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Living together - Sarah Pennells, SavvyWoman.co.uk

Living together & your money

So, you and your partner have found a house you both love, you’ve signed the mortgage paperwork and you’ve started redecorating it - in your in your mind, at least. But have you thought about your rights if your relationship turns sour – or worse? It’s not the cheeriest of thoughts, but many couples who live together don’t realise how few rights they have if they break up or their partner dies.

Cohabiting and what it means in law
If you live with your partner you don’t get any of the rights that married couples do. The situation is a little different if you live in Scotland, where a change in the law a few years ago gave couples the right – under limited circumstances - to make a claim against their ex partner or his or her estate if the relationship ended or the partner died without leaving a will.

In England, Wales and Northern Ireland, you won’t automatically inherit anything if your partner dies without leaving a will and you’re not entitled to a share in their money or property if you split up. Although you can go to court to make a claim, it’s a complex area of law and it can be a costly business (both financially and emotionally).

How to protect yourself
If you’re going to move in with your partner, consider drawing up a ‘living together’ agreement. It may sound a bit unromantic, but think of it as an insurance policy; you hope you don’t need it, but if you do you’ll be glad it’s there. From a practical point of view, it’s always much easier to decide what’s fair when you like each other rather than once your relationship has broken down!

You don’t have to spend a lot of money on a living together agreement as most solicitors will draw up a straightforward one for a few hundred pounds. You can limit it to what happens to your property if you split up or include how your savings and investments should be divided as well.

How you own your property
If you’re buying a property together there are two different ways you can own it and it’s important that you understand the differences between them. If you own your property is joint tenants (or with a survivorship clause, if you’re in Scotland), you each own the property equally and your half will pass to your partner when you die. You don’t have to write a will for this to happen and, in fact, even if your will says something different, it wouldn’t stop your half of the property from passing to your partner.

If you own your home as tenants in common you can say how much of the property each of you owns (e.g. 40/60 split) and your percentage will pass to whoever you leave it to in your will. Make sure that you draw up a legal document called a deed (or declaration) of trust, otherwise you’ll still be assumed to own the property 50:50 and if you have an acrimonious breakup, one of you could lose out.

Make a will
Most of us should have a will, if for no other reason than it means you can specify who will be your executor, i.e. who will deal with your financial and legal affairs after you’ve died. However, it’s even more important that couples who live together draw up a will, because they have no automatic right to inherit if their partner dies.

If you’re a member of a pension scheme, don’t assume that your partner will receive your pension if you die. By law, they may not get a penny unless you tell the pension scheme you would like them to be your ‘nominated partner’.

Sarah Pennells

SavvyWoman is the brainchild of Sarah Pennells, who's a well known personal finance journalist and broadcaster. Sarah has appeared regularly on BBC Saturday Breakfast and writes for several magazines. (photo: Simon Brown)

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