Non married - agreeing asset splits

[moneymakesmyheadgoround]

I have been with my DP for around 15 years and have a child together. We are not married. I want to get some financial agreements in place incase we ever split up (which isn’t on the cards but I want to be protected).

We own a flat together which we pay jointly into. When we met, I was a significantly higher earner, had a property which is now rented out with rent going into joint pot, and savings (which are still in savings).

When we bought our flat, he put down the deposit on the house from his previous house sale. Since having a child, my career has changed significantly to be more present as a mother, with big drop in salary. Both salaries go into a joint pot but he puts a lot in his pension.

He would like an arrangement where we agree on event of a split, all assets incl house and pensions & my prior assets would be split equally. I’d like to ring fence assets we’ve brought into the relationship but agree a fair split on the house and pensions based on what we have contributed.

I know I need IFA to help with this but I’m not sure what type of IFA I’m going to need. Do we get advice together or separately, and do we go through a solicitor in first instance?

i know there is a whole extra issue of wills and inheritance with not being married, so we’ll need to make plans for that too.

if anyone has been through a similar situation and can give advice on possible steps, that would be really helpful.

thank you

I think you need to use your rental income to protect your future either by investing it or putting it in a pension.

Get married, you will be in a much stronger position concerning the home and a share of pensions should you ever divorce.

@Copernicus321 I am giving some real thought for the first time to be honest. There’s no reason why we aren’t married - I’ve just never been a wedding type person and I’m not religious. But suddenly it’s hitting home that marriage has benefits beyond a ceremony.

Just book a registry office wedding with a couple of witnesses and look at it as if you are going to the solicitors to sign a legal contract.

Remember you can have a civil partnership instead if you’d like, might help it to seem less religiously loaded? Couple of weeks notice, five minute “ceremony” with two witnesses and you’re done.

And especially now that pensions are taxed to IHT, also very beneficial if you do happily sail off into the sunset together and one of you eventually dies.

You say you believe he'll be fair if you seperate but he's already being unfair financially. Given you're earning less because of caring for joint child the financial of taking that on should be shared between the two of you. There are various ways to make this fairer. One would be all in the joint pot is fine, but then from that it should be equal amounts of spending and pension money. Another is contributing the same percentage of your income each to thr joint account and keeping the rest for spending/pension.

In terms of the pension beneficiaries can be changed, so can wills so I wouldn't want to rely on inheriting a pension or anything else. Even if you could split the pension pot on separating I'm not sure you can get a financially binding agreement to do so. You need to see a lawyer.

Do you have medical POA for each other? It's not just finances that are effected by not being married. If your partner is unable to make their wishes known in a medical situation they won't necessarily listen to you without a POA because you're not married. Same if you're incapacitated. There are also stamp duty implications of inheritance between partners if one dies. The easiest way to deal with all this is to go to a registry office and get married. If you don't want to do that I'd see a lawyer and find out what you need to put in place to replicate the things marriage achieves and also to find out if there are any other legal implied you should know about that might need addressing.

One point about increasing your own pension payments - your contributions are limited to your own earned income each year (unless over the annual allowance), and this figure does not include your rental income. That doesn't mean that you can't "put your rental income into your pension", as that may indeed be where the "spare" cash to save comes from, but just be aware of the limit.

I'm in this situation, not married, splitting, have kids. I WISH we had got married.

We are splitting equity of house but he won't entertain even thinking about giving me any of his pension, which makes me feel quite sick as I was part time for years after having kids, while he continued to earn a fortune. I'm having to just move on from this, but it still stresses me out weekly that I'm having to worry about retirement in my mid 40s. The current system is completely skewed against women.

if you're joint tenants you'll own 50% each, doesn't matter who paid in what or whose deposit was bigger unless there was paperwork beforehand.

I know you think you'll look after each other if you split - my ex definitely previously said he'd not want to see me struggle - but things are very different when you split.

Get married. That's my advice. Our decision not to has affected my retirement and means I'll struggle.

Thank you @EliflurtleAndTheInfiniteMadness - this is all really useful. I’ve spent years with this niggle that it doesn’t seem right so it’s good to have an outside perspective and I appreciate all the advice, which I will definitely now look into.

@Pythonesque - my rental income isn’t really significant enough to hit income limits (because I still pay an interest only mortgage on it). I had always been a good saver before I met DP and the inability to do it now has always niggled me so I do agree that I should explore using my rental income as a form of savings. My DP has always acted hurt if I suggest separate finances, like it equates to me wanting to be single, but I think we both need to wake up to the fact that not being married IS different so we shouldn’t act married without actually getting married.

@FridayFeelingmidweek Oh gosh - this does sound incredibly similar. I’m so sorry you are in this situation but I’m very grateful you’ve shared this. I agree, it’s not my life now that I worry about - it’s the future. I’ve definitely been a bit naive about the differences between being married and not married and ironically I think I was championing not being married as a way to continue standing on my own two feet, but in reality I’m probably actually standing on one foot, about to fall over.

My DP has always acted hurt if I suggest separate finances, like it equates to me wanting to be single, but I think we both need to wake up to the fact that not being married IS different so we shouldn’t act married without actually getting married.

you have a very manipulative 'D'P who has no hesitation in using double-standards when it suits him. He only acts hurt when it something he feels he stands to lose yet he's more than happy to squirrel away money into his pension. That's money he's effectively syphoning out of your family budget.

