Dispelling the Common Law ‘rights’ myth
12 December 2017
Incorrect assumptions around the ‘rights’ of the common law spouse continue to abound and need to be addressed in financial planning, says Kay Ingram, director of public policy at national IFA LEBC.
The myth of the common law spouse lives on and it’s a fantasy which can have devastating consequences for one or both parties, not just on relationship break up but also in the event of ill health and death. Day to day, most couples who cohabit miss out on tax breaks and pension benefits available to those who are married
“If things go wrong they have little protection against loss of property rights, and no right to maintenance unless a separate legal contract provides for these. They can commit years to running a home, helping build a business, subsidising the other’s lifestyle, having children together but still be left with nothing.
The Office for National Statistics (ONS) has reported the number of cohabiting households more than doubled in the past 20 years, with 3.3 million in 2016 compared to 1.5 million in 1996 (ONS Families and Households Survey 2016). This means 6.6 million individuals are sharing family and financial responsibilities, but have no legal framework to fall back on if things go wrong.
In November, Jakki Smith won a landmark victory in the courts, when awarded bereavement damages by the health authority, which admitted its negligence contributed to the death of her long term partner. Had she been married, she would have had an automatic entitlement. Similarly, Denise Brewster had a long legal battle to win a dependant’s pension from her late partner’s pension scheme.
We know family lawyers are becoming increasingly concerned at the consequences of long term relationship break up and are asking policymakers to consider creating similar rights to those enjoyed by married couples, but until that is done a lot of people will be losing out.
Getting married can resolve a lot of these issues. Those who choose not to should get good legal and financial advice to avoid financial disadvantage when a relationship ends due to break up or death.
Canada Life is launching a series of new webinars specifically designed to answer the most common and difficult questions...
Standards International has launched the Paraplanning Standard alongside the Standards International Academy, a skills and knowledge training facility for...
Ulf Herbig, Product Owner at KNEIP looks at what paraplanners need to understand about PRIIPs and the challenges posed...