The Essential Paper Work

Absolute Military believe that it’s essential that Armed Forces Personnel when considering the purchase of a property either with a partner or solely, know the documents needed in order to protect you and your family.

The Stats:

In recent years, the number of military families owning their own home has increased to 60% but worryingly few are aware of the risks of purchasing a home with an unmarried partner. There are consequences of failing to put in place a Cohabitation Agreement or Declaration of Trust.

Why do I need a Cohabitation Agreement or Declaration of Trust?

For those in the Armed Forces, a Cohabitation Agreement is arguably even more essential due to the unpredictable nature of their career and the way in which income can be received.

For example, it may seem sensible for an enhanced pay cheque as a result of Long Separation Allowance or Living Overseas Allowance to be used towards fitting a new kitchen for your property post-purchase, but is that additional contribution protected if the relationship breaks down or the property is sold?

The simple answer is no unless you put in place the right document. This common misconception and can often result in a shock for one party if the relationship ends or one party passes away.

Myth Busters

Myth 1 – A cohabitee is automatically entitled to any pension or life insurance pay out of the other if they die.

A cohabitee is not automatically recognised as a beneficiary under many pension and life insurance policies, so it is vital that you have completed the necessary nomination and trust forms to ensure that any pay out reaches the intended person when needed.

Myth 2 – The property is in my name, so my partner doesn’t have any financial interest in it. Your partner may have been helping to pay the mortgage and bills, or made a contribution to the redecoration or renovation of the house and these alone may be enough for your partner to gain an interest in your property.

Putting in place a Cohabitation Agreement can attempt to debar claims against your property by your partner and preserve it for you.

Myth 3 – I contributed more to the deposit than my partner, so I automatically get more back when the house is sold

This will depend on whether you and your partner elected to hold the property as joint tenants or tenants in common, and whether you entered into a declaration of trust or not. You can enter into a declaration of trust and cohabitation agreement post-purchase to ensure that your greater contribution is ring fenced for you.

Myth 4– My share in the Property will automatically pass in accordance with my Will. Again, this depends on the legal ownership of the property. If it’s held as Joint Tenants, your share in the property will automatically pass to the other owner trough survivorship, regardless of the provisions of your Will. If the property is held as Tenants in Common, your share in the property will pass in accordance with the provisions of your Will or under the rules of intestacy.

Need help? Contact us.

These issues are important for unmarried partners to know. Everyone should be clear on how a property is held along with the implications for them if their relationship breaks down or one of them dies, this why advice matters and where Absolute Military can assist.