Think carefully about marrying someone with those values, in your situation I'd think twice about wanting to tie myself to him in marriage, because with his attitudes he'll probably try to screw you over in divorce and cause you a lot of grief. You'd have to fight him for every penny.

You’ve been together 15 years! That’s hardly a short relationship is it?

@daisychain01 i guess if he is that bad, is that not a reason to get marry, to give myself some protection? (It’s a genuine question). His logic is that he earns enough to give us a nice lifestyle and put money in his pension, which would be for our future. He is a high earner so whilst I agree the family pot could be bigger, it is sufficient. It’s what life would look like if I suddenly got cut off that I’m worried about.

No, the pension isn't for your joint future if you aren't married. It is for his and his alone. You dropping your career benefits him as less childcare needs to be paid for and you can cover more if your child is unwell. The golden rule is not to sacrifice your earnings if you aren't married. He might be perfect reasonable now while he likes you, but that could change quickly if you are arguing, or either of you meets someone else.

On the plus side, it doesn't sound like he is necessarily opposed to marriage, so have the discussion and see how it goes. The answers will tell you everything about how he views your security.

The key point is HE is paying into HIS pension in HIS name. HE possibly couldnt afford to do this if you wasn’t contributing your rental income to the household pot. Your contribution is shared, HIS pension is HIS.

Did you ring fence your deposit for the house?

What does "the joint pot" get used for? Bills? the mortgage? And do you pay in an equal amount or proptionate to income?

I'm imagining this
He ears 80k and puts 50k into joint pot and 20k into pension.
You earn 20k and 10k from rental = 30k and put 30k into joint pot

An IFA won't help.
The most sensible thing to do would be to just get married. It doesn't need to be a big party and expensive thing, you can do it with a lot less hassle and expense than all the different arrangements you would need to create the same protections. A simple registry office marriage with no guests in the UK typically costs around £68.50. You will spend way way more than that on professional fees to get equivalent safeguards in place. You can always have a celebratory party a year or two later if that bit is important to you.

How old is your child? If you split in 5 years, unmarried, what would you and he be entitled to and what would your earning and pension potential be given you will still have a dependent child (believe me, they are dependent for a looooong time). And what could that mean for your child’s security and lifestyle?Presumably DP could leave in a far better situation regarding income and pension than you would have.

Then look at the situation if you were in a civil partnership or married.

FWIW, DH and I decided to accelerate the tying of the knot when we went to a solicitor to sort out POA and wills and property ownership and realised how much better and simpler things would be if we were married.

Does it help to think of marriage as an exchange of assets rather than a declaration of love? If you've studied English or European history or read Jane Austen, all of the stuff about marriage contracts and marrying someone for their assets is spot on.
So the question is, are you in a position where your assets are roughly equal and you are of the view that, whatever happens down the line, you want to have the certainty that you will walk away with roughly equal assets regardless of whether one of you has contributed more financial and another more time/labour than the other?

Get married. It’s the only way to make your own retirement financially secure. Plus, there are inheritance tax benefits for whoever outlives the other. Which, in turn, means more to pass onto your children.

He's getting the benefits of being married but you however are not. Personally l wouldn't marry him if you don't want to plus he hasn't covered himself in glory with the way things are currently arranged. I would change the financial splits so you can save and put more into your pension, including enough for you to catch up where he is at
Unless he wants to swap so he does more child rearing and / or get a nanny or more child care. Then his earning power can take a hit and he can see how his pension / savings fare

Seriously? He's the one who put in his money from a previous property so they could buy the house they own now. The OP didn't, she kept her previous property in her own name. It's a massive leap to suggest that he would make her fight for every penny in the event of divorce.

She wants to protect her pre-relationship assets but is more than happy to benefit from his and no longer sees his prior assets as his own because he used them for the family home (made clear by her thinking the house should be a 50/50 split).

No one on here would ever claim a woman putting money into her pension was siphoning money out of the family budget.

If you aren’t married a future together in which you share in his hard earned good fortune is only hypothetical. You can’t rely on it because he and his pension pot can always walk away and you have no legal claim on it or him.

“Everyone has a plan until they are punched in the mouth.” —Mike Tyson

Its easy for DP to say, today, that it will be all roses and vacations when you snd he retire (plan) but when he decides to change 40 year old you for two twenties (punch in the mouth) you may find he no longer likes the original plan and simply walks away.

Women who sacrifice job/pension/earnings to be a “more present parent “ are always in a more vulnerable position than a man in these relationships—whether married or unmarried. The system isn’t built to fully protect them. If married but not in control if finances the non working spouse is subject potentially to financial abuse. Marriage doesn’t prevent that.

But at the point of separation marriage does offer some protection with respect to family assets which can then be forced to be shared.

The decision about what to do about pension payments isn’t gendered. Both parties have to proactively protect their retirements. But the decision about who uses money for present needs vs who uses it for future issues is clearly gendered here as OP is sacrificing present earnings on child rearing and future security by not putting available money in the pension which she would wholly own. As for his pension unless they are married he wholly owns it and she cannot rely on it.