Do I need to get married?

[JG24]

As per the title really. In my situation do I need to get married...(For my sake not my partner's)
Age 35. I earn £55k. He earns £38k
Both work full time
My wages likely to increase and finish at a higher wage than his
Own a house together
Savings £30k between us
Pensions currently £50k between us and again mine likely to increase more than his
Unlikely to receive much inheritance (potentially nothing or max £100k each)
Have a 3 year old
Wills done leaving everything to each other.
Currently doing LPOA for each other

So is there any reason to get married ATM? And if not now at what point would we need to?

Honestly no, from your point of view not really.

@Mrsttcno1 thanks. Thought not but just wanted to make sure I wasn't missing anything!

Marriage favours the financially weaker partner. When this is the woman, who se career is impacted by having children and being the go to parent, then marriage is an important protection.

In your situation, as the financially better off partner, there is nothing to be gained from getting married at this point.

I would encourage you to not try and become superwoman, who can earn more and do the majority of household and parenting work.

For the roumance

As it stands, no.

How is your joint house ownership arranged?

Do you have life insurance / income protection in case you can't work because of illness etc.? Are you planning to have more children?

@GinForBreakfast
We're joint tenants.
We've got insurance that covers if one of us dies or long term sick. It's definitely not as high as it needs to be - definitely one to take a look at

@GinForBreakfast and definitely no more children!

Inheritance tax! If you want to leave assets to him and you are not married you only have a tax free Nil rate band of £325k. From 2027 the value of your estate will also include the value of most pension pots. So with an house and a pension pot you may easily be over this threshold. anything above that taxed at 40%.

if you are married there is no IHT on a gift to a spouse. If you want to ensure your assets pass to your kids (and not get diverted to a future spouse/ care fees/ bankruptcy) you could leave on a life interest trust for him. This would qualify for the as an exempt gift to a spouse for the purpose of the ‘transferable nil rate band’ so on his later death there would be £650k NRB. Plus if house left to kids additional £175k residence NRB also transferable so £350k here added together £1m tax free.

House would need to be owned as tenants in common (so passes under the terms of your will and not automatically by survivorship) if you wanted the life interest trust.

If you become seriously unwell, who do you want making life and death decisions for you in hospital?

Apologies I should have said - house worth about £350k and mortgaged £215k
Mortgage gets paid off on one of our deaths
So no way near inheritance tax thresholds yet. If we ever get there this is the point we'd look at marriage/civil partnership

My partner so we're currently doing Lasting power of attorney which I thought has more power than marriage?

Why are you leaving everything to each other and nothing to your child? I respect that the child is very young now, but if you were to sadly die young, your partner might find a new partner and leave everything to them.

Ok, you actually aren’t far off paying IHT on second death though. Survivor would have £325 NRB plus £175 RNRB if house to child. So £500k. You have house £350k (would be mortgage free on second death as insurance paid it off on first death) pensions £50k, savings £30k = £430k. Plus by the time you die house and pensions worth more. Other assets car, jewellery, inheritance etc, etc you aren’t far off £500k. If married and transferable allowance £1m tax free.

Inheritance tax. You’re massively decreasing the amount you can leave tax free to your children otherwise.

Paperwork. It’s hard enough dealing with companies when your legal spouse dies.

You may not always be the higher earner. People get sick etc Marriage helps protect your rights to the house and pensions, savings etc

I was going to mention IHT but I see it's already well covered.

"My partner so we're currently doing Lasting power of attorney which I thought has more power than marriage?"

Well, similar to marriage.

So are you doing two different power of attorneys and giving the financial responsibility to someone else, and yet the health side to your partner?

It's just that you are giving him the power to pull the plug on you and make serious health decisions if you are incapable of doing so, but yet you don't want him to have half of your money?

It's just a bit a a dichotomy, sorry.

I was wondering this. In the event of the OP’s death, her child could end up with nothing if her partner marries and predeceases his wife. And vice versa.

You don't have to be married for that. A relative of mine had cancer and sadly passed away.

All the comms with the medical staff and decisions were with her long term partner not her parents/siblings etc. I don't think they had a LPA either, her death was quite quick (about 6 months from diagnosis) it was never mentioned and I'm not sure they'd have had time to set it up.

Plus if they'd have wanted to put that sort of protection in place it would have been quicker, easier and cheaper to just go to the Register Office and get married, which they didn't.

IHT is only a consideration above the threshold, the OP hasn't said if her house and pension are worth that much, it's not a given.

We certainly don't have that much. Our house is worth £200k at most, DP has under £50k in his pension and mine is DB so dies with me.

@Bjorkdidit it's an area of law I know well. It CAN work like you say it did for your relative. It can also go badly, terribly, awfully wrong.

It's a massive risk to take with no legal protection.

What would she leave to a three year old though? I imagine she assumes the child's father will look after them? It wouldn't be fair to ring fence her half of the savings for her child when he'd need them if she died young, surely?

Wills can be changed as and when the child grows up, but for now it makes sense to leave it all to the surviving parent - which is what would happen if they were married.

@TurningPointe we're doing both the financial and health one
I've never actually looked at those 2 things side by side before like you said...
it's made me think but i think I still agree with myself that I'm much more comfortable giving LPOA to him than getting married
Maybe it's because my parents were divorced and one got screwed over by the other for money!
And in my head (true or not) I believe divorce is more likely than serious ill health/incapacitation
I suppose the question is how hard is it to change the LPOAs if we split up?

You ask: How hard is it to change LPOAs if you split up?

The health one only comes into force if you lose capacity, whereas a financial one can be used as soon as it's registered.

If neither has been used and both still safely in your possession you can just shred them. If the financial one is not in your possession get it back. If it's been used then things are likely way more complicated.

Another reason to get married might be in order to be eligible for widow's/widower's benefits from your pensions. You need to check your scheme rules.

Yes this was my thinking. The surviving partner will need any and all money to bring up our child
And I do feel like he'd always look after her. I wouldn't have had a child with him if I didn't.

If we're joint tenants then doesn't my half of the house automatically go to him so it wouldn't be included in inheritance tax?
So it'd be a long time before we get the inheritance tax point with pensions and savings only