When Kirsty Armstrong suddenly lost her mother Sharon, she never suspected she would have to fight for her inheritance.
Sharon Rate, who died after a diabetes-related illness, had always made it clear that she wanted her assets and belongings, including her four-bedroom home in Sunderland, to go to her three children – Kirsty and her siblings, Sarah Pilton and John Hammerberg, they claim.
But after her death aged 53, Sharon’s partner of eight years Jason Stewart refused to leave the home, sparking a ruinous legal battle that would cost the siblings £260,000 and months of intense stress.
Sharon was not married to Jason, a forklift driver, when she died. Couples who aren’t married but who live together typically have fewer protections, but in Jason’s case this didn’t apply because he was able to make use of a loophole in inheritance laws to claim ownership of the home.
Sharon had not specified her wishes in a will, leading to confusion after her death.
But surprisingly, this was not the biggest financial mistake she made. The big lesson from the case is that their mother should have signed a cohabitation agreement with Jason.
Had Sharon left all her belongings to her children in a will, Jason would still have been able to claim ownership of the house under the terms of the 1975 Inheritance Act. However, if the couple had signed a cohabitation agreement that specifically stated Jason would not receive any part of the home, then Sharon’s children could have used that.
The home at the centre of the dispute between Sharon Rate’s children and her partner
What exactly is a cohabitation agreement?
IT MIGHT be tempting to dismiss this as a niche problem, but the numbers of cohabiting couples have soared by 144 per cent between 1996 and 2022.
This family type is the fastest growing in the UK with about 6.5million people living with their partner, but not married or in a civil partnership, in 2024.
But a lack of a formal agreement can leave couples exposed with little protection if they split up or one dies.
Lawyers have long urged unmarried couples who live together to draw up what is known as a ‘cohabitation agreement’, a contract that sets out the terms of a relationship and addresses what happens if the relationship ends. It can cover what will happen with property and financial support, such as who pays what and for how long. This can prove critical if the will is challenged.
Couples are being warned that cohabitation agreements are not a luxury but a necessity to avoid family relationships turning sour.
A will only takes effect after the death of a partner, and deals with inheritance, and not how property, finances, and responsibilities are handled during the relationship and after it ends.
Kirsty, 34, told The Mail on Sunday: ‘Every day we wish that our Mam had done a cohabitation agreement. This allows you to get everything in place to protect whatever it is that you want to give to your kids. We are not millionaires, and our mother worked so hard to get that house. When she was alive, she was so proud and happy that she knew her children were going to get that house.
‘But now we are barely going to benefit from it. It has been horrific.’
Sharon Rate died in 2023 after a diabetes-related illness
Kirsty, left, and Sarah believe their mother intended to leave them the house
In a cohabitation agreement, Sharon could have made an express declaration that Jason had no ownership rights to the property.
When Sharon began a relationship with Jason in 2015 she bought a house for them both to live in Sunderland, which they moved into one year later. He then contributed towards the mortgage.
When Sharon died unexpectedly in September 2023 the house was valued at £130,000. Sharon’s daughter Sarah says: ‘Jason said the house was the only leverage he had and he was not going to let us into the house until we agreed to give him a big sum of money.
‘When he changed the locks that is when we sent him a legal letter and eventually a formal notice to quit.’
In January last year, the children, represented by Irwin Mitchell solicitors, served Jason notice to quit, with a deadline of April.
This is a legal notice to end a tenancy and state that you want the property back.
However, Jason refused to leave the house and so was served with a ‘possession notice’, which is a legal document homeowners can use to start eviction proceedings. He did not respond to this either, according to court documents. That summer, he used a loophole in the law to try to stake his claim on the home. He sent Sharon’s children a Letter of Claim, under the Inheritance Act, claiming that Sharon had helped support him financially, making him a ‘maintained person’.
A maintained person is someone who was financially supported by the deceased immediately before their death.
They are eligible to claim a share of the estate if they were not reasonably provided for in the will.
