The fastest-growing type of family in the UK is the cohabiting couple with the number of cohabiting families growing by nearly 26% over 2008-2018.
Unfortunately, many of these cohabiting couples may not understand their legal rights or position, assuming it is the same as a spouse or civil partner. Such misconceptions can have serious financial consequences.
In Scotland, there are two situations where their rights (or lack of them) matter for cohabitees: when the relationship ends or when one partner dies. In neither case will the cohabitee have the same rights as a spouse.
At the end of a relationship, there are far fewer options for a cohabitating partner to claim a financial settlement from their former partner. A spouse may be entitled to settlements such as maintenance payments, or a share of a pension, whereas the only option available to cohabitees is a claim for a lump sum to compensate them for economic disadvantage suffered.
And if one partner dies without a Will, the cohabitee may be entitled to as much as a spouse. However, this is not guaranteed and doesn’t happen automatically. They have to go to court and their claim can be contested by family members.
There are straightforward ways to deal with these gaps or discrepancies. Making a Will can ensure that a surviving partner inherits the home or other assets, and can also prevent disputes between that partner and the deceased’s family.
Also, a simple cohabitation agreement can set out what each partner is entitled to if they split – especially important if they are buying property or going into business together. The agreement should also anticipate arrangements for changes such as having children, or be updated as and when circumstances change.
Drawing up a cohabitation agreement may not seem the most romantic of steps for a couple moving in together. But neither are most arrangements around finances, mortgage payments, and what happens if someone leaves or dies.
Many cohabitees don’t think of making such an agreement themselves, or are shy about suggesting one. In that case, a nudge from a third party – parent, relative, friend or adviser – can be helpful.
