks down you have an automatic entitlement to share in your partner’s assets in line with divorce, dependent on how long the relationship lasted.

With a view to relieving potential hardship in this situation, the Law Commission published a consultation paper last year, recommending sweeping changes to protect cohabitees.
If these proposed changes are adopted as law, you may then have an automatic right to claim a share of your partner’s assets (unless you have formally ‘opted-out’ of the scheme by written agreement) if you have:

• A child together
• Lived in the same household (not necessarily the same house) for a minimum period – not yet specified
• Suffered an economic disadvantage as a result of the relationship or secured an economic advantage for your partner as a result of the relationship.

The claim would depend on your partner’s financial resources. Awards would take the form of periodical payments, lump sum orders, property adjustment orders and pension sharing orders (like on divorce), with a likely ceiling of 50%.There is also the possibility of ongoing maintenance (over and above child maintenance).

The Law Commission will publish its final report in August 2007 and if approved by the Government, legislation could be in place as early as 2007 or 2008.

For the time being, however, if you are cohabiting, you and your partner must preserve your respective financial security through a combination of cohabitation agreements, declarations of trust and by making Wills.

Sandra Davis
Tel +44 (0)20 7440 7014
sandra.davis@mishcon.com