Financially, what are the advantages of NOT being married if have always worked?

[Tinker]

Following on from the "is my dh entitled to half?" thread can someone clarify what are the advantages of staying unmarried when:

I put down the substantial deposit for our house. Legally, have had documents drawn up to protect that should we split but if we married, would these become meaningless and all money goes into the pot and is up for grabs?

Secondly, if I were to then receive further money via an inheritance, should I marry, would this also become up for negotiation? Is it protected whilst unmarried? What if it was invested in this house - would we need to draw up a further document stating that? Would that again be revoked upon any marriage? What if it just stayed in a bank account - how would that be treated?

Have no intention of getting married and partner would now, no doubt, stated he wouldn't consider anything underhand anyway should we split but I'm also not a romantic fool.

Any advice? Thanks

Tinks, am no expert but I'm fairly sure that if you're married it'll all go into one pot as joint assets and yes, he would be entitled to half of everything if you split so yes to both questions. Xenia will be along in a minute I hope.

Tinker,

Whilst you are unmarried no court has any jurisdiction to redistribute your assets, only to declare who owns what. Sometimes declaring who owns what is tricky but if you have properly drawn up declaration of trust (I guess these are the legal documents you refer to - I imagine you are tenants in common) then they will be followed. If you pay a substantial amount of the mortgage off with inheritance money then you should have a new declaration of trust drawn up to reflect that otherwise the existing clear legal documents will be enforced. If it just stays in the bank the question will be whose money you intended it to be. If it's just in your name that is easy but if it is in joint names there could be an argument that it's both of yours. I.e. if you are not married then you can protect your assets if you take some care.

The only caveat is that the law commission are currently drawing up proposals that would allow the courts to redistribute assets when cohabitants split. At the moment it looks as if these won't apply to all couples (will apply to those with kids), will be more limited than divorce law (no 50:50) and will allow you to sign a register opting out of the law before the split.

If you marry then things become more complicated. The court has discretion so all your assets will be potentially 'in the pot' for redistributoin. Whether they would actually be redistributed depends on the circs. If you have a short marriage (under c6 yrs) with no kids then you'll probably get roughly what you put in provided that both of you can provide for yourselves. If you have kids/longer marriage it's more tricky. Essentially the courts' first concern is to make provision for the kids, then the needs of both of you. If they can all be satisfied then the starting point is that the rest goes 50:50 but there is a lot of discretion to depart from this e.g. your inheritance would be a reason to give your more, one party looking after the kids for years and losing career prospects would be a reason for them getting more etc. It's diffult to predict. People talk about being 'entitled' to half but it's not as simple as that - it's about what the court thinks is 'fair' taking 50:50 to start.

Whether you'd be better off getting married depends on your circs. Essentially if you are the wealthy party then you risk losing a substantial portion of your assets if you divorce. If you are dependent on your partner then you have more security. There are also other advantages of marriage e.g. tax advantages for IHT and CGT. There is no one answet to what would be better.

Sorry for the long post! Just read it back and realised how long it is!

Sorry third para should say 'the court has discretion to redistribute any of your assets so all of your assets will be potentially 'in the pot' for redistribution'. (There are no categories of assets immune from this).

Of course a pre-nup can help but won't be enforced and is generally most useful in short marriage, no kids cases.

tinker -one for xenia I think your cohabitation agreement (for want of better word) is likely to become void if you marry (that was what I was told when I made mine with an ex). I think once you marry the rules that were discussed on the previous thread mentioned (ie 50.50 rule etc) start to apply (no matter what situation was). In particular there is something about ignoring legal ownership of your home and presuming its a joint asset ( but xenia or others more likely to know more here)

Re inherited money that is again a grey area but I think that whilst unmarried it is yours and I think there is a strong argument to exclude it from any marital pot but that is something that I don't think is in black and white anywhere. So it would be a good idea to draw up the document saying that although again although indicative of what your intentions were in funding your home it may not be something the court is forced to accept. Probably a question for whoever drew up your cohabitation agreement.

Yes, any cohabitation agreement you draw up would not be enforceable should you marry and divorce (although it might be taken into account). It's not 100% clear that cohabitation agreements are enforceable in English law anyway but it is very likely that they are provided that you can show sufficient 'intention to create legal relations' - if you have both been legally advised prior to signing a document that purports to be enforceable that should be OK.

By the way, are you in England/Wales? The rules on all of this are different in Scotland and N. Ireland.

Oh, thank you everyone. Am in England and, yes, was referring to a declaration of trust (couldn't remember precise name when posting). So, no real incentives to get married then, that I can see atm.

