We look at the financial implication of living with a partner, getting engaged and marriage. This slide examines some of the common misconceptions and what can be done to safeguard property and assets in the event of a relationship breakdown and will provide an overview of the financial claims available to couples upon separation at different stages of the relationship.
2. The number of married couples is on the decline from 12.6m in 1996 to
12.2m in 2012
The average age of people getting married is now 36.2 for men and 33.6
for women
The number of couples living together has increased significantly from
1.5m in 1996 to 2.9m in 2012
1 in 4 babies are now born to unmarried couples, a rate that has nearly
doubled since 2002.
3. Common law husbands and wives have the same rights as married
couples
Couples will acquire an interest in each other’s property after a period
of living together
Couples will acquire an interest in each other’s property if they have
children together
Couples can protect their interest in property by ensuring it is in their
sole name and they pay all the bills
Couples can seek maintenance from each other when they separate
4. There is currently no legislation in place to protect the rights
of cohabiting couples, as there is for married couples.
So no ‘special status’ for cohabiting couples.
The only recourse available where a dispute arises is in
contract law or complicated trust law, which can often result
in an outcome that is unsatisfactory to one or both of the
parties.
5. The Legal ownership:
Sole Name – One legal owner
Joint Tenants – Two or more legal owners all having the same interest
Tenants in Common – Two or more legal owners with separate defined
interests
6. Express declaration
Where an express declaration as to how the parties wish to hold the beneficial interest
exists it is conclusive ownership.
Resulting trust
A ‘resulting trust’ arises when someone other than the legal owner of the property
has made a direct financial contribution towards all or part of the purchase price of
the property and there is nothing to suggest that the contribution was intended to be
a gift or a loan.
Constructive trust
A ‘constructive trust’ arises where two or more people acquire a property with a
common intention that it is to be shared, although the legal ownership is not in all
their names.
7. Stack v Dowden [2007]
The House of Lords held that:
“the starting point where there is joint legal ownership is joint beneficial
ownership. The onus is upon the person seeking to show that beneficial
ownership is different from the legal ownership”
What the Court is looking for:
“the search is to ascertain the parties’ shared intentions, actual, inferred
or imputed, with respect to the property in light of their whole course of
conduct in relations to it”
Assessing the parties’ shared intentions:
“many more factors than financial contributions may be relevant to
divining the parties true intentions”
8. any advice or discussions at the time of the transfer
the reasons the home was acquired in their joint names
the purpose for which the home was acquired
the nature of the parties’ relationship
whether the parties had children for whom they both had responsibility
to provide a home
9. how the purchase was financed, both initially and subsequently
how the parties arranged their finances, whether separately or together
or a bit of both
how the parties discharged the outgoings on the property and their
other household expenses
the parties’ individual characters and personalities
contributions towards financing or constructing an extension or making
improvements to the property which added significantly to its value
any other factors indicating that the parties’ intentions may have
changed over time
10. Express Declaration:
Transfer Form (TR1)
Declaration of Trust
Cohabitation / Living Together Agreement
11. Where a couple have a child together either can apply to the Court for any of
the following orders against the other parent:
Periodical payments to the child or parent for the benefit of the child
Secured periodical payments
Lump sum
Settlement of property for the benefit of the child
Transfer of property to the child or parent for the benefit of the child
12. In deciding whether to make any of the above orders the Court must
consider:
The income, earning capacity, property and other financial resources of the
parents has or is likely to have in the foreseeable future
The financial needs, obligations and responsibilities which each parent has
or is likely to have in the foreseeable future
The financial needs of the child
The income, earning capacity (if any), property and other financial
resources of the child
Any physical or mental disability of the child
The manner in which the child was being, or was expected to be, educated
or trained.
13. Property
Section 2 of the Law Reform (Miscellaneous Provisions) Act 1970 provides as follows:
“2 Property of engaged couples
(1) Where an agreement to marry is terminated, any rule of law relating to the rights of husbands and wives in relation
to property in which either or both has or have a beneficial interest, including any such rule as explained by section 37 of
the Matrimonial Proceedings and Property Act 1970, shall apply, in relation to any property in which either or both of the
parties to the agreement had a beneficial interest while the agreement was in force, as it applies in relation to property in
which a husband or wife has a beneficial interest”
Section 37 of the Matrimonial Proceedings and Property Act 1970 states:
“37 Contributions by spouse in money or money’s worth to the improvement of property
It is hereby declared that where a husband or wife contributes in money or money’s worth to the improvement of real or
personal property in which or in the proceeds of sale of which either or both of them has or have a beneficial interest, the
husband or wife so contributing shall, if the contribution is of a substantial nature and subject to any agreement between
them to the contrary express or implied, be treated as having then acquired by virtue of his or her contribution a share or
an enlarged share, as the case may be, in that beneficial interest of such an extent as may have been then agreed or, in
default of such agreement, as may seem in all the circumstances just to any court before which the question of the
existence or extent of the beneficial interest of the husband or wife arises (whether in proceedings between them or in
any other proceedings).”
The court must, therefore, consider whether either party has made a contribution in money or money’s worth to the
improvement of property in which the other party has a beneficial interest, whether it had been a contribution of a substantial
nature and whether, subject to any contrary agreement, a beneficial interest in the property had been acquired.
14. Household Contents and Personal Belongings
The principles regarding ownership are broadly the same as
those applying to property for property.
Express Agreement – an express declaration as to beneficial
ownership
Resulting Trust – any contribution towards the purchase price
Constructive Trust – the existence of any agreement between the
parties as to ownership or the parties intentions (express or
implied), regardless of contributions.
Existing Property – generally items owned by either party before
the engagement or bought by one party from their own resources
during the engagement, will remain the property of that party.
15. The ring
The legal position is governed by section 3(2) of the Law Reform
(Miscellaneous Provisions) Act 1970:
“(2) The gift of an engagement ring shall be presumed to be an absolute
gift; this presumption may be rebutted by proving that the ring was
given on the condition, express, implied, that it should be returned if the
marriage did not take place for any reason .”
16. 34% of marriages are expected to end in divorce by the 20th
wedding anniversary
The number of divorces in 2011 was highest among men and
women aged 40 to 44
The average duration of marriage for divorces granted in 2011 was
11.5 years
17. The orders fall into two main categories: income orders and
capital orders.
The income orders are:
Periodical payments (maintenance)
Secured periodical payments
The capital orders are:
Lump sum orders
Property adjustment order (for property to be transferred or
held on trust)
Orders for sale
Pension sharing orders
18. In deciding whether to make any of the above orders the Court must consider:
Income, earning capacity, property and other financial resources of the parties
The financial needs, obligations and responsibilities of the parties
Standard of living enjoyed by the family
The age of the parties
Any physical or mental disability of either of the parties
The contributions which either party has made or is likely to be made in the foreseeable future
The conduct of each of the parties
Any benefit which, by reason of the divorce, either party will lose the chance of acquiring
The existence of a pre-marriage agreement
All the circumstances of the case including the welfare of any minor.
19. Pre or Post-Marriage Agreements
Radmacher v Granatino [2010]
“The Court should give effect to a nuptial
agreement which is freely entered into by each
party with a full appreciation of its implication,
unless in circumstances where it would not be fair
to hold the parties to the agreement.”
20. Whether or not a pre-marriage agreement will be considered fair will depend
on the facts of each particular case, but generally the Court will look at the
following:
that the agreement does not prejudice the reasonable requirements of
any children of the family
that the agreement makes provision to meet the parties needs and to
compensate them upon divorce
that the agreement addresses the existing circumstances and not merely
the contingencies for the future
An agreement would not be consider unfair simply because it distinguishes
between wealth accumulated during the marriage and pre-marital property
or property that one party expects to receive from a third party.
21. The circumstances surrounding the making of pre-marital agreements
will also effect the weight given to them by the Court upon divorce.
In summary these factors are as follows:
whether there has been any duress, fraud or misrepresentation.
whether there has been any other unacceptable conduct by
either party
whether the parties have received legal advice and provided full
disclosure of their assets and financial circumstances
22. whether the agreement was signed at least 21 days
prior to the marriage
whether the parties intend the agreement to be
legally binding
the parties’ ages, maturity, previous experience of
relationships and marriage
23. Please contact us with enquiries:
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