Relationship break-ups: Slicing the pie

by Linda Sanders / 21 March, 2013
Don’t assume you know what you might be entitled to if your relationship ends.
Relationship break-up
Photo/Getty Images

Relationship break-ups are tough enough. Dealing with how to split the property and other assets owned by the partners can add a major headache to the heartache. Relationship breakdown is a fact of life. A third of marriages end before their 25th anniversary; relationship breakdowns of unmarried partners are likely to be as prevalent.

Chances are those partners will form another long-term relationship later in life. By then, they will probably have amassed considerable assets, including offspring, with blended families being very much the norm.

If a couple break up after, say, 20 years of living together and they both started off with few assets, then divvying things up is reasonably straightforward, you’d think. But it’s not really.

How does it work if one comes from a wealthy family and is left an inheritance? And what’s the situation with a family business or farm?

What about where one partner is the prime earner and the other had the unpaid job of managing the family and their assets, interests and hobbies? If the main earner continues to generate a substantial income, while the family manager has fewer saleable skills or experience and none of the workforce contacts, is it fair for assets to be split evenly when the relationship breaks up?

And how do you deal with a partner’s assets held in a trust? What access does the other partner have?

There are other situations such as later in life when partners might bring differing levels of assets or income to a relationship. Or they might have children who expect first dibs on their parent’s assets if the new relationship ends or the parent dies.

What happens if the relationship doesn’t endure, but lasts long enough to fall into the ambit of the Property Relationships Act 1976 – generally three years.

The Act aims to be fair to both parties but plenty of situations end up in court because the legislation does not fully anticipate every eventuality.

As an aside, it’s worth remembering this was groundbreaking legislation when it came into effect at the height of the women’s liberation movement. Back then, equal pay was not the norm and women often suffered financially when marriages ended.

The hardest part when broaching this subject with your partner is confronting the possibility of a relationship break-up. If the relationship is strong, you can’t contemplate the worst happening. If it’s a bit wobbly, you may think raising such issues will only increase the fragility. But if you haven’t talked about it, it really is time to do so.

First, you should think about your situation and how you would each be affected if the relationship ended. Ask yourself what would be fair in terms of dividing assets and test it with your partner. For example, does s/he assume you would not have rights to a share of the family business?

Don’t assume you know your rights or what you might be entitled to retain if you split up. There have been some interesting court decisions on how assets are apportioned.

For example, Citizens Advice Bureau notes separate property – all that is not relationship property – stays with the person who owns it. This includes gifts and inheritances received while together – unless you, for example, used an inheritance from your father to pay off the mortgage on the family house. There’s plenty of room for interpretation.

Swot up online on your basic rights, and have a chat with a lawyer specialising in family issues or a community law office or Citizens Advice Bureau.

You can opt out of the Act and other laws with a separate agreement or some kind of “prenuptial”. In that case, you each need to get legal advice and a lawyer must witness the resulting document. And like any documents, they should be reviewed occasionally, especially when things change, such as the joint purchase of a house, the status of dependants or business involvements.

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