How do I protect my deposit if my partner and I decide to separate?

It might be a fear of jinxing something good. It could be that it’s just not something people want to address or perhaps it hasn’t even been considered. However, the ‘what happens if we split up?’ question is rarely asked – particularly when relationships are on track.

Moving in together should be a catalyst to broaching this. That’s because couples that live together, without having married or become civil partners, have very limited protections in law. They can’t count on a ‘fair’ split of assets if the relationship breaks down because the law (in many different respects) doesn’t recognise cohabitation in the way it does marriage or civil partnership. A couple should therefore look to agree between themselves how the things they own and the liabilities they have should be dealt with if things don’t work out.

The ideal scenario is that a couple will have an open and honest conversation about this before they commit to a deposit or a mortgage. The earlier the better, as it’s good to know that you are both on the same page. Formalising your arrangement is vital. We advise couples on creating a ‘deed of trust’, which sets out exactly how property-related matters (including what would happen with the deposit) will be sorted out if you break us. It is solid legal protection and will ensure your entitlement to the deposit, if that is what you have agreed. It is also a useful way of protecting money given or loaned by family members; it’s often the case that parents will help pay the deposit and they may gain some comfort from knowing it will be returned to them if the relationship doesn’t run its course.

Some couples decide to go further and also enter into a ‘cohabitation agreement’. It’s a wise move because this is a way of setting out more than just your home-related rights. It can cover (for example) your investments, your other assets, and arrangements for where your children will live and how contact with each of you will be maintained. Although cohabitation agreements can’t be counted on as being legally binding, the courts certainly consider them as an indication of your intentions. Updating your agreement over time to account for changed circumstances can help its chances of being applied if a court were to become involved in your post-separation arrangements.

To speak to us about cohabitation rights, or about a deed of trust or cohabitation agreement, contact us on 01264 353411 or email family@bsandi.co.uk and a member of the team would be happy to help.