Jason also asked for 90 to 95 per cent of the estate’s total value, which largely rested in the house – amounting to about £120,000.
A game of legal cat and mouse ensued, with the children offering £60,000 to settle the matter but Jason rejected this and in June this year they went to court.
It was only by taking his claim for maintenance to court that it was rejected, with the judge criticising his lack of evidence and giving him two months to vacate the property.
Jason was also ordered to cover the vast bulk of the legal costs, which had spiralled to £260,000.
But Kirsty says that to some extent this was a pyrrhic victory because he was penniless and on a no-win-no-fee agreement.
Jason was in a relationship with Sharon for eight years, but they never married
The siblings have seen most of their mother’s estate wiped out and they will only receive some of the proceeds from the sale of the house, they say.
Kirsty says: ‘It has been a very emotional, frustrating process. We have hit points where you think “God, I just want to walk away.”
‘It is not something that we had brought upon ourselves, but we felt we had no choice but to fight it.’
Jason’s lawyers have declined to comment.
Kirsty’s family is far from the only one facing an inheritance nightmare because of a lack of a cohabitation agreement.
In one high-profile case that set new standards for other rulings, Jayne Hathway successfully fought her former partner Lee Hudson’s claim on their old family home.
Jayne and Lee, a financial services manager, started their relationship in 1990, had two sons, and bought a home called Picnic House together in 2007.
However, they never married nor specified who owned what share of the home. In 2009, Lee left Jayne for another woman, who he subsequently married.
He then renounced by email his claim to Picnic House, where Jayne remained with their two sons. By way of return, Jayne gave up her claim to parts of his investments and pension. But when Lee split from his new wife, he reversed his position and in 2019 launched a legal action to secure a share in Picnic House. However, he lost in court because the judge ruled that a constructive trust – effectively a legal remedy used by the courts to deal with unfair situations – existed between the couple. This was because Jayne could point to a detrimental reliance – where one party gives up something in response to a promise – in this case giving up her financial claims in return for the property.
The High Court and Court of Appeal not only upheld this finding but in a legal landmark ruled that emails with typed names can constitute a signed declaration of trust, establishing a first for property ownership disputes.
But this doesn’t mean you should rely on email correspondence as a form of proof. Where possible, it is important to put a formal agreement into writing to avoid finding yourself in a position where you have to take your case to court.
Here are our five tips from Richard Shaw, senior associate in family law at Irwin Mitchell, to make your cohabitation agreement watertight:
l Think carefully about what you want to achieve. Are you looking to protect your initial interest in a property? For example, did you own the house already when your partner moved in, or were you the one who paid the entire deposit?
You may want the share of the house you each own to change over time, for example as a result of one of you paying more towards the mortgage or on renovations. Or, you might have a financial arrangement in your relationship where one of you pays the mortgage and the other pays for day-to-day expenses. In this case, you may want your contributions to the family to be reflected in the shared ownership of the home.
Consider what you would want to happen if your relationship comes to an end. It is a good idea to discuss this with a solicitor.
l Keep it simple. The more complex the agreement is at the start, the more it will cost to produce an agreement that encapsulates this and the more there will be to untangle.
Don’t make a rod for your own back by having to keep extensive records to prove the basis of the agreement in the future – when there may be conflict between you and your partner.
l Be prepared to compromise. There is always an element of compromise in agreeing to a cohabitation agreement. These are voluntary documents. Therefore, make sure you are clear on the key things you want to be included in the agreement and don’t get bogged down in trying to negotiate less important details.
l Avoid DIY templates and AI- generated agreements. Always consider that, if done properly, these are binding documents which are unique to each set of circumstances.
It is therefore important that you get expert independent legal advice. Getting advice not only ensures that the agreement achieves your aims but also guards against future challenges to the agreement.
An agreement can be challenged if it is found to have been signed under duress or undue influence, which is when someone uses a position of trust or power to pressure another party.
l A cohabitation agreement deals with what happens when cohabitees are alive and it can provide some evidence posthumously.
But don’t forget a will is required to deal with assets on death.