Unmarried couples do not have the same legal obligations to one another as their married counterparts and a multitude of issues can arise over the ownership of property upon separation.
An unmarried person’s rights in relation to property are significantly affected by whether or not there are children of the relationship. If there are, it is open to a parent to make an application under Schedule 1 of the Children Act 1989 for a lump sum, settlement, or transfer of property Order.
However, since the law is that the cohabitant has no claims in his/ her own right, any capital which is awarded to purchase a property is likely to be held in trust until the child’s majority or the end of full-time education, whereupon the capital sum will revert to the payer.
This Order differs from financial remedy cases under the Matrimonial Causes Act (MCA) 1973 for married people as the court will only make an Order for the benefit of the children concerning their financial needs. More often, this will benefit the Applicant, but nevertheless, the purpose is to provide for the child and is not concerned about the financial needs of the Applicant alone.
Schedule 1 provides the legal basis for financial Orders made for the benefit of the child of unmarried parents and indeed an application can be made by a parent, guardian or special guardian of a child, or by any person who is named in a child arrangements order, as a person with whom the child is to live. This means that it has a broader reach as to who can make a Financial Order for a child.
In terms of making Financial Orders for children, the court may make more than one order for periodical payments or lump sum for the child at any time before the child has reached 18. However, the court can only make one order in relation to settlement or transfer of property.
Schedule 1 Orders can encompass the agreement concerning whether one party retains the rights to remain in the former jointly owned property until and derive the benefit of living at that property with the Child until a qualifying even (such as the child attaining the age of 18 years old) means that they then have to vacate the property or the property ownership reverts to the child.
Orders cannot be made by persons over 18 unless they fit into certain the criteria and there are special circumstances which justify the making of an Order. However, it should be noted that this is irrelevant if the child has not had a relationship with the parent.
When the court looks at the benefit of the child, it is constructed widely by to include financial and welfare benefit. A benefit to the parent can also be constructed as a benefit to the child.
Furthermore, a parent with care needs a certain amount of capital expenditure to ensure they can get a suitable home for the child and cover the legal costs. A caring parent also needs to be independent and must prepare for when support ends.
It would be very unusual for a married parent who may have concluded their own claims under the MCA 1973 to then contemplate further action under schedule 1 for Orders to benefit the children. Particularly as the court would have been invited under the MCA 1973 to consider the welfare of the child. This is a theoretical application really, because after, parents go through financial remedy case to then commence under schedule 1.
So, how does the court exercise its powers?
The court shall have regard to all the circumstances including:
- The income, earning capacity, property or other financial resources which each person (applicant, respondent) has or is likely to have in the foreseeable future;
- The financial needs, obligations and responsibilities that each person has or is likely to have in the foreseeable future;
- Financial needs of the child;
- The income, earning capacity (if any), property and other financial resources of the child;
- Any physical or mental disability of the child;
- The manner in which the child was being or expected to be, educated or trained.
The Order needs to be proportionate and reasonable in approach.
Approach can be applied to lower budget cases, when looking at what’s reasonable.
If you are therefore unsure what type of Order to apply for concerning financial needs when separating from a partner or spouse, please do book a free 20 minute consultation to come and see us so we can assist you with this big decision.
By Suezanne King