Marriage and property ownership - advice please

[LawrenceDallaglio]

Hi. I?m looking for some advice and opinions please.

Neither my partner nor I want to get married but I am swayed by the arguments I?ve read on here as to the legal benefits of being married both to each other and to our 2 year old son should one of us die.

However, I?m not sure that marriage is in my interests (financially).

Background:

At the moment we are living in my home. It?s mortgaged but there?s substantial equity. I also have some savings which would be enough to cover all moving costs.

My partner pays me nominal ?rent? to cover things like increased utilities, not having the 25% single person Council Tax discount etc? and he also pays half of our son?s nursery bill and half of the food bill.

He has credit card debts which he?s reducing by paying off more than the minimum each month and moving the debt between 0% companies. He no longer uses a credit card so the debt isn?t accruing. He has managed to pay off his overdraft and is staying in credit on his current account. He has no property and so no equity.

We are looking at selling my house and buying a house between us. The idea is that we would use the equity from my house and then split the mortgage 50/50. We would be tenants in kind and I would own the larger percentage of the property to reflect the greater financial commitment and also that I haven?t been charging him proper rent so that he can pay off his debt (it would be in the region of 75% mine, 25% his).

I currently have a will which leaves everything to my son in trust until his 18th birthday.

My partner has a child from a previous marriage for whom he pays 15% of his salary. There is also an agreement where he has to pay 5p per year to his ex in case she wants to go back to court and claim maintenance, and this has 3 years still remaining before it expires.

We both work full time and earn good salaries.

Our plan is that once we?ve bought a house we will write wills. Mine will leave my 75% to my son and his will leave his 25% shared between both his children. Our separate life insurances would pay off our share of the mortgage and we could stay in the property until we either find a new partner or we die.

So my question is whether it is in mine and my son?s interest to get married? For example, if I get married would I automatically lose the greater share of the house as it would be the ?marital home? and he could claim 50% if we split up? Would his ex-wife have any claim on my property or my income if my partner were to die? (I?m thinking would I have to take over his child maintenance payments or buy her out of her child?s share of the property). Would I have any responsibility to pay off his credit card debt if we were married?

Are there any inheritance tax, or other issues with being tenants in kind that I haven?t considered?

Any advice would be very gratefully received - I can?t decide whether I need a solicitor or a financial adviser!

I?m sure these issues must be common with second families but I just can?t get my head around it.

Thanks in advance
LD

His ex-wife will have no claim on your property or income if he were to die, regardless of whether or not you are married. Her child is another matter given the wills you are planning on writing.

If you write wills in the terms you are proposing, should one of you die it may be necessary for the survivor to sell the house in order to provide the children with their share of the estate.

Should he die you will have to pay off his credit card debt regardless of whether or not you are married. The debt will come out of his estate. His portion of the house will be part of his estate.

All marital property is assumed to be owned equally by both partners. However, that doesn't necessarily mean you are losing anything by getting married. Whatever split you agree when you buy the house, the courts may decide that it has to be split 50/50 should you separate.

Marrying will probably improve your IHT position. It will ensure you have the right to determine the funeral arrangements should your partner die. It will ensure you will inherit from your partner if he dies before getting round to making a will. There is plenty more on other threads about the benefits of getting married.

Thank you prh47bridge.

I hadn't realised that the courts could award him half the house if we split despite not being married. I had assumed that if we split we would sell the house and split any equity along the agreed lines, or I would buy him out. If necessary I would then buy another property for my son and I.

It sounds as though I need to remain single and not even think about buying property with him!

I had hoped that we would be able to have the documents drawn up legally, including the wills, to allow each other the right to live in the property should the other die and the beneficiaries of his, or my, estate not be able to sell until after the death of the other partner. I thought that was quite usual but I guess not if we are tenants in kind rather than tenants in common.

I understand your point about the credit card debt being paid off from his estate. Hopefully this won't be an issue anyway as I'm working on getting him debt free by Christmas!

Reading threads on here about the benefits of getting married is the only reason I am even considering marriage.

Thank you for your advice, I appreciate it.

Yes, you can sort out the wills but you need to take advice. Basically you need to give each other a life interest in the property.

Not buying a property with him may not help you, I'm afraid. It may be too late for that already! He is living with you. If you split up he may therefore have a claim to part of your assets including your home. There is no way of knowing for sure until the courts decide (which I hope won't be necessary).

