Cohabitants and the Law.
The Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 (“the Act”) came into force on the 1st of January 2011 and is now law. The first official Civil Partnership took place in Ireland on the 5th of April. As well as extending benefits to same sex couples in the areas of property, social welfare, succession, maintenance, pensions and tax, the Act also provides protections for other cohabiting couples including a redress scheme for financially dependent long term cohabitants on the ending of a relationship, whether by break-up or death. Prior to the passing of the Act, unmarried couples had no legal rights or entitlements to lay claim to the assets or estate of their partner. The phrase “common law spouse” had also given many couples the wrong impression that certain entitlements might accrue from their relationship. However, the Act will now introduce very significant changes to the legal status of unmarried couples.
New Rights of Cohabitants
The Act does not confer automatic rights on cohabitants but rather it provides a right to qualifying cohabitants to seek financial redress at the end of a relationship. The Act has defined “qualified cohabitants” as cohabitants residing together as an unmarried couple in an intimate relationship for a period of five years, or two years where there is a child or children of the relationship.
The Act establishes a type of safety net scheme for cohabiting couples. The aim of this is to protect an economically dependent or vulnerable party at the end of a long-term cohabiting relationship, whether arising on relationship breakdown or on death. It allows qualified cohabitants to apply to court for certain reliefs and in seeking redress from the Courts, the qualifying cohabitant must satisfy the Court that he or she is financially dependent on his or her partner and that the financial dependence arises from the relationship or the ending of the relationship.
If the Court is satisfied that this is the case, it may make orders in relation to Maintenance Payments, the transfer of property from one party to the other, a share in the pension of the other party, or a share in the other party’s estate on death. In making any order, the Court must consider the financial circumstances of each of the parties, the rights and entitlements of any spouse/former spouse or civil partner/former civil
Partner, the rights and entitlements of any dependent children, the length of the relationship between the parties, the financial contributions made by each of the parties and the contribution made by either party in looking after the home.
It should be borne in mind that an application for financial redress must be made within 2 years of the relationship ending.
Cohabitants Agreement
The Act makes express provision for the recognition of Cohabitant Agreements enabling cohabitants to regulate their joint financial affairs and also enabling couples, where they may so decide, to specifically opt out of the redress scheme in their particular circumstances. Considering the vast range of orders that can be made by the courts, it would be prudent for cohabiting couples to enter into a Cohabitants Agreement to provide for financial matters during their relationship or at the end of the relationship, by death or otherwise. In order for any agreement to be valid, each party must receive independent legal advice before entering into the agreement, or else waive their right to independent legal advice in writing. The agreement must be in writing and signed by both Cohabitants. Furthermore, the general law of contract must be complied with. Your solicitor will ensure that the agreement is drafted correctly.
However, must be remembered that it is possible for the Court to vary or set aside a cohabitants’ agreement in exceptional circumstances, where “serious injustice” would be caused by enforcing the agreement.
Co-Ownership Agreements
Furthermore, if you are purchasing property with your partner, you should always enter into a Co-Ownership Agreement. This agreement will recite the contribution by each party towards the purchase price, how the property will be dealt with if the relationship breaks down and how the proceeds will be divided if the property is sold. You will also decide if you wish to purchase the property as ‘joint tenants’ or as tenants-in-common’. There is an important distinction between the two. If you purchase as ‘joint tenants’, your unmarried partner will automatically become the sole owner of your property on your death, regardless of whether or not you are still in a relationship. If you purchase as ‘tenants-in-common’, your share of the property will be distributed in accordance with the terms of your will, and so may not necessarily go to your unmarried partner.
Succession Rights of Cohabitants
Under the Act qualified cohabitants are entitled to apply for an order for provision out of their partner’s estate after their death. However, cohabitants cannot apply for an order of the Court where the relationship concerned ended two years or more before the death of the deceased. There is an exception to this where the applicant was in receipt of periodical payments from the deceased or proceedings under the Act for financial redress were pending at the time of the death.
In consideration of all of the foregoing, it is important to consider entering into a Cohabitant’s Agreement to regulate your affairs. It may be the case that you and your partner do not wish to avail of the reliefs provided for under the Act. However, if you do not opt out of the legislation by written agreement, it is open to either party to apply to court for financial relief if things turn sour.
