Heaven sent: Scottish cohabitation law

Scots law has long recognised the right of a spouse (and, more recently, a civil partner) to a share of his or her predeceasing spouse’s or civil partner’s estate. But the traditional family structure is evolving - divorce is common and many couples choose not to get married at all. As our society moves on so must the law evolve to reflect those changes.

Limited circumstances

For a long time, Scots law did not recognise the rights of cohabitants on death except in a few limited circumstances. For example, there may be a prior contractual obligation in relation to property which forms part of the estate. A house owned jointly with a survivorship destination would allow the heritable property to pass to the cohabitant on death, assuming the survivorship destination was not evacuated in a will.

Also, if a cohabitation agreement had been executed, there is case law to suggest that the provisions of the cohabitation agreement would override any subsequent will.

The Family Law (Scotland) Act 2006 led to non-married and non-civilly enpartnered cohabitants having, in certain circumstances, a right to claim from the estate of the predeceasing partner. Section 29 of the 2006 Act came into effect on 4 May 2006.

Section 29 provides the opportunity to claim on a deceased partner’s estate, within six months of the date of death. It is only available where the partner died without leaving a will, and immediately before the death, he or she was domiciled in Scotland.

The deceased must have been a cohabitant at the time of his or her death, i.e:

• a man and a women who are (or were) living together as if they were husband and wife; or

• two persons of the same sex who are (or were) living together as if they were civil partners.

The court has discretion to consider a number of different factors when deciding if the survivor was a cohabitant. For example, it may consider the duration of the cohabitation, the nature of the relationship, and the extent of any financial arrangements that subsisted during the relationship, It may also have regard to other matters it considers appropriate, such as whether there are children of the relationship, how it was perceived by the couple’s families and friends, etc.

The award may take the form of a capital sum and/or the transfer of property. The value of the award cannot, however, exceed the amount which the survivor would have received under the laws of intestacy had the survivor been a spouse or civil partner. Before making any award to the cohabitant, the court will also take into consideration the size of the intestate estate, as well as any other benefit that the cohabitant may have received, for example payments from a pension scheme or life policy.

The connection that is made between cohabitant relationships and to married couples or civil partnerships is thought to indicate parliament’s intention to restrict the benefits of the Act to stable ‘family’ relationships only. It is essential that the couple actually lived together, so relationships however close, say between a widow and widower each living in their own home, would not meet the test. Most commentators also interpret the connection to marriage or civil partnerships as indicating parliament’s intention that the relationship will be, at least potentially, of a sexual nature.

While that might be a clear implication where a couple are living together as if they were husband and wife, it is less so for couples living together as if they were civil partners, as the civil partnership legislation has no equivalent sexual expectations or concepts to those found in matrimonial legislation, such as consummation, adultery, etc. It is unlikely however that parliament intended different standards to apply depending on whether the couple were of the same or opposite sexes.

Celibate relationships, whether within marriage or civil partnership, are far from unknown; whether as a lifestyle choice or the result of ill health, age, etc, and it will be interesting to see whether the courts will agree with the commentators’ interpretation as and when they are faced with this particular issue.

Rigid requirement

As already mentioned, entitlement is based on the deceased’s domicile at death. A claim can only be made where the deceased died domiciled in Scotland. It is also necessary that the couple were cohabiting immediately before the death. If a couple, during their joint lifetimes, satisfied the definition of cohabitants contained in section 25, but were not living together immediately before the death – because one partner was in hospital or a care home, or even in prison – is the survivor to be deprived of the right to make a claim? It is not thought that the courts will be too rigid in their interpretation of this requirement.

Crucially, claims must be made within six months of the death, beginning with the day on which the death occurred. The Act confers no discretion on the court to extend this deadline. So, if one’s partner died on, say, 4 August 2012, the claim would have to be lodged in court no later than 3 February 2013.

The time limit of six months has proved problematic, and has and will continue to result in occasions where the cohabitant’s claim will be time-barred.

In addition, the list of relevant factors which the court is allowed to consider is open ended. It is at the discretion of the court as to which factors are considered of greatest importance. While this is to allow each relationship to be viewed individually, the lack of focus as to what the important factors are can make it difficult to advise clients.

It is important to note that section 29 of the 2006 Act can only be used where the deceased died intestate. If the deceased had prepared a will which excludes the cohabitant they will not be able to make a claim under section 29.

Due to the various problems and uncertainties with section 29, the Scottish Law Commission has included in their report (and draft bill) on succession some recommendations to change the rights of cohabitants against their partner’s estate. The report has recommended section 29 be repealed and a new statutory regime be put in place. It is also recommended that the new regime apply to testate estates as well as intestate estates.

Numbers game

The Commission’s recommendation is to allow cohabitants to be entitled to a percentage of what they would have been entitled to if they had been the deceased’s spouse or civil partner at the time of death.

The Commission has proposed that five factors be used to consider what percentage is given:

1. Whether the parties were members of the same household.

2. The stability of the relationship.

3. Whether or not it was a sexual relationship.

4. Whether there are children.

5. If the couple acted as though they were a married couple to public perception.

The Commission has also recommended that the time limit for claiming should be extended.

The rights of cohabitants produce conflicting opinions among the general public. For some, these recommendations do not go far enough. Cohabitants are still required to raise a court action to make a claim, which can be costly and time consuming; financially this could mean there are those who simply cannot afford to claim.

It is not uncommon for the cohabitant’s claim as an individual to be against himself or herself as executor, having been appointed as such as the parent of a child or children of the relationship with the deceased. This can be difficult for the cohabitant and adds a further dimension to the often already difficult decision as to whether or not to go ahead with a claim.

Others take the view that giving cohabitants rights produces uncertainty as to who will inherit from an estate. It would be hard to define the circumstances in which a cohabitant would gain the right. How many years cohabitation should be required? Does there need to be evidence of joint financial arrangements, joint ownership of property?

The rights of cohabitants is clearly a developing area of law, and while further change is inevitable it will likely be some time before the detail of this becomes clear. With this is mind, the rights under section 29 should not be regarded as any substitute for a suitable will and/or a cohabitation agreement. It is always better to determine for oneself what will happen to one’s estate after death, rather than to leave that to the discretion of courts in perhaps contested court proceedings after the event.

Karen Stewart is an assistant solicitor at Bird Semple Private Client Solicitors, email ks@bsemple.com