How many times have you heard someone say ‘I don’t need a piece of paper’ when it comes to the question of whether to wed or not?
You might have even said it yourself.
However romantic your notion of marriage may be (or not) there’s no denying the fact that getting hitched is a life-changing experience – if not emotionally then at least in the eyes of the law.
Because, whatever your take on marriage, the truth is that ‘little piece of paper’ does have some far-reaching consequences.
So make sure that you know where you stand legally, and what your liabilities are, whether you plan to stay single, are co-habiting, or desperate to tie the knot.
As a property owner
When you are married both spouses have a right to remain in the matrimonial home; irrespective of who bought it or whose name the mortgage is in. This applies unless a court has ordered otherwise – for example, in the course of a separation or divorce.
If you are unmarried, a co-habiting partner of a sole owner-occupier of the property rarely has a leg to stand on if the owner-occupier asks them to leave.
There are exceptions though, so it’s best to seek legal advice if you are affected.
In relation to each other’s money….
If a married couple has a joint bank account, the money is owned jointly regardless of who put it into the account. On the death of one partner, the whole account immediately becomes the property of the other. Debts and overdrafts relating to a joint bank account will be the responsibility of both or either partner, irrespective of who incurred them.
If a married couple each has a separate bank account and one dies, the bank may allow the other partner to withdraw the balance, providing the amount is small.
If you are cohabiting and you and your partner have separate bank accounts, neither of you can have access to money held in the other partner’s account. If one partner dies, any balance in their account will be the property of the estate and cannot be used until the estate is settled.
If you have a joint account, both partners will have access to the money in the account, as for a married couple. And, if the account is in joint names, on the death of one partner, the whole account immediately becomes the property of the other.
…and each other’s debts
Surprisingly perhaps, marriage does little to alter your position in relation to your partner’s debts. You might think that as husband and wife you’d be liable, but generally you’re not responsible for your spouse’s debts, as long as they aren’t in your name.
Whether you’re married or unmarried, all you’re generally responsible for are your own debts, debts in joint names, and debts for which you are jointly and severally liable. (One such is council tax in England and Wales and rates in Northern Ireland.) If you have acted as guarantor for your partner, you will also be liable for the debt, married or not.
As a parent
For married parents the law is straightforward. You each have parental responsibility, which continues until the child is 18 years old. And this is the case even if you separate or divorce.
It only gets messy when you are unmarried. As an unmarried mother you have sole responsibility for your child, unless you register the birth of your child together with the child’s father, make a formal agreement with the father of the child, or there is a court order in favour of the father. Unmarried fathers have no automatic parental responsibility for their child
Your tax position
This is where being married can make a real difference.
Married couples are in an advantageous position when in comes to their property and inheritance tax affairs, and with little or no tax planning needed at all.
Take capital gains tax. While you can’t give any ‘unused’ portion of your allowance to your spouse, you can be clever and transfer assets from one to the other to make sure you both use your allowance – effectively doubling your allowance as a couple.
Inheritance tax is another winner for married couples. As well as the nil band rate which lets couples transfer money and property up to a certain amount tax-free, they can also pass property on to the other spouse when they die, meaning the tax bill is deferred until the second spouse dies – leaving any kids or the other beneficiaries to pay the bill.
So marriage can make a real difference.
One last thing to note though is that none of this applies unless you are legally married. Simply being engaged is just symbolic – and unfortunately means diddly squat if your betrothed gets cold feet and runs off.
On the plus-side there’s usually no legal obligation to return the ring though!
{Image: Jeff Belmonte}
