However difficult it may be in the early throes of love to envisage a partner as anything other than “de-lovely”, couples who don’t discuss their legal positions early on can be left vulnerable in the event of separation. According to Resolution, a national organisation of family lawyers, over half of the people in the UK mistakenly believe that couples living together in a “common law marriage” will be afforded legal protection in the event of separation or death of a partner. In reality, no such protection exists. Even more worrying is the lack of preparation couples have made for worst-case scenarios. Resolution reports:

  • Only 1 in 7 cohabitees safeguarded their positions with written agreements about ownership of accommodation where one or both partners owned the property.
  • Only 1 in 10 cohabitees had changed a will as a result of cohabiting relationships.
  • Only 1 in 5 cohabitees sought advice about their legal position.

While it may seem rather cold-hearted to hash out what will happen if the relationship ends, discussing these issues sooner rather than later can prevent financial loss and further heartache.

Updating the Law with the Cohabitation Rights Bill

Cohabiting couples are the fastest growing family type in the UK (growing from 9% in 1996 to 14% in 2006), yet still left without legal protection. In response, the Government is currently in the midst of enacting the Cohabitation Rights Bill. Previously, the Government found it difficult trying to protect families going through separation, especially parties who have become dependent on their former partner, while also promoting the institution of marriage. The proposed legislation offers couples a “divorce-lite” or “diet-divorce” and a basic framework of rights and responsibilities for cohabiting un-married couples, while still keeping distinct the rights obtained through marriage or civil partnership. If enacted, the Cohabitation Rights Bill makes it easier for un-married couples living together to know where they stand legally.


Under the Bill, protection is afforded to:

  • Cohabiting couples with children; or
  • Couples without children that have cohabitated for 2 years or more.

By applying for a Financial Settlement Order (FSO), the cohabitees are afforded a clean break from each other and returned to the position they would have been in had the cohabitation not occurred. For example, where one party has made a qualifying contribution (i.e. one partner paying part of the other partner’s mortgage) and then suffers an economic disadvantage as a result, the legislation allows for the party to be compensated for that disadvantage. Similarly, where a party has retained a benefit due to the other’s qualifying contribution, the FSO tries to reverse it. The courts will also take into account discretionary factors, such as:

  • Welfare of any minor who is a child of and lives with either of the parties;
  • Income, earning capacity, property and other financial resources of the parties;
  • Financial needs and obligations of the parties;
  • The conduct of the parties; and
  • The circumstances of the qualifying contribution.


Under the proposed law, the right to apply for a FSO would be the default. However, for the “romantics” out there, the Bill will provide an opt-out position for couples. Couples could opt-out in three different ways—by opt-out agreement, by cohabitation agreement, and by deed of trust. It is important to stress that each of the these options provide varying levels of protection and enforcement.

Opt-out agreement: The requirements to opt-out by agreement are not too dissimilar from those that apply to Qualifying Nuptial Agreements (pre-nups). Parties must have received independent and separate legal advice and have understood the consequences of entering into such an agreement. By entering the agreement, parties could either prohibit partners from applying for a FSO or tailor the agreement to specify in which circumstances an application for FSO could be made. For example, parties could agree that a FSO would not be available in respect of the parties’ home, or a FSO being available only if the parties have a child together. This method of opting-out is very flexible and user-friendly.

Cohabitation agreement: A cohabitation agreement is also a flexible method of recording parties’ intentions about the way they will organise their affairs if or when they separate. Drawing up a cohabitation agreement can help couples think through some of the key issues in the relationship. Though not all of the agreement may be legally enforceable, it can help reduce the likelihood of disputes and make any disputes that arise easier to resolve.

Deed of Trust: A deed of trust can establish whom the legal and/or beneficial interest owner is in a property or asset. Drafted correctly, this can be used to protect interest in the occupied property. If the deed does not clearly set out who owns the beneficial interest, difficulties can arise, giving courts the ability to infer the parties’ intentions and imply trusts where no formal deed was entered into. Therefore, a poorly constructed deed of trust can lead to great uncertainty.

A Fool in Love?

The Bill, once passed, will be warmly received by many as it provides a much-needed protection for long-term cohabitees, while giving couples the flexibility to tailor their own agreements or opt-out completely. Sure, having a frank discussion on exit strategies may seem unromantic, but ensuring that you and your partner are better protected from the often messy and unexpected things in life is an act of love.


For more information on Opting-out or how the Cohabitation Rights Bill will affect you, contact us at 01273 696962 to arrange a consultation meeting with one of our legal experts.