If you are not married or in a civil partnership you will be a cohabitant in the eyes of the law. What happens when cohabitants separate is governed by the Family Law (Scotland) Act 2006. There are important differences to those who are married or in a civil partnership. The most important thing to remember is that you have only 12 months from the date you separate in which to resolve any financial claims. After that date you are legally barred from making financial claims under the Act.
An example of how this works in practice may assist. You meet your future cohabitant. He or she has a property in their sole name. You agree to move in. During the cohabitation you receive a £30,000 inheritance and use that to build a conservatory on your cohabitants property. You subsequently separate. The property has remained in the sole name of your cohabitant.
You have, from the date of separation, 12 months in which to resolve your claim. That will either be by entering into an Agreement prepared by your solicitor and signed by you both or, alternatively, raising a court action.
If you failed to do anything within that 12 month period you have lost and your former cohabitant has gained.
If your cohabitant has passed away you only have 6 months in which to make a claim. Take an example where, as with the previous example, you have lived with your cohabitant for 20 years but the property has always been in their name. He or she passes away. You fail to initiate a claim within the 6 month time limit. In the absence of a Will to the contrary you will receive nothing from the property.
In order to make a successful claim you must demonstrate that the other cohabitant has derived an economic advantage from contributions made by you AND that you suffered a corresponding economic disadvantage in the interests of the other cohabitant or any child/children of the cohabitation.
This does not entail a detailed analysis of who paid the mortgage and who paid the food shopping throughout the relationship. The court has considerable discretion in determining these cases and, unfortunately for both you and us, the outcome is less certain. That makes coming to an agreement out with court all the more sensible and risk free.
The above information is aimed at those who have or are going to separate. You may just want more legal certainty if you are going into a new relationship or are cohabiting now. Given the uncertainty from litigating these types of cases, it makes sense to plan for the future. Whilst you may baulk at the thought of a pre-Cohabitation Agreement (or a post-Cohabitation Agreement) it should form part of your future life plans as much as other legal documents, such as a Will. Not having legal provisions in place about what happens IF if you separate runs the risk of legal uncertainty, unwanted stress and strife and, of course, unwanted legal expenses.
We can create such Agreements to suit your circumstances. More and more people are cohabiting and you would be well advised to protect yourself should the worse happen.