Ask Boo: What are our money rights if we live together but aren’t married?
This week, we’re tackling the issue of money rights. More specifically, we’re looking at your money rights if you live with your partner, but you’re not married.
And, we’re going to be honest with you, things can get a little complicated, messy and tricky. We’ve done our best to answer some of the most common questions about money rights for couples, but if you’re in a situation where you’re not sure where you stand, it’s always best to speak to a legal professional.
Did you know that your money rights change depending on whether you’re in a relationship, married, have kids, rent together, own a house together…
In fact, if it changes your tick-box status somewhere, it’s probably going to affect your money rights.
This week, however, we thought we’d tackle a particularly sticky, tricky and slightly grey subject area: your money rights if you live with your partner but aren’t married.
And, because these things can get quite complicated and confusing, we thought we’d break them down into a Q&A format, so you can quickly scan them and get up to speed.
Q: If we live together, are we considered a “common-law husband and wife”?
This is one of those super common misconceptions that isn’t actually the case: living with your partner doesn’t grant you any legal status at all.
What does that mean?
Well, it means that if you separate, you’re not protected by the same rights as those who are married or in a civil partnership.
Or, in other words, you’re not legally entitled to anything that technically belongs to your partner, including cars, money and houses.
In some circumstances you might be eligible for a percentage of something, but that usually has to be decided by lawyers (which can get costly).
Q: If we have separate bank accounts but combine our income, what are our money rights to the money in each other’s accounts?
Again, this is complicated, but the simple answer is: you’re not entitled to the money in each other’s accounts, legally speaking.
Of course, the other person can transfer you money or use their account to pay your combined rent or bills, but if things turn sour or something unfortunate happens, you have no legal right to the other person’s money.
Q: If we have a joint account and we separate or one of us dies, what happens to the money?
Aha! This one is slightly easier.
The general rule for joint bank accounts is that the account balance passes in its entirety to the surviving partner. This is often called the ‘principle of survivorship’ and essentially means, in plain English, that all the money in the joint account belongs to the surviving partner.
However, in some circumstances, this can be contested in court. (If, for instance, there’s something in a Will to the contrary.)
Q: If we have a joint account and my partner gets us into debt, am I responsible for that debt?
This can get a little complicated. In some cases, yes. In others, no.
We’ll try and clear it up a little.
You are liable for your partner’s debts if the borrowing was done in both of your names. So, for instance, if you have a joint credit card or your partner applies for an overdraft on your joint bank account, you’d be responsible for the debt too.
However, if the debt is in their name only, you cannot be held liable for the debt, even if you’re married or have a joint account.
(Small side note here: if you acted as guarantor for a loan your partner applied for, you will be responsible, even if the debt is in their name.)
Q: What are our money rights if we split up?
This is where things get incredibly complicated and specific to your situation. We can only give general advice, so if you need specific advice for your situation, we strongly recommend you speak to a lawyer or legal professional.
But here’s some general advice:
If you split up and you don’t have joint accounts, you’re left with whatever’s in your name, essentially. Any money in your account is yours, any property in your name is yours and, of course, any debt in your name is yours.
If you have a joint account, you’re entitled to 50% of everything in theory. However, because you both have access to the bank account, there’s nothing stopping the other person taking all of the money in that account for themselves.
That’s why it’s a good idea to contact your bank as soon as you can after the split and set up two-party approval on all withdrawals and payments. That will make sure neither party can leave the other in the lurch while you work out who is entitled to what.
Q: Am I eligible for any of my partner’s pension if we split up?
Pension plans are an important part of divorce proceedings and can often be split between both parties in a number of ways.
However, like we said earlier, there’s no such thing as a common law husband or wife, so co-habitees are ineligible for any of each others’ pensions if the relationship breaks down.
Q: If my partner dies, am I entitled to anything?
If your partner dies and has stated that their estate should pass to you, then you are definitely entitled to something.
However, if your partner dies without leaving a will, the decision will be left to a set of rules that determine who should get what.
And unfortunately, these do not make any provision for the surviving partner to receive anything, even if you were living together as husband and wife in all but name. Even, in fact, if you have children together.
The only way you might be eligible for something is if you can show that you were financially dependent on your partner at the time of their death. However, this means proving that in court and hiring lawyers, etc… which can make the whole process long and stressful, especially in your time of grief.
However, if you have a joint bank account, you will be entitled to inherit this with no worries at all.
Q: What can we do to make sure we have a plan, even if things go wrong?
The simplest answer to all of these issues is to get married. That way, you’re legally entitled to your partner’s money, property and belongings.
However, we know that marriage isn’t for everyone, so here are some other things you can do to give yourself more legal cover and ensure your money rights as a cohabiting couple:
Get a joint bank account: as we said, this keeps you covered and entitled to money in all circumstances, even the worst ones.
Sign a cohabitation agreement: short of getting married, a co-habitation agreement legally binds you and your partner together and establishes your money rights in writing. That way, if you separate or are widowed, you’ll know exactly what you’re entitled to.
And remember: the advice we gave here is general advice based on most situations. The law can get all complicated and twisty, so it’s always worth speaking to a lawyer if you have any questions at all about your money rights as a couple and as an individual.
- Author The Bamboo Team
- Posted 16 September 2019
