How to move in with a partner
Follow our eight easy steps to co-habiting coupledom.
So you've read How to move in with a partner: Part one and have figured out how you are going to share joint costs and set up a joint account. You're dreaming about moving in together and cuddling up on the sofa, and raring to sign on the dotted line.
But have you considered the financial implications of living together? Whether you're opting for the joys of joint bills or the ecstasy of wedded bliss, it pays to plan ahead. So ask yourself the following eight questions:
Have you drawn up a will?
Co-habiting couples who are not married have different legal rights to married couples, and that means different financial responsibilities.
If you are not married, you will not have access to the money in your partner's bank account if he or she dies (although you will still be able to access your joint account). Similarly, you will not automatically inherit his or her estate, the way a married partner would, so it makes sense to draw up a will.
If you live in Scotland, it may be worth taking legal advice as to the financial implications of cohabitation, as the law in relation to cohabitation is different from that in England and Wales.
Jane Baker explains why life insurance should be your number one financial priority
Have you got life insurance?
It might seem morbid to discuss the financial implications of the death of your beloved, but if you are relying on your partner's income to pay the mortgage or the rent, you need to consider how you will cope financially, as well as emotionally. Without life insurance, you could find yourself homeless at the worst time possible.
Luckily, you don't need to take out an expensive policy. Many employers offer free life cover. This means they will pay out a multiple of your basic salary (usually three or four times) to a beneficiary of your choosing. So what are you waiting for? Fill out that form today!
Have you sorted out your pension?
If you are contributing to a work or personal pension, you can nominate your partner to receive your pension and any lump sums you are due before retirement. Your employer's HR department should be able to help.
Have you drawn up a cohabitation contract?
If you like to have everything set out in black and white, you could formalise your living arrangements with a cohabitation contract. This sets out who is responsible for what. For example, it would make clear how much each of you will contribute to the mortgage or rent, and how you will pay the bills.
It's best if both partners have consulted a solicitor before signing the contract. It's also important that both partners are 100% honest about their financial circumstances when the contract is drawn up.
Will you be joint tenants?
Whether you are buying a home together or merely renting, you should consider what would happen if you split up.
If you are renting and contributing to the rent, make sure both of your names are on the tenancy agreement. Otherwise, you have no legal right to stay in the property, should your partner ask you to leave.
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Bear in mind, however, that if you take out a joint tenancy, you will each be individually responsible for paying the entire rent. So if you pay your usual share but your partner doesn't pay the rest, the landlord can pursue both of you for the remaining sum owed. If you fail to cough up, you could receive a County Court Judgment against your name.
One alternative to this arrangement might be for each of you to take out a separate tenancy agreement with the landlord, where you are only responsible for your own share of the rent. However, your landlord may not agree to such a contract if you are living as a couple.
Similarly, if you are joint homeowners, you should decide whether you want to be joint tenants or tenants-in-common.
If you are joint tenants, your partner will automatically inherit your ownership of the property when you die. If you are tenants-in-common, you can leave your share of ownership in the property to someone other than your partner.
Before you enter into a financial association with your partner, where your credit ratings are joined up together, it's a good idea to check your credit report first to find out how your scores might be affected if you are linked together.
Do you receive State Benefits?
Your entitlement to State Benefits may be affected by the fact that you are co-habiting. For example, if you move in with your partner and you have a low income, you may both lose your entitlement to some Working Tax Credits. If you were living alone, you could still be entitled to these benefits.
Can you cut costs?
Guess what? Co-habiting is not really about getting breakfast in bed and having, ahem, sex on tap. It's all about reducing your insurance costs! Particularly, travel insurance. For example, an annual multi-trip travel policy for a cohabiting couple with Endsleigh insurance costs each adult just £13.20, compared to £16.50 for a single person.
Are you ready?
You're about to make one of the biggest financial commitments of your life. Are you ready?
If your joint finances in order and you're up to speed with your new financial responsibilities, then the answer should be yes. Which means I have good news for you. Your new life as one half of a cohabiting couple is about to begin. The sofa awaits you... Enjoy!