The Cohabitation Conundrum: The legal implications of buying a house before tying the knot. Part 3
As we have discussed in Parts 1&2, cohabitants are not offered the same legal rights as married couples. In Part 2 we looked at how you are protected if your relationship breaks down. While it may not be something you want to think about we will look at how you are protected if your partner passes away while you are living together.
As we have discussed previously, the Family Law (Scotland) Act 2006 offers limited financial protection and unfortunately this is also the case if your partner dies during the period of cohabitation.
What rights are available to cohabitants on death?
If your partner dies during your period of cohabitation without leaving a Will, you as the surviving cohabitee can make a claim to the estate of your deceased partner.
You can raise a claim for a “discretionary financial award” provided that you raise this claim within 6 months of the death of your partner.
What is a “discretionary financial award”?
Unhelpfully, the answer is unclear as the Act does not provide a definition of what “discretionary financial award” means and it does not provide any guidance as to how an award is calculated. This can be a cause for concern for cohabitants, especially as the court can take into account “any other matter it considers appropriate”.
MMI Golden Rule: You must raise any claim within the 6 month time limit to prevent your claim being time barred. Think of the time limit as a countdown. As soon as the counter reaches zero time is up and you cannot take any further action. This is an extremely important point as the Courts have no power to grant an extension.
What claims can I make on the death of my partner?
You can apply to the court for either or both of the following;
a payment of a sum of money from your partner’s estate, and/or
the transfer of property (which includes the property you and your partner lived in).
MMI Golden Rule: The court has the sole option whether or not to grant an award in your favour. There is no automatic “entitlement” to your deceased partner’s estate or to the property you are you partner lived in.
What factors will the court consider when making its decision whether or not to grant an award in my favour?
Some of the factors the court considers are:-
the nature and extent of your partner’s estate;
any other benefits such as; payments under life insurance, death in service benefits, pension benefits, etc. and;
any other claims that have to be considered i.e. if your partner has children then the court will consider any claims by them.
How much will it cost me to apply for a court action?
The costs associated with obtaining an award can be expensive and as the courts have sole discretion in granting an award, assessing the prospects of success can be difficult. Additionally, as the process has the potential to become expensive, you could keep in mind that the cost of the process may exceed the cost of the claim itself.
How can I protect myself?
As we have mentioned before, the rights offered to cohabitants under the Act are weak, out of date and inadequate. Our advice is that you create a special Agreement with your partner and create a Will in order to ensure that you are protected in the unfortunate event the relationship comes to an end or worse, one of you passes away.
As we have discussed above, the inheritance process for cohabitants is extremely onerous in the absence of a Will. As personal circumstances change and the legal environment becomes more complex; having an agreement and Will would provide you with the peace of mind in knowing that if the worst happens you have some form of protection.
MMI offer bespoke cohabitation Agreement and Will writing services to cover your every need just visit our dedicated MMiPeople area.