With over 6 million couples cohabiting in the UK who have no legal protections should they go their separate ways, it’s easy to see why so many couples are on edge when it comes to a financial commitment.
At Burton and Fisher, we are a leading financial advice service who provides the highest quality, independent investment advice in Lancaster, and we know just how stressful cohabiting under financial stress can be, especially with no protection in place.
We have put together a few tips to relieve some of the pressure when it comes to arranging your finances together in a cohabiting home.
Write an Agreement
When living together, it may seem ridiculous to draw up an agreement. After all, you have chosen to live together and trust each other enough to want to live in the same home. However, writing up a cohabitation agreement allows you to set out exactly what each person is bringing into the relationship, and how the assets would be split if the relationship broke down.
This reduces any arguments of who owns what within the relationship; so that both people are treated fairly and receive what they are owed should the relationship come to an end.
Think About Tax
Married couples benefit from some limited tax advantages over couples who are simply cohabiting. It’s definitely beneficial to know of these if you aren’t planning on getting married.
When in a married relationship, partners can transfer any assets they have between themselves with no tax liability and avoid inheritance tax on any asset transferred. If you are cohabiting and pass away, your assets that pass on to your partner would potentially be liable to inheritance tax.
Draw Up a Will
Sadly, if you pass away and are in a cohabiting relationship, your assets won’t automatically be passed on to your partner’s estate. This is why it is so important to have a will in place.
There is a common misconception that drawing up a will cost a lot, but shopping around for will providers is the best way to find a good deal.
If your affairs are especially complicated, it’s advisable to seek the help of a professional solicitor when it comes to drawing up a will.
We hope that our tips have put your mind at ease if you are in a cohabiting relationship; even though there are no legal protections for your financial affairs, there are steps you can put in place to ensure that your finances are well cared for.
Burton and Fisher are on hand for professional, impartial financial advice, and are always willing to go that extra mile for our clients to help you keep your finances in order. If you would like to know more about the services we offer, don’t hesitate to contact us today by calling 01524 416872 and one of our dedicated team members will be happy to help you.