Sometimes when a couple decide to live together they will then decide to get married. In these circumstances, if their marriage was to break down then any financial settlement would be based on the laws pertaining to divorce.
In other cases the couple will decide not to get married and live together. The law recognises this type of relationship as cohabitation. While everybody understands there are legal consequences relating to marriage, what appears to be less well-known is the fact that if a couple do decide to cohabit there are legal rules that are applied on separation. Some people might think that the whole point of cohabiting, rather than getting married, is to give the couple the option of keeping their finances separate but in order to protect cohabiting couples there are now rules in place which mean that if the relationship is to end one person may have a financial claim against the other.
It is important to realise that the extent of that claim will not be the same as it would be if the couple were married. Whereas when a married couple separate the law says that they have to decide on a fair share of the matrimonial property the situation for a cohabiting couple is different.
The criteria for a cohabiting couple at its simplest level is whether or not either party has gained a financial advantage as a result of the relationship. In fact, the legislation for cohabitation cases is quite complicated and you really need someone to talk through the circumstances with you and decide whether you have a claim or not.
It is also possible to ‘contract out’ of the rules relating to cohabitation by signing a pre-cohabitation agreement which basically says that the rules will not apply to your relationship.Our specialist advice is required to decide whether this is a good thing for you or not.