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

I mean, yes, if a person can prove they've made a financial contribution towards the upkeep of house, I can see that they would have a claim.
But, if I could prove I paid for my best friend's extension- I think I'd also have a stake in her house, too. A sexual relationship would perhaps be irrelevant?

But just having a relationship in someone else's property doesn't seem to be enough to have a share of their house.

Ah, apparently if you were to die, having lived with you for two years, he could make a claim on your estate under Inheritance act
1975, if he could show you completely or partly maintained him.
But this is obviously to do with death and not splitting up. Sorry to be morbid.

Thanks Marantha. I got the wrong end of the stick. He was told by his solicitor when he made his will, so it was in the context of death and not if we split up. My mistake.

He would have to dig very hard to find gold from me! The discussion apparently took place whilst talking about his beneficiaries and division of estate, and it was the solicitor who told him that I could possibly claim from his estate as we had lived together for more than 2 years. My partner just turned it around for the purpose of the conversation we were having.

Funny situation though, isn't it? It seems that if a cohabitee can show that they were maintained partly or wholly by their deceased partner they can make a claim of sorts against their (the late partner's) estate.

BUT splitting up and NOT having made a provable contribution to the property (apparently, contributions to childcare and household bills do not count) means they have no claim on house.

(Although I suppose a judge would argue that the deceased partner was looking after their partner financially until they died whereas a split means that the formerly 'supporting' partner obviously didn't want to continue the arrangement).

It's probably obvious to you that I'm no expert, just someone who takes a vague interest in these things, but all the info's there if you want to look it up.

Inheritance (Provision for family and dependents) Act 1975. Maybe this is what your partner's solicitor was referring to?

Thanks again Marantha.

Yes it seems like an odd situation. I wonder why/how it's ended up like this. But so much law is based on case law and precedent that I suppose it was inevitable. My fuzzy thinking being that case law regarding people co-habiting without marriage is a pretty recent concept and one that the courts are having to create their own precedents for whereas the case law regarding dying intestate, or challenging a will, has probably existed for hundreds of years in one form or another.

It makes it fascinating (I enjoy social history and law is great to read in this context) but very confusing for someone, like me, who has no understanding of the law at all.

To me a dependant is a child under 18/19 years of age in full time further education, certainly not an adult who is capable of supporting his/herself and just chooses not to. I couldn't imagine becoming financially dependant on another human being. To me it would be degrading. Its one of my main objections to marriage. The idea of a man purchasing me from my father makes me feel nauseous!

In the Act it says, 'any person partly or wholly maintained'. There's no mention that the deceased has to be in sexual relationship or even living with the deceased- so I guess it could be anyone, really.

I am neutral about marriage. I see it as a way a couple can make it explicit to the outside world that they want to be a couple.
Society has attached romance and big flouncy dresses to it, but in its purest form, I believe that is its purpose.

And it's NOT just about money. For instance, I don't think a cohabitee can register their partner's death.
I guess being someone's spouse is proof positive that a couple are in a relationship whereas cohabitation in itself has no standing because cohabitation itself ranges from casual relationships lasting a few months to full-on decades-long relationships.

Trouble is, society hasn't really the time to differentiate between all the types of cohabitation thus the marriage certificate is needed as it shows explicitly that a couple are in a relationship.
It's just easier, I think, to be married if in a long-term relationship.

I'm wrong again. Apparently, a cohabitee can register a death (cohabitee in sense of just someone sharing a house) but a relative is preferred. A cohabitee is not a relative.

What I would atually like is a Civil Partnership but that isn't an option for non-same sex partnerships. In my ideal world we could specify that we are a partnership and that we love each other but with the benefits of being able to decide for ourselves what happens to our estates on our deaths, and/or to have our specified wishes (e.g. the declaration of trust we have agreed for our shared property) to be concrete in the eyes of the law.

It seems to me that marriage is fine if you both have no 'baggage' because it just ignores everything else, calls everything joint and starts at the precept of 50/50 ownership. It just isn't realistic if ones relationship is complicated by previous relationships, monetary commitments and property ownership.

I am not sure, aren't civil partnerships bound by the same legal stuff as married heterosexual marriage?

Perhaps everything you desire can be made real with the assistance of a solicitor?

You still have the option of what happens to your estates on your deaths. Make a will.

And isn't it the case that if a cohabiting couple buy a home, they can arrange it properly with a lawyer and that the courts cannot alter the terms made in the arrangement in the event of a split?
I think it's a case of the actual 'relationship' being irrelevant IYSWIM.

For example, if it is in writing that you both own house jointly, then this will stand.

Remember that case a few months back where the cohabiting couple bought a house jointly and even though they'd been separated for SEVENTEEN years, the judge deemed the man to still be joint owner (btw, man had never made a mortgage payment!) because that's what was arranged at time of house purchase?
Well, this supports the relationship between couples who cohabit as not being relevant IYSWIM.

I mean 'not relevant' in the sense that the actual nature of the couple's relationship being relevant. I say this not to give offence to you- of course, your relationship is relevant to you and your partner but not the courts.

Sorry I posted rather hastily and before I reviewed my post.

I suppose I would just like something in law which acknowledges our partnership but without the historical legacy surrounding of marriage as a way of buying a wife. something that accepts that both parties are equal and not the responsibility or property of the other. I guess I'll have to write to my MP and suggest it (I won't hold my breath though).

It just seems that however much you legalise your arrangements - wills, deeds of trust for property, co-habitation agreements and beneficiaries specified for pensions - the courts can still come back and disregard it all. Perhaps I am just being pessimistic.

We will do as much as we can, with the aid of a solicitor, to ensure that what we want in the event of death or relationship breakdown and just hope that this is upheld should it end up in court.

Yes, the courts can disregard it, but then I suppose anything can be argued for/against by lawyers.
All you can do is make the best plans you can and hope for the best.

Would there be a way round it in setting up a limited company to own the house, and allocating shares on an interest in the equity basis?

I know similar-ish things have been done in France to get round the inheritance laws where both have dc from previous relationships.

By the way ld, my friend's exh's fiancée had kept her own house while moving into his, so she did very well, but obviously not on the Heather Mills scale.