Recently, along with colleagues from Silk Family Law, I spoke to 60 members of the CLA , the organisation that supports landowners and rural businesses.
The seminar looked at the challenges of keeping a farming business in the family, and one of the issues raised was cohabitation. Some attendees had sons or daughters who lived with their partners, and parents were understandably concerned about their legal status.
Cohabitating couples have been the fastest growing family type over the last 20 years, with ONS statistics showing that between 1996 and 2016, cohabiting families doubled from 1.5 million to 3.3 million. Many people believe in the myth of “common law marriage” and are shocked to find out that couples who live together do not have the same rights as those who marry.
That lack of legal status can be of particular concern in farming families, where a cohabiting couple may be given a farm cottage in which to live. What happens if their relationship breaks down? Cohabitees are treated as two separate individuals, and their entitlement is determined by a number of factors. These will include what each brought into the relationship, their contributions to property assets, whether the property is in joint names or a sole name and an understanding of their joint intentions. The parents of a farming son may have provided the cottage, but perhaps his partner paid for a new kitchen and bathroom, or a conservatory.
Resolving a dispute may require a full analysis of a couple’s entire relationship history. This would include who paid for what, who promised what to the other person – and whether those promises resulted in a reliance of one person on the other. Property law is then used to resolve the issues, occasionally alongside the application of other doctrines, such as constructive and resulting trusts.
This can be consuming and costly, as well as possibly fuelling discontent and disagreements. My advice to the farming families I spoke to at the recent seminar was to have a straightforward cohabitation agreement, setting out the couple’s intentions regarding property and other assets.
Such an agreement will show clearly if one person owns a property, and whether it was ever intended that the non-owning person would acquire an interest in it. It should also set out who is to pay for what within the relationship, and whether by contributing payments towards the shared home, the ‘non-owner’ would acquire a right in the property.
In farming families, where a son or daughter who may have inherited assets from family members is considering living with their partner, a cohabitation agreement is vital. Often, it is the parents who will need to broach the subject of drawing up an agreement to minimise the risk of litigation in the future and avoid the risk of a claim against their son or daughter’s assets should the relationship break down.
As always in matters that may affect the financial stability of a farming business, I recommend taking sound legal advice as early as possible.
This blog first appeared as Margaret’s monthly column in the Yorkshire Post’s Country Week supplement.
Margaret has significant expertise in farming and landowning cases, you can contact her on 01748 900 888 or visit www.silkfamilylaw.co.uk. You can follow Silk Family Law on Twitter @Silkfamilylaw