- Private Wealth
There is often a lot of talk about modern women being able to ‘have it all’. I am not here to get into the complexities of what having it all entails and how that can be achieved as that is a completely individual choice. The purpose of this article is to set out some of the common relationship scenarios and consider how to best protect yourself in the event that your aim to have it all does not pan out as you expected:-
You are a fiercely independent woman and you choose not to marry. You meet a partner and he/she moves into your property which remains in your sole name. You do not have children.
What happens if the relationship fails? You’re protected… Right?
Possibly but this depends on how you both organise your finances. There are many ways that you can inadvertently give someone an interest in your property despite not making a formal change at the Land Registry. For the best protection you should consider entering into a cohabitation agreement to formalise who is going to pay what both during the relationship and in the event the relationship breaks down.
You and your partner decide to purchase a property together. To assist you, your parents lend you a considerable amount of money as a deposit and to cover the costs of purchase. Your conveyancing solicitor asks you whether you want to own the property as joint tenants (your partner will inherit the whole house if you die without the need to worry about inheritance tax) or as tenants in common (you each have your own share in the house which will pass under the terms of your Will).
What happens if the relationship fails? Will your parents see the return of that money?
Not unless you have taken the right steps to protect that money. In most situations your parents will have gifted the funds to you and often your mortgage company will require your parents to sign a document confirming the funds are a gift. If you wish to protect the funds gifted to you by your parents you should choose to register the property as tenants in common and have a Declaration of Trust which sets out your agreement on the division of the proceeds.
You have been proposed to by your long term partner and the wedding is booked. You have assets from your own financial resources or through gift and/or inheritance. Those assets are not matched by your partner.
What happens if the marriage later fails? Will you get the lion’s share of the assets which you owned before the marriage?
It is impossible to know when the relationship will fail and the division of the assets will depend on the circumstances at the time. Should you have children, their needs will be the first consideration of a Judge and it is only once needs have been met that a Judge is likely to consider other legal arguments such as pre-acquired or non-matrimonial assets. For the best chance of protecting your assets, you should consider entering into a pre-nuptial agreement.
You choose not to marry but you live with your partner and you have a child (or children) together. You agree that you will not work and be a stay at home mum.
What happens if the relationship fails? You are protected as a common-law wife… Right?
Wrong. There is no such thing as a common law wife, no matter what the press or television tries to indicate to the contrary. If you separate from a partner outside of the confines of marriage, you have property rights (i.e. sharing in jointly held assets and retaining assets in your own name), and the right to receive child maintenance but you do not have the right to share in their solely owned assets nor do you have the right to spousal maintenance. For wealthier couples there may be some rights under Schedule One of the Children Act 1989 for assistance to cover housing and large items of capital expenditure but these rights are limited, especially when compared to the rights of a spouse.
You should be able to have these difficult conversations with your chosen partner and if you can’t, you have to consider how difficult the conversations would be in the event the relationship was to fail.
This does not cover all potential relationship models and you should always ensure that you take legal advice when making life changing decisions to cohabit, have children or marry. These four scenarios cover some of the key areas in which the law can assist you but there are other practical ways to protect yourself.
The oft quoted phrase is quite apt – hope for the best but prepare for the worst!