Are you thinking about proposing on Valentine’s day? Or perhaps you are considering moving in with your partner, or buying a house together?
It can be easy to get caught up in the moment and forget about legal matters but having an open and honest discussions about what happens if a breakdown should occur, is always recommended.
Make a Will
Any Will you make before getting married is automatically revoked by law the day you get married unless it makes specific reference to your intended marriage. Therefore, in most instances, to ensure that your estate is divided as you wish, you should make a new Will upon getting married.
If you choose not to make a new Will, and something were to happen, you will be treated as intestate and the law sets out who will inherit your estate.
Consider a Prenuptial agreement
A ‘prenup’ or premarital agreement is a document that sets out what will happen to a couple’s assets in the event of a divorce. It is signed before a marriage or civil partnership takes place and must be fair to both parties taking in to account their financial circumstances .
There are several things to consider when drawing up a pre-nuptial agreement including:
- Family Home – how will this be divided? Will it be sold?
- Financial – this includes any money held by an individual or both parties, including savings and investments.
- Debts – if one party builds up debts, the agreement can limit the liability of the other party.
- Children – this can include children from a previous marriage and whether they have the right to any property or assets.
- Property – this includes property jointly owned or that either party brought into the relationship.
- Inheritance/Trust – property and assets inherited during the marriage or gained from a trust.
It is usually much cheaper to negotiate and draft the document, than litigating over the division of matrimonial finances on separation. Judges in the UK generally give prenuptial agreements significant weight in proceedings and will largely seek to uphold them providing there are no issues with it, and it was drawn up and signed with the correct considerations and precautions.
It is impossible to fully predict how a judge may rule on financial settlement, so having a prenuptial agreement is a great way to avoid uncertainty.
Moving in with your partner?
Cohabitation agreements are becoming an increasingly common phenomenon, whereby couples live together on a long-term basis without ever getting married. People presume that if they have been living with a partner for a few years, they become ‘common law husband and wife’ and have the same rights as married couples. However, this is not the case, ‘common law marriage’ simply does not exist.
Married couples and civil partners enjoy significantly more legal protection than couples living together and although cohabitating couples do have more rights than they used to and things are still changing, many cohabitees leave themselves highly vulnerable should their relationship fail.
Cohabiting couples could consider making a cohabitation agreement. This sets out the financial agreements between you and your partner and protects any assets acquired before moving in together. A cohabitation agreement states that your income and assets are separate, and your debt is also separate.
Buying a house together?
Many people are unaware of the different ways you can own a house with another person.
Most of the time couples select to own a house as joint tenants. When you choose to co-own a property as joint tenants, each co-owner owns the whole of the property and neither owner has a specific or identifiable share. If you sell the property, you are each entitled to half the sale proceeds regardless of how much you contributed to the purchase price or the mortgage repayments. When you die, your half automatically becomes the other’s.
But, what if one partner has a lot more money to put into the deposit than the other? A Deed of Trust, also known as a Declaration of Trust, is a legally binding document stating the division or ownership of a property. It is used by ‘tenants in common’ who have paid different amounts into the purchase of the property. With this in place, both parties will know exactly where they stand if the property is sold, or if one person wants to be bought out in the future.
So, on this most romantic day of the year, please celebrate, but remember there are a few important factors to consider.
If you would like to discuss any points in this article further, please contact Spire Solicitors LLP on 01603 677077 for all your legal needs.