Cohabiting? What you need to know when buying together (Part Two)
When you’re making plans to buy a property together for the first time, there’s so much to think about, and in all the excitement it’s often so easy to overlook important things. Such as making sure that your loved one would be financially cared for if anything happened to you.
But here’s the thing. If you’re cohabiting rather than being married or in a civil partnership, then it’s important to remember that there is no such thing in law as a ‘common-law’ husband or wife, so you don’t have the same rights as a married couple.
How does that all work when it comes to buying a property together?
Well, aside from ensuring that you and your partner are correctly noted on the Deeds of the property and also understanding that you are both responsible for a joint mortgage (see part one) it’s a good idea to consider both putting a Will in place as well as considering life insurance policies for both of you.
As far as cohabiting couples are concerned, putting a Will in place is really important, as should the worst happen to either of you, then the property will only pass to the surviving partner if you are both named as Joint Tenants on the deeds. If you’ve decided to own the property as Tenants in Common, having a Will in place to ensure your share of the property is left to your partner is crucial in order to protect them financially.
Normally, a Will is a very straightforward document and a Solicitor can put one in place for you for a couple of hundred pounds, so it’s worth factoring this into your budget for your legals when you are purchasing a property, as that way you can get everything you need in one place in one go so it’s done and dusted from the outset.
The other thing that you may want to consider as well as a Will is putting a life insurance policy in place. These aren’t expensive – particularly if you’re healthy, in your twenties or thirties and don’t smoke – and mean that, if the worst did happen to either of you, the policy would pay out to cover an amount you decide would be required, either to pay a lump sum off your mortgage or pay it off completely. The amount that the beneficiary receives is a tax-free sum, with the policy only being claimable if you should pass away as a result of either an illness or an accident.
It’s pretty straightforward to put a life insurance policy in place, either by looking at one of the online comparison websites or speaking to your advisor or broker when you get your mortgage arranged. Once you have your policy in place, remember that you’ll need to note in your Will who the beneficiary will be, because as a co-habiting couple your assets won’t automatically be passed to your partner the same way they would be if you were married or in a civil partnership.
If this all sounds like a lot of hassle don’t worry – there are professional people that can help you get everything you need in place quickly and simply, and once it’s all set up you don’t need to think about it again for a very long time.
But best of all, you’ll both know that you’re legally and financially protected in the future, and that’s a really reassuring thought.