The thorny issue of how cohabitation affects divorce settlements can differ from case to case and have long-lasting monetary and lifestyle implications on a former spouse.
In divorce proceedings, all ex-spouses are required to be open and transparent about financial disclosures (which include cohabitation) until a financial agreement or order has been agreed by a Court.
This agreement is a contract between the divorcing couple and is invariably made an order of the court.It sets out how any property, finances and spousal maintenance should be shared between them post divorce.
The Financial Order, also known as a Court Order, sets out the financial arrangements between you and your ex. Approved and issued by a Judge, it makes your termslegally binding.
Here are some examples of how living with a new partner can impact on financial settlements.
Scenario 1
The ex-husband has been the primary earner throughout the marriage while his former wife stayed at home to look after their children. He meets a new partner who owns her house and earns a good salary.
In this case a Court may considerthat the housing arrangements of the husband are resolved and may then give a more favourable view of the wife's position. It could be her entitlement to remain for a period of time in the property or to receive a more generous share on sale.
The husband will also have less housing costs (as he may be sharing these with his cohabitee) and therefore will have a greater disposable income from which to pay maintenance.
Scenario 2
A husband and his former wife have undergone divorce and a financial order has been agreed in which she receives maintenance. During the financial settlement process, his ex-spouse fails to disclose that she has been living with a younger man on a low-income.
The Court would need to be satisfied that the wife's financial situation was much improved by the cohabitee sharing housingcosts and she may risk a reduction in maintenance. If the cohabitee was earning a substantial income, this could also have an impact by a reduction in the maintenance.
Scenario 3
Complexities arise in situations where, for example, a former husband on a good salary has been cohabitating with a new partner who has four children, one of whom is disabled.
There is a conventional view that first families come first. The husband in this instance was aware of his responsibilities to his first wife and family before he embarked on a second relationship. However, in this case the Court has a difficult balancing act to satisfy the financial requirements of 2 families.
Key considerations
As an ex-spouse you must give a full and frank disclosure of yourfinancial means to your ex and vice versa right up to the point that the Court Order is approved.
If you start living with a new partner before the financial settlement is agreed or have an intention to do so after the divorce - and have not disclosed the relationship or intention while negotiations are ongoing - your settlement can be changed when it is later discovered.
The outcome could result in a change in the terms of the order and the possibility of paying the court costs.
If you are unsure of your position on cohabitation while divorcing, I urge you to seek advice from an experienced family lawyer.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
