Will Cohabiting Couples Soon Gain New Rights?

The Government has launched a major consultation into cohabitation law reform, examining some of the biggest proposed changes to family law in decades.

The consultation considers whether cohabiting couples should receive greater legal protections on separation and death, reflecting the fact that around 3.5 million people in the UK now live in cohabiting relationships.

Among the proposals being considered are:

• Financial remedies for qualifying cohabitants following relationship breakdown;

• Legal rights for cohabitants on separation;

• Intestacy rights similar to those enjoyed by spouses and civil partners;

• Greater rights for cohabitants where children are involved;

• Potential changes to inheritance claims and estate administration.

The consultation acknowledges that modern family life has changed significantly, while the law has often failed to keep pace. For many families, however, the most important point is not whether these reforms happen. It is that uncertainty already exists.

Every week we speak to couples who have lived together for many years, jointly raised children, built wealth together and assume they automatically have the same legal protections as married couples. In many cases, that assumption is incorrect.

Whilst legal reform may eventually provide greater protection, future legislation can never provide the same level of certainty as proper planning undertaken today.

This is particularly relevant where families have:

• Children from previous relationships;

• Significant property assets;

• Business interests;

• Vulnerable beneficiaries;

• Unmarried partners;

• Complex family arrangements.

As family structures become increasingly diverse, the importance of creating clear legal frameworks becomes ever more important.

Waiting for Parliament to determine how assets should be distributed is rarely a strategy.

Creating certainty is.

Commenting on the consultation, James Berkeley, Senior Counsel at iTrust121, said:

"The consultation highlights a reality that estate planners have been discussing for many years: family structures have changed significantly, but the law has often struggled to keep pace.

More couples are choosing not to marry, more families are blended, and more assets are accumulated jointly over long periods of time. Yet many people continue to assume that long-term cohabitation automatically creates legal rights equivalent to marriage. In many cases, that assumption is simply wrong.

Whilst the Government's proposals may ultimately strengthen protections for cohabiting couples, families should be cautious about relying on future legal reform to solve today's planning problems.

Good legacy planning is about creating certainty while everyone is alive, healthy and able to make informed decisions. It is rarely sensible to leave fundamental questions about inheritance, occupation rights, family wealth or future financial support to be determined by changing legislation, court applications or disputes after death.

This is one of the reasons trusts continue to play such an important role in modern estate planning. The right trust structure allows families to create clear arrangements around ownership, occupation, succession and financial support without waiting for the law to catch up with their personal circumstances.

As family structures become increasingly diverse, choosing the correct trust structure becomes more important than ever. Different families face different risks. A cohabiting couple, a blended family, a vulnerable beneficiary or a second marriage may all require very different planning solutions.

At iTrust121, we believe the objective is not simply to decide who inherits assets after death. The objective is to create a framework that protects family intentions, reduces uncertainty and provides clarity for future generations regardless of how the legal landscape evolves."

James Berkeley

Senior Counsel

iTrust121