Personally I would recommend marriage. Sadly I know a number of people who have remained unmarried and have been thoroughly upset at what happened when their partner died, and I'm not just referring to the financial arrangements. One relative found that she was excluded from her partner's funeral completely, much to her surprise and distress.

Not wanting to overstate the case I should point out that I said he "could" get half the house and that it "may" be too late. It may be that the courts would go with whatever split you put when you bought the house and it may also be that the courts would decide he doesn't have any claim on your current property. But the courts do now provide some protection for unmarried couples and that sometimes involves ignoring what the couple agreed when they bought their property.

If you aren't going to get married and are worried about the financial implications you really ought to see a solicitor.

Thanks again prh47bridge - sage advice.

It shows how naive I am about these things.

It's rather shocking to find out that someone who has never contributed towards a property, and isn't on the deeds or the mortgage, could have any claim, particularly as he earns more than me and our son's main residence would be with me and not with him if we split. If he was awarded any part of my house it would effectively make my son homeless as I would have to sell. I can't see the logic of this. Surely a child's interests are those that the court should be looking to protect not an adult who is perfectly capable of looking after himself financially. I realise from what you say that this is not a definate outcome but it's given me pause for thought none the less.

I can see that I should get legal advice sooner rather than later.

Yes, the child's interests are always paramount. The outcome depends on the details of the case. Your partner's "rent" may be regarded by the courts as a contribution towards the property and, whatever he says now, he may fight you for residence of your son should you split. His financial situation may also have changed by the time of any split. Given what you have now said about his income I think there is a good chance that he would not have a claim on your property but I hesitate to say that outright, partly because I don't know all the details and partly because it isn't always easy to predict what the courts will decide.

He earns about 20% more than me gross but as he pays 15% child support for his first child we end up with about the same.

I realise I am coming across as totally money orientated, but my sole concern is that if I die before my son is out of education that I have enough in my estate to ensure that he is supported.

I don't doubt that my partner would be a very loving and devoted single parent but he doesn't have a great financial track record and I want to make sure (as far as I can) that my money gets to my son without having been frittered away by my partner.

It seems that if we were married and I were to die my partner would just inherit automatically and could just put all the money on a horse and nobody could do anything to stop him (he's not a gambler but you take my point). At least if we aren't married it would be my executors who decide how the estate would be spent and that would have to be to the benefit of my son.

Seeing it written down makes me sound totally paranoid! I promise I'm not.

I will make an appointment with the solicitor who drew up my will and will explain the position to her and take her advice.

Thanks again prh47bridge.

I understand where you are coming from.

If you marry it invalidates your current will but it doesn't stop you making a new will. He won't inherit automatically unless you die intestate or give everything to him in your will. So even within a framework of being married it will be possible to protect your son. Indeed, you may find that with the right arrangements in place he is better protected if you are married than if you aren't.

Does the solicitor who drew up your will specialise in family law? If not, you may want to find someone who does and consult them.

Okay, so it sounds as though I plan the day as follows:

12pm Complete on house purchase
2pm Registry office for marriage
3pm Solicitors appointment to draw up new wills

I see that I have more options than I initially realised, and that marriage perhaps doesn't have the drawbacks that I had thought it would have and may actually benefit my son. I've also learnt that I cannot guarantee certain aspects which I had thought that I would be able to control (e.g. split of property share)

I'm not sure whether the solicitor specialises in family law but I know that the company has a family law department so I hope that if I explain the position and what I hope to achieve she will be able to recommend a colleague if she feels it's outside of her area of expertise.

Thanks again. You've shattered my preconceptions and given me a lot to think about, and to talk over with my partner.

Forgetting about marriage for a moment,
I don't think a cohabitee has any automatic share in a property if the property is SOLELY in the name of their partner and they are NOT contributing towards mortgage.

Unless they can prove- and the onus is on THEM, remember- they have contributed somehow to the property financially, they won't usually get a share.

Buying food, looking after children, and household goods will not be taken into account by the courts.

This is why the courts will not take into account childcare undertaken by a woman as something that can be used as a bargaining tool to gain her a share in her partner's property should they split.

Marriage is a different ballgame because the couple legally declared themselves to be a couple and the courts will treat them as such should they split.