Tinker,

From what you've said there are no real incentives on the legal side if you are (a) the wealthier party and (b) ensure that everything is organised so that it is clear legally (e.g. get the declaration of trust amended if you do pay off a substantial chunk of the mortgage) (c) have a legal interest in the house (this affects your entitlement to live there and ability to ge the other person excluded if necessary).

You should make sure that you both have wills as the laws of intestacy won't benefit you at all if you're not married (married people should make them too but it's esp important if unmarried). There are also tax disadvantages to not being married (IHT and CGT especially). Marriage would be financially beneficial if you became dependent in the future e.g. through illness or giving up work.

Hope that splitting up will never be an issue but do get everything settled in writing just in case - makes the process much cheaper and easier.

i dont think there are any
I have been eith dp 16/17 years not married and i am very happy

legally its bolleaux though

There is one area where being married is an advantage over cohabiting and that is inheritance tax. As a spouse you can pass your assets free of inheritance tax under the spousal exemption rule. In other words if you die married, your spouse can inherit everything you own, free of inheritance tax, however much it is (it is sensible also to "use up" the dying spouse's nil rate band on the first death). If you cohabit your assets over the nil rate band (I think it is £300, 000 for this tax year) will be taxed at 40%. With house prices the way they are, the number of people being caught by this is increasing. And our chancellor is closing all avenues for circumventing the legislation, by clamping down on the use of trusts and introducing pre owned asset tax etc.

FioFio, your mother's partner would not be entitled to 50% of the assets. There is no automatic 50:50 split in English law and if they are older and childless then it is likely that, were they to marry and divorce, they would largely take away what they came to the marriage with and would split what was made during the marriage. There seems to be a fallacy that each partner is 'entitled' to half of the assets in English law but it's not true, it's just a starting point and only in cases with large amounts of money available to meet the needs of the parties/children.

Having said that, she can be far more sure that she would get to keep the assets if she is not married and makes sure that all is documented properly so the only disadvantages of being cohabitants would probably be the tax ones.

FioFio - have just looked at your post again - if he contributes financially to the property and it's worth a bit of money then she really must make sure that everything is agreed in legally enforceable terms. If not he could claim a constructive trust or proprietary estoppel over the property and that is far more complex a claim than a divorce claim. She must make sure that BOTH of them have clearly acknowledged that there is no intention for him to have any kind of financial interest in the property. It'snot just as simple as saying 'because they aren't married he's not entitled to anything'.

If he lives there and has a tenancy agreement - her assets will be safe.

Where do you and your partner work and do either of you have a pension from your employer? This is one area where not being married can be a real disadvantage.

I've lived with my dp for nearly 9 years, in this house since Nov 98. The house is in my name and dp had to sign away his rights when I remortgaged. I put down a 26% deposit (£20,500 of £80,000) when we bought - thanks to my mum whose money it really was. I'm not bothered about getting married from a romantic point of view, and dp has some rather worrying debt history.

However, we've just had a baby and I would actually like my partner to have more security should something happen to me - want to be sure he would be able to stay in the house and look after baby/ies. Our house has gone up in value, I have substantial savings and life insurance, and current employment/pension terms include death in service grant (payable to any nominated person including cohabitee or spouse) but also widow/ers' pension only payable to spouse. So inheritance tax and legal rights would be positive reasons for us to marry.

Dp also works in local govt and marrying him would mean I would be entitled to a widow's pension in that terrifying scenario. So those things to me are reasons to get married, perhaps.

It's a complicated question in these terms which just depends so much on each person's circumstances, and it can change over time, it has for us.

Thanks for the further posts.

Yes, we have had wills drawn up clarifying exactly what will happen upon either of our deaths (had to since have a child together and I already has a daughter)

I have a pension, he doesn't.

Re IHT, my "estate" (I'm not wealthy, btw, but trying to cover all bases, as it were) would have to be over £300k. So, the house (if just used house for ease) would have to = £600k+? Fortunately, nowhere near that. Now, if I amended my will so that all monies excluding the house, were put in trust for my children, and my partner just inherits my half of the house, IHT wouldn't be applicable. Or would it? It would if the total of my estate exceeded £300k regardless of who is left what?

This may not be relevant to you, and it looks like you have already had your specific questions answered, but it was a bit of a shock to me after we got married to discover that we could officially not have two places of residence (we work in different cities and both owned houses) so one of our houses would be classed as a second home and we'd therefore be liable for loads more council tax.

I didn't move in with dh till my maternity leave started so for the first few months of marriage one of us must have been officially living somewhere where we didn't actually live according to that.

Kathyis6incheshigh, not only that but as a married couple you can only have one principal private residence so when you come to sell the property that is not your prinicipal private residence it will be subject to Capital Gains Tax.

Caroline - yes! hence have already sold it before it became liable for that