How living with a partner could affect your financial assets: entering a marriage or a civil partnership

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    Getting married or entering a civil partnership can change the way your finances, both present and future, are handled. It can be particularly important to think about your finances as an established earner and homeowner, or as someone who may be marrying or entering a civil partnership for the second time. No matter your circumstances, it’s worth familiarising yourself with the potential effects on your assets, and any potential liabilities you or your partner may have.

    What assets could be affected by getting married or entering a civil partnership?
    Assets that are typically affected by a change in your marital or civil partnership status include:

    • Money (including your bank account funds, savings, and debt owed)
    • Property
    • Pensions

    What is the legal definition of marriage or a civil partnership?
    Entering into a marriage is a legally recognised union when certified with an entry into the UK marriage registry, or with a marriage certificate from the country in which the marriage took place.

    A civil partnership is legally binding when a civil partnership document is registered with the appropriate registry office or authorities.

    Who has the legal rights to assets when getting married to, or entering a civil partnership with, a partner?
    Married and civil partners have a legal duty to support one another. When getting married or entering a civil partnership, assets may be considered joint, unless held separately under individual names. This may not be the case for property rights or other rights, however, it might be worthwhile speaking to a legal or financial adviser prior to your union to be sure.

    If both you and your partner have contributed to the purchase or maintenance of a property, or funds in a joint bank account, they are considered joint. Should you separate or a partner passes, property, money and other assets will likely be divided between inheritors and your spouse or civil partner.

    Money in joint bank accounts is owned by both parties, even if only one of you placed the money in the account. Debts on this account are also the responsibility of both partners. Should one partner pass away, the account defaults to being owned by the other; if a partner passes with a non-joint account, the bank may allow the remaining partner to withdraw the balance.

    If you owe council tax on a property, this will be considered a joint debt. However, if you had a debt prior to the union and it is in your name only, it is still considered your debt, and only you are liable to pay for it. An inheritance earned whilst you and your partner are married or in a civil partnership is considered joint.

    Existing property brought to the union by one or both parties is considered the “matrimonial” home, and though it is not jointly owned, both partners may have a legal right to stay in it. Should a marriage or civil partner pass away, a singularly-owned property will likely automatically go to the surviving partner, unless there is a will or other legally binding document in place.

    A state pension will be given jointly to the partnership, even if only one person qualifies for a full basic state pension. Should you or your partner pass, the surviving partner could receive the entire joint state pension, but this is scheme-dependent.

    How can you protect assets in case of a later separation, if you are married or in a civil partnership?
    If you or your partner wish to ensure that some of your assets remain separate in case you later agree to part ways, you can create a prenuptial agreement, a trust or a will to determine what happens to those assets after separation or death.

    In the United Kingdom, there is no stated proportion of assets that must be given to your spouse or partner in case of separation or death. Should you wish to pass on your assets to another person – such as your children – you can create a trust. This will likely not safeguard current assets from divorce claims. A prenuptial agreement could protect both parties’ assets if agreed before marriage and drawn up by a qualified third party such as a solicitor. The agreement must be seen as fair in the eyes of the law.

    A will is designed to protect financial and other assets, should you or your partner pass. Should you have a will prior to your marriage, this will be revoked and be invalid. Generally speaking, if a will has not been drawn up and signed, your estate will go in its entirety to your partner. If you wish this to be handled differently, you may wish to speak to a legal advisor to bequeath assets to other parties.

    Find out more about the legal impact of various relationship stages from the Citizens’ Advice Bureau

    How should you plan for a union of assets?
    If you are planning a marriage or a civil partnership, researching the effect it will have on your assets and speaking to a legal professional may be beneficial.

    The legal aspect of a marriage or a civil partnership should be handled by the appropriate authorities. Having a discussion with your partner and a legal professional may be in your interest if you wish your assets to be handled in a specific way in the case of separation or death.

    To learn more about your options, you could:

    • use an online advisory service
    • arrange for a few discussion sessions with a solicitor for legal clarification
    • use an independent third party between you and your partner to reach an agreement on assets
    • hire a solicitor to create a legally binding agreement and handle the entire process
    • speak to a pension or union representative about your partner’s potential rights to a pension

    Find out more about information on handling your financial assets here

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