To marry or not?

[cherrytreehouse]

Here is the scenario:

• DP and I have been together for over 15 years and have 2 children, not married, neither ever been married, neither have seen ‘the value’ in it because we are committed and have kids but appreciate that I may be in a vulnerable position hence this post for advice.
• we own a house 50-50, both on the deeds. I pay the mortgage from my account each month (but It is in both names). Both names on the house deeds but he put in 10k more deposit (15k for me, 25k for him). That was 10 years ago.
• we own a business together and are joint shareholders, we earn the exact same salary and dividends each a year but currently he earns a lot more into the business than me. This is the thing that’s changed recently and worries me. But ‘on paper’ we own 50% each and take the same out.
• im set to inherit approx 750k at some point maybe within 15 years, he may inherit some but more like 200k I think
• we have life insurance and wills both naming the other as sole beneficiaries

Ive always assumed we ‘should’ marry but a friend has recently got divorced and her husband was entitled to 50% of her inheritance and it got me thinking..is that the safest thing still for me to do in this situation?

i am happy to marry if we need to - just feels now after so long it will be more transactional and i dont really want that. We dont want to spend money on a big wedding etc.

And we never married because we wanted to buy a house and start a business (which we did) and then we had the children (there was always something else happening!) but now I’m old and thinking we should have don’t it years ago!

After 15+ years together, if it came to it, why would you begrudge a 50/50 split of all assets (including inheritances)? You’re a team.

currently he earns a lot more into the business than me.

What does this mean?

Look into the inheritance tax breaks for bequeathing assets to spouses (rather than partners).

have you looked into what happens when you die or something happens where you are not capable of making your own decisions?

marriage makes death and incapacity simpler but half of that can be done by making power of attorneys.

A spouse inheritance free of inheritance tax plus their spouse's unused tax free amount. Currently you would use the tax free amount on first death and miss out on the extra allowance for inheriting property. So from that point of view you are better off being married or in a civil partnership.

Money saving expert talks about the benefits of marriage and some people did marry as a result.

From a divorce point of view then potentially you could lose some of your own inheritance. It may be worth a discussion with your parents and legal advice to protect this.

I think it means that he generates more income for the business. But in any case, you are completely right about inheritance tax - and if OP gets married, then their children will also benefit because whichever one dies first can also leave their nil rate band allowance to their spouse.

I think because there’s history in my family of someone passing away and another person ‘moving in quickly and them remarrying’ and that new person taking the money that would have gone to the children.

So in essence what worries me is; if I inherit at some point and then I die, can my then hubby marry again and give that money to a ‘new wife’. I just want to make sure any family money on my side can only go to my children… (if I die). Obviously whilst alive I’d share it all with my partner!

Do a civil partnership and treat it like a apt that day - no fuss - maybe raise a glass afterwards just you two

it's definitely worth it if you want to benefit from inheritance tax breaks. It’s also just easier for other things that crop up - like being the first person around all matters that might need dictating if your partner is out of action or incapacitated and not necessarily needing poa

Yes it means this. He generates 150k into it, I’m about 40k (presently), it has changed over the years.

What I didn’t realize Is we can become civil partners very easily and then have a marriage / wedding at a later point if we choose too - i didn’t know this was possible!

Your current will leaves everything to your DP, even though you are not married. So if you inherit, he could still get everything and then give it to a new wife. That's not a 'being married' issue. Whether you are married or not, you could make a new will when you inherit, leaving that money to your joint children.

So the only potential problem with being married is if you divorce and he gets some of your inheritance that way.

Do you own more than £650k of assets between you? No inheritance tax between spouses.......

No, currently about 450k (house equity) and 100k in the business and 50k savings so not at 650k quite yet but not far away.

It doesn’t matter whether he generates more income for the business. If you’re 50/50 shareholders then unless you have a shareholders’ agreement entitling him to more on the basis of bringing in more revenue, you each own half.

As for the rest - IHT transferable bands are a massive benefit but losing half your inheritance in a divorce is also a disadvantage. There are ways your parents could restructure that inheritance if that’s your concern.

I’d get advice on this from a family lawyer and personal wealth advisor.

https://www.citizensadvice.org.uk/family/living-together-marriage-and-civil-partnership/living-together-and-marriage-legal-differences/

You could always ask for your inheritance to go straight to your children thereby protecting it from a divorce & remarriage claim later on.

Change the ownership of the property to tenants in common then do a trust will leaving all of your assets including your half of the property to your kids. The will can include a clause which allows the surviving spouse to live in the house until they remarry or die. The house and assets are then protected for the children in a trust will.

https://www.legalandgeneral.com/insurance/over-50-life-insurance/wills/different-types-of-wills/

I wouldn’t get married if I was the OP.

Why? Just wondering what makes you think it’s better not to?

If you want any future inheritance to go to your DC if you die don't marry or enter into a civil partnership.

I wouldn’t marry or do CP in your position.

Get LPA in place.

Get your wills sorted.

You can each leave £325 + £175k direct to your kids if you leave them your share of the house (with a life interest to stay living in the house to the surviving partner). But would need to change to owning the house ‘in common’ if you currently own it ‘jointly’.

I see Wills as being for the next 5 years. If you die within 5 years that’s plenty of time for him to marry a new woman who outlived him and leaves your kids out of her
will. Seen that happen so many times.

And yes, if you have inherited your £750 and left it to your Dc there would be IHT to pay, but so would there be if it went IHT-free to your husband and he then left it to the Dc.

Or it might get spent or put into a new marriage.

Bereaved men move on fast and leave their kids’ interests behind all too often.

I realise this is not a nice way to think but marriage is essentially a legal and financial contract, and contracts are for when the nice ways of negotiating fail.

You’ve managed your family life and business as a team successfully on love, commitment and fairness, if it’s not broke, don’t fix it!

If the roles were reversed, how would you feel about him behaving the way you are OP?

Why not both make a will to leave everything to the kids?

I am not sure I’m behaving in any particular way. I’m just asking a question regarding how to make my children as protected as possible for the future. I certainly would want him to be ok, when thinking about ’our money’ I have no concerns at all - it all goes to him and he will look after our kids (if he’s the surviving partner). My only worry would be my parents’ money which I know they would only want to go to my children - not to a potential future wife he may have if I died. Or even to her children. Obviously it’s all theoretical and my parents are still alive but getting older so these questions are now rearing their heads a bit.

This has mainly crossed my mind because it did actually happen to my mum. She would have inherited a large sum and it went to a new wife who had been around for a very short time and then disappeared completely and that was for her upsetting.

But I’ve listened to all of this and I think the best advice is for me to get some legal advice on how to protect that inheritance but go ahead with either marriage or CP. mainly because we are partners, I love him and ultimately I need to trust he’d do right by our kids. But I suppose if I can protect some / most of it that seems reasonable so I’ll investigate what is possible.

Thanks for this. It’s definitely an interesting take on it and worth me researching before blindly assuming marriage is best / safest.

It's just if a man said he'd be inheriting 750k, and sought advice to protect it from the mother of his kids getting 50/50 in a divorce, he'd be told he was being selfish, greedy, unfair etc.

Fair to want your kids looked after, others have advised on that.

Would your parents be able to leave the money (or a significant share of it) directly to your children?