Unmarried couples who live together 3-year rule in new law plan | Personal Finance | Finance

A significant shake-up is being planned for couples who are living together outside of marriage. Under a proposed ‘three year rule’, unmarried partners would become entitled to greater rights should their partner pass away or the relationship break down.

Currently, in England and Wales, cohabiting partners have no automatic legal right to inherit from a deceased partner, regardless of the length of time they lived together or whether they have children. Speaking on the BBC‘s Money Box programme, expert Paul Lewis explained that the proposed changes could prove transformative. To be eligible, couples would need to have cohabited for a minimum of three years, unless they have a child or children together.

He said: “In the last 24 hours the government has published its plans to give couples living in unmarried bliss more financial rights. Cohabiting is the fastest growing type in England and Wales with more than 3.5million couples living together without being married or in a civil partnership.

“But if their relationship ends or one of them dies they have almost no legal rights in England and Wales to share or inherit money or property belonging to the other, regardless of how long they have lived together or if they have children.

“These new government proposals would change that.” The government has described the existing system as ‘outdated’, stating that it provides unmarried couples living together with minimal financial protections should their relationship break down. Under the proposed reforms, individuals could be entitled to a portion of any property sale proceeds, helping to safeguard their financial future.

Officials highlighted that difficulties emerge when couples separate and one partner is financially dependent on the other. The government stated the proposals would assist couples, including survivors of domestic abuse, in achieving financial security and independence at the conclusion of a cohabiting relationship, ‘whatever their marital status’.

The consultation will also explore whether courts should give greater weight to the impact of domestic abuse, including controlling or coercive behaviour or economic abuse, when assessing finances for married couples and cohabitants.

The consultation will further examine strengthening protections for bereaved partners left in uncertain circumstances, looking at granting cohabiting couples automatic inheritance rights should their partner die without leaving a will.

Additionally, the government is proposing that pre-nuptial and post-nuptial agreements be made legally binding, ensuring that those who choose to enter into such arrangements can have full confidence their financial wishes will be respected in the event of a divorce. A 10-week consultation has been launched on proposals that could include a new 3-year qualification period. Joanne Edwards, a partner at Forsters and member of the national committee of Resolution — the national family lawyers association — spoke of the significance of couples addressing this matter, saying: “It’s terribly important. Resolution, we’ve been delighted to see these proposals brought forward precisely because not enough people do thing about it, whether rights on separation, or rights on the first death when they’re not married and they find out, all too starkly, all too late, that they don’t have rights.”

Mr Lewis commented: “Of course that couple has been together for 25 years and some people do believe that after a certain time there is something called a common law marriage.”

Ms Edwards responded: “Despite successive education campaigns, that common law marriage myth still persists. Worryingly around 47 per cent of people, even in cohabiting relationships, still believe that, so it highlights the extent of the problem and why we can’t just keep saying either people need to get married or they need to be educated.”

Regarding the definition of a cohabiting couple under the new proposals, Ms Edwards elaborated: “This is really important and something which I do hope people grapple with the detail of because I know there is a concern about this prospect of the state seeming to impose eights that people don’t want any degree of permanence.

“The government says very clearly this would have to be two people living together as a couple in en enduring family relationship. There will be a checklist of factors that the court would take into account if there were any doubt about that and in terms of eligibility would have to be a minimum of three years cohabitation under the proposals except if the couple had a child or children together.”

Mr Lewis raised questions about living arrangements, which he noted could be ‘fluid’, with individuals potentially moving in while maintaining a previous residence or spending only a few nights weekly – and queried when the ‘3 year clock’ would begin. Ms Edwards said: “It’s an important point and one which the checklist of factors would deal with. It would be about the degree of permanence, whether they’re in a sexual relationship, what the public perception of their relationship is .

“It’s actually something we’ve got in legislation already, for example around adoption, and also plenty of other countries have this legislation already so have grappled with this. People need to be aware and decide how they want to frame their relationship and then regulate it between themselves.”

Mr Lewis said: “If they do meet the criteria and enter into what the government is calling a cohabitation framework, what rights do they get over each other’s money or the home they share?” Mr Edwards explained: “Under the proposals far more limited than if they were married. Marriage will remain what government wants to prioritise but it will be focused on their basic needs. It’s a basic framework of rights but making sure that nobody leaves an unmarried relationship in a position of need.”

Inheritance tax is excluded, Mr Lewis noted, with provisions when one partner dies included regarding what they might receive. He added: “But that exclude inheritance tax because that’s a matter for the Treasury – that seems a bit silly top ut it bluntly.” Ms Edwards said: “One would have imagined that’s something that would need to be looked at so for now we’re grateful that any proposals are out there, the intestacy rule s have needed looking at for a long time.2”

Mr Lewis said: “If you don’t have a will, unmarried couples will get more rights than they’d have at the moment.” Ms Edwards agreed: “They will. Only about 1 in 5 unmarried couples have wills and one will get more rights under the new rules but then again the qualifying criterial so the proposal being looked at is having to live together for five years before you qualify under those rules or for two years if you’ve got children, so it won’t be the automatic you would qualify under the interstacy rules.” The consultation opened on June 5 and will run for 10 weeks, concluding on August 14. Throughout this period, the Government will seek input from members of the public, legal experts, academics, charities and other interested parties.

Deputy Prime Minister, David Lammy, said: “When a relationship comes to an end, each partner should have the support and certainty they need to rebuild their life. We’re launching this consultation to make sure our new family law builds a fair system that offers the most vulnerable protection in the event of a breakup, and at a time where the country is facing cost of living pressures.

“Whether you’ve been left bereaved by the sudden and unexpected death of a partner, or escaped horrific domestic abuse, our laws should work to protect you. These reforms strike an important balance between tradition and modernity. I’m determined that our justice system should work for everyone who needs it.”

To listen to Moneybox click here.

To read the consultation document click here.