Thursday, 19 April 2007

Couples warned to plan finances

Shropshire couples who live together are being hit hard financially when they separate – all because they don’t plan well enough for their future.

Nadia Davis, who leads the Family Law team at Martin-Kaye Solicitors, in Euston Way, Telford, said increasing numbers of cohabiting couples were running into financial difficulties when the relationship fell apart.

“The problem arises because many couples who set up home together don’t give enough thought to the arrangements of how they will own their property – and so, when they separate, they run into real problems.”

Nadia said that even if one person has contributed a greater share towards the cost of buying the home, there was no guarantee they would get that investment back if the couple split up.

“Many unmarried couples still don’t realise that the way they decide to apportion the legal title of the property when they first buy it is the crucial factor that will determine what they receive if they go their separate ways.

“It is vital that each partner is aware of this right at the beginning of the house-buying process, and that they think things through extremely carefully.”
Nadia said most couples chose to hold the legal title as joint tenants – this means each person would be entitled to 50 per cent of the equity in the property if they separated.

“This percentage would still apply even if one person had made a greater contribution towards the deposit, paid for expensive renovations, or maybe even covered all the mortgage payments during the relationship.”

She said there were though simple steps that could be taken when the couple decided to purchase a property which could help them avoid difficulties later.

“You could decide to own the legal title of the property as tenants in common in differing shares, to reflect the difference in contribution towards the purchase price.

“Or, even better, you could draw up a straightforward cohabitation agreement which has the added benefit that it can also cover any additional financial contributions made after the house purchase.

“Couples could save themselves a lot of heartache and unnecessary expense by seeking sensible legal advice when they decide to buy a property together.

“Buying a house is usually the biggest investment most people will make, and it’s just common sense to make sure you don’t lose out financially if the relationship doesn’t work out.”