It's hard to get your head around this sort of thing but as long as you remember that, legally, (although of course not emotionally) cohabitees are strangers and, if they split up/die, they'll usually be treated as such I think you'll have a good understanding of the situation.
If you split up the general rule is that each of you will take what you brought to the relationship.

Of course, if there are purchases bought jointly then these will be divided jointly but this is just the same as any business arrangement i.e. the actual interpersonal relationship between the couple is not relevant.

(Mucking about with the law as it stands is not in my opinion good because it will make every cohabitee quasi-married and not every cohabitee wants that. It would take away freedom of choice).

When a couple marry they are legally letting it be known that they are (sorry about the word) a "Unit" therefore should they split up the courts will take into account activities taken i.e. undertaking of childcare that would have benefitted the unit as a whole should it come to divvying up property.

Marriage is tailor-made for people who wish to be in a long-term committed relationship and, if you are in such a relationship, I say go for it.

As things stand with your partner, i.e. him paying you "rent" and buying food I don't think that, hypothetically speaking of course, he'd have a cats-in-hell chance of a share of your property should you split.

After all, lodgers pay rent and they're not entitled to claim a share of their landlord's property, are they?

Of course the difference between a lodger and your partner is that you're in love with your partner but unless that "love" is made official via marriage the courts will deem it to be irrelevant.
They simply cannot reasonably know whether or not a couple are telling the truth about whether or not they were in a relationship without it (marriage, that is).

Marantha and Irishbird - It is true that an unmarried partner has less rights than a married one. However, although a co-habitee does not automatically get a share in a property it may still be possible for them to establish a claim in equity. There are a number of ways this can happen.

The fact that the property is in the name of one partner and they are paying the mortgage does not prevent the other partner claiming a share. If, for example, the partner who does not own the property can satisfy the court that there was an "understanding" and that they have acted on their own detriment by, for example, paying household bills or selling their own property, that may establish a claim.

Even if there is an express split laid down at the time of purchase, the courts can vary that and have done so in a number of cases. For example, in a recent case Mr S and Ms D had purchased a property together and agreed a 50/50 split at the time of purchase, but the House of Lords altered that to a 65/35 split in Ms D's favour.

LD, be aware that if you marry and subsequently split, your H would be entitled to half of your pension fund as well. Because many people are loath to touch their pension funds for obvious reasons, they end up having to sell their half of the house (or hand over more than 50%) in order to make up the difference.

I'm in the same situation and have concluded that I will not marry for just these reasons. It's horribly mercenary but I have watched 3 of my 4 close friends go through divorces that cost them their financial security.

My previous boyfriend (before DP) actually came out with the line "well once we're married, it's half mine anyway" and then wondered why he found himself out on the pavement.

Don't know if this has been mentioned but when I bought a house with my ex I had a legal document drawn up stating that in the event of a break-up I would get my percentage of the equity back. i.e I made sure that if the house price had risen it wasn't just the money I put in that I got back but the percentage of the house price. This protected my investment rather than just the basic amount I had paid.

prh47bridge -I appreciate what you say here about a cohabitee maybe having a share if they can satisfy a court about an -as you put it-"Understanding" between the couple, but in the absence of anything "On paper" in black-and-white I imagine that this would be difficult to prove.
If there is nothing on paper then it's got to be a case of "He said, She said" and I should imagine that a judge would be acting very reasonably if he were to say that, in the absence of anything written, he found it hard to make a decision and therefore would just go along with what was known- i.e. it is documented that the house is in ONE person's name then that would be what stands.

If there are documents then I can understand that if a cohabitee can show paperwork e.g. a receipt proving that he/she paid for an extension to the home that the judge might reasonably say they have an interest (but then, if a good friend could show this receipt I should imagine that they could make a claim, too. Wouldn't the presence/absence of an interpersonal sexual relationship be an irrelevancy?) in the property.

My question is this: wouldn't any provable contributions have to be directly related to the property in order for the person to have a claim on it?
Or would be buying food and looking after children be enough?

Many thanks to you all for your comments.

I've just read the summary of the Stack v Dowden ruling and found it comparable. The only difference is the addition of a child from a previous marriage(my partner's daughter). I'm not sure if this would make any difference? She doesn't live us, her main residence is with her mother so there isn't an issue of making a child homeless if my partner and I split and he moves out.

I'll also explore the express declaration of trust behind the title that you talk about irishbird. I'll need to find out if this can be enforced after marriage and whether it only applies to tenants in kind. Thank you, I will do some reading up.

Kathyjelly - we both have our own pensions with our respective employers and they're probably of comparable value so I don't think we would be looking to make claims on each others pensions should we split but thank you for bringing it to my attention.

Duelling Fanjo - the agreement you had with your ex is exectly the sort of arrangement I had in mind.

Marantha - I've been very careful not to let him pay for anything for my house. Obsessively so actually as I wouldn't even let him buy paint brushes and white spririt when I decorated recently. There is no way he could say that he contributed to the value of the house in any way. I dont even let him mow the lawns or contribute toward the cleaner's bill!

What I had in mind was something along the lines of an agreement whereby we buy a house jointly but with the 75/25 split declared. We have a joint mortgage for the rest.

Each month we each pay 50% of the mortgage, and other house bills, into a joint account but maintain our own accounts and savings for the rest of our salaries. That way it is easy to see that equal contributions have been made to the mortgage.

We will each have life insurance to cover our half of the mortgage value so that our half of the mortgage is paid off should we die. The other partner will continue to pay their half of the mortgage until it?s cleared.

We will have wills which allow the other to remain in the property, as prh47bridge says a life interest, and then on the death of both owners the property gets handed down to the beneficiaries of our estate. This would mean that our son would inherit my 75% plus 12.5% of his father?s. My step-daughter would inherit 12.5% as half of her father?s interest. (It?s important to me that should my partner have any other children the proportion of the percentage that my son and step-daughter would inherit from their father would decrease but it would not affect the percentage that my son would inherit from my proportion of the house ? if that makes sense).

What I don?t want is for my son to find himself homeless because we?ve mucked something up and the death of one partner has meant that the property has to be sold either because they can?t afford to keep it or because the executors need to sell it to fulfil the terms of the will/s.

I suppose my initial enquiry was to try and understand whether this would be more easily achieved if my partner and I were to marry. It seems to me that it is going to require some detailed legal work either way.

Does anyone know what would happen if we buy a property and specify a declaration of trust with the Land Registry whilst single but then subsequently marry. Would the declaration of trust automatically be voided, as a will would be, or would it have to be tested in court either as a result of a divorce or perhaps by someone challenging the terms of either will?

It does help irishbird, thanks.

Basically if I want to retain financial independence I can't get married.

Excellent. At last a reason my mother will understand as to why I'm not going to get married.

A friend's exh died suddenly about 8 years ago, leaving his business to his son, his house to his daughter, both in their 20s,and nothing to his fiancée.

She had been living with him, and he had apparently told his children he didn't want to get married again and my friend thought he was engaged just so he could 'get his leg over'.

He deliberately didn't let his oh pay anything towards any bill or other household expense, as he didn't want her to have any claim on the property.

She went to a solicitor to make a claim on his estate and eventually received £80k in cash, and a car that had belonged to the business, together with it's personalised number plate.

The legal view was that, by not letting her pay her fair share of expenses he had wanted to maintain her, and that was why she was able to make a claim.

I appreciate that this woman had been left homeless by this man's death but to have a claim on his estate upheld is stunning tb.

Particularly as this man had gone out of his way to exclude the woman from his estate.

As to my personal situation, it seems that his solicitor has told him that once he's lived in my house for two year he can claim against it if we were to split up. From the advice I've been given above I think this is incorrect and there is no set period of time but it has worried me.

We are going to sign a Lodger's Agreement tonight which is backdated to when he moved in. As Marantha points out earlier in the thread, lodger's have no rights over the property. Although I'm pretty sure that a lodger's agreement would hold very little weight if we were to end up in court as we have a child together which isn't the average lodger/landlord relationship I'd imagine.

Yes, but it's no surprise to me, LawrenceDallagio, tb's friend's exh probably claimed under dependent's act.

This has been an act since 1975.
A partner can claim if their partner dies intestate, however, if partner dies having made a will, I am not sure if they can apply for part of the estate if they've been excluded.

Someone answer this, please?

I think it's bulls* that his solicitor has told him that once he's lived in your house for a two years he can claim.

I don't think that purely having a sexual relationship with someone under their roof gives them right to their partner's property automatically.

(Not my business, but just a thought the very fact that he's consulted his solicitor over this does hint at goldiggerish tendencies. Obviously, you don't have to answer.)