I put more money into our Ely home — what happens if we split?

I put more money into our home — what happens if we split?

Unmarried couples are buying together in increasing numbers. But if one partner puts in significantly more, how can they protect their investment?

Rachel Spencer Robb, partner in family law at Clarion, explains:

You’ve found your dream home. You’re ready to buy. But there’s one big difference: you’re putting in far more money than your partner.

What happens to that money if you split up?

For unmarried couples in England and Wales, the answer is not as straightforward as many assume. There is no such thing as a “common law marriage”, however long you have been together, and cohabiting couples do not have the same legal protections as married couples or civil partners.

If the relationship ends, a dispute over the home will generally be decided under property and trust law, rather than the wider powers available to the family courts on divorce.

Put it in writing

If one partner is contributing significantly more, a Declaration of Trust should be considered when the property is bought.

It can record exactly what each person has contributed and, crucially, what happens to that money if the property is sold. It could provide for each partner to recover their original contribution before any increase in value is divided, or set out unequal ownership shares.

How you own the property matters, too.

Owning as tenants in common, rather than joint tenants, means each partner can own a defined share and choose through their will who should inherit it.

That can be particularly important where contributions are unequal — or where, as in this case, one partner has two children from a previous relationship.

Don’t forget the break-up — or the bills

A Cohabitation Agreement can also set out who pays the mortgage, household bills and maintenance costs, as well as what happens if the relationship ends.

And the financial picture doesn’t necessarily stop at completion. If one partner later pays more towards the mortgage, renovations or major improvements, that could potentially affect their interest in the property.

What if one of you dies?

This is another area unmarried couples can easily overlook.

If an unmarried partner dies without a valid will, their partner will not automatically inherit under the intestacy rules.

Where there are children from a previous relationship, proper estate planning is particularly important to ensure everyone’s position is clear.

The bottom line

It may feel awkward discussing money, separation and death when you are excited about buying a home together.

But having those conversations before contracts are exchanged could save a huge amount of stress — and potentially a very expensive legal battle — later.

A Declaration of Trust, Cohabitation Agreement and properly drafted wills can help protect individual contributions and provide certainty for both partners and their families.

And if the couple later become engaged, a prenuptial agreement can also help protect and provide for that initial contribution to the property.