When Your Partner Moves In
Five years ago, shortly after my husband passed away, I started dating a man who now lives with me as my partner in the beautiful home my husband and I purchased in the 1980s. We agreed that we would keep our monies separate – what was mine is mine and what was his is his – because I have greater wealth than him. My children are worried about this. Do I have any reason to be concerned?
Judy, 65, Newport, Qld
One of the lawyers I work with refers to “the toothbrush test”. If you stay over regularly enough that you have your own toothbrush at the other person’s home, then your relationship can be considered de facto and under the law, your assets become joint assets – even if you verbally agree that your monies are separate.
At any time during a relationship you can engage a lawyer to draw up a binding financial agreement between you. However, these agreements are not bullet-proof. They require that both parties provide full financial disclosure, obtain independent legal advice and sign off on the terms – and this is when such an agreement can unravel.
If you want your children to inherit your assets, you need to structure your will in such a