Enter with caution!
Unmarried couples must be aware of a lack of rights when buying homes or moving in together, says Pat Gray.
Buying a first home together as a couple is an exciting prospect but can also be fraught with difficulties which only emerge later on in the relationship.
Undoubtedly the most important piece of advice to any young couple is to consult their solicitor, since merely assuming that rights are intact when a home is purchased /leased can prove to be a very costly mistake.
Noted below are some “tips” for couples contemplating their next move together.
If one party is providing more cash than the other then this should properly be recorded within a Minute of Agreement. This Agreement can record at the outset what will happen re distribution of monies should there be a dispute in the future. Couples can own a property together jointly although not necessarily equally so if, for example, one party contributed more financially by way of deposit or level of income this could be mirrored in the title deeds, for example, by way of 70/30, 60/40 split.
2. PRE-NUPTIAL/CO-HABITATION AGREEMENT
Such agreements are becoming increasingly common these days where couples can set out who is responsible for what whilst living together and also when, and if, they separate.
3. TITLE DEEDS
Couples purchasing must consider how the title is to be taken and what is to happen should one party die.
Co-habiting couples do not automatically have the same rights as married couples and if there is a desire to ensure that a partner inherits on death then this should be recorded and reflected within a will.
5. NOMINATION PAPERWORK
As an unnamed couple, there may be no automatic legal entitlement to benefit on death to, for example, a partner’s death in service payments, pension or life insurance. Nominee forms should be readily available from employers or other providers so as to ensure the correct “destination” of the funds should an untimely death arise.
When renting, it is crucial from the outset that couples decide who is paying what by way of outlays, including the rent. Again this should be recorded in a legally binding agreement.
Insurers should be notified and insurance updated to cover any items brought into the “combined” home or purchased together. Car insurance may also need to be altered to account for the additional new driver.
8. CAPITAL GAINS TAX
This may be relevant if both parties move in together to one property and rent the other out. The rented property can remain as a principal residence for up to three years which would mean that no CG Tax would be payable.
If in doubt, seek advice and proceed with caution!
Pat Gray, Private Client Partner