Guest Post: Marrying for money? It might not pay.

This is a sponsored guest post. For more information about sponsored content please see my disclosure for readers page. Kat xoxo

Getting married is a pretty big decision for many of us, and it could well be the best thing you ever do – I know it was for me. But while it is mainly going to be motivated by love, only the most smitten are likely to be totally insensible to the wider implications of taking the plunge.

It remains something of a political hot potato, but as it currently stands, there is no recognition of marriage in the tax system – i.e. there’s no ‘tax break’ simply for being married. However, while it would be a relatively shaky basis for deciding to tie the knot, there is reportedly pressure from within the Government to push David Cameron to make good on his promise to recognise matrimony in the tax system before the next election.

Pooling your resources by moving in with a loved one is often going to be cheaper than each of you running your own place. But taking it to the next stage and getting married can be both expensive – the average UK wedding costs £21,000 – and can involve something of a headache for those organising it.

Clearly, committing to each other in this public and legal way means taking on a number of responsibilities, but there are also a number of financial and legal issues to bear in mind when considering whether to get married.

Consider your rights – property and finances

While you may be perfectly happy referring to yourself and your partner as being ‘common-law’ husband and wife, the simple fact is that there’s no legal recognition of this. Millions of couples who are entirely committed to each other choose to cohabit – rather than get married – and have fewer responsibilities because of this. However, they also have virtually none of the rights.

For example, if you are unmarried and the home you live in is only in one name – regardless of whether it’s rented or owned – if you were to split up, then you have no automatic right to stay on. You can formalise the status to some extent with a legal agreement called a cohabitation contract, or a living together agreement (which may not be legally enforceable – but can be helpful in making a split more amicable).

If one of you dies intestate (without a will) and you are married or civil partners, then there are now statutory rights of the surviving spouse to £250,000 of the legacy, plus half the rest of the estate (the other half is held in trust for any children). If you are unmarried and one of you dies without a will, the survivor won’t automatically have the right to inherit – meaning that you could end up in a bitter legal wrangle with relatives if your partner dies unexpectedly. This includes the roof over your head.

In addition, even if they are legally entitled to their partner’s money, unmarried survivors of a relationship will be hit with a hefty 40 per cent inheritance tax for assets above £325,000, while those who are married or civil partnered would pay nothing. Similarly, if you don’t have joint accounts, you will effectively have no automatic right to your unmarried partner’s money if they die.

Bear in mind that the law in Scotland can be different to that of England and Wales. For more information on local variations regarding cohabitation and marriage in Scotland, take a look at the Citizens Advice Bureau website.

Another consideration to protect the survivor is life insurance – something which can be a great help in paying off the mortgage, or simply making life a little easier for the surviving partner. Some people choose to take out life insurance when they go through a change in their circumstances – for example, moving in with a partner. Meanwhile, if you already have life cover, you should make sure you let your provider know if there is any change to your living arrangements.

~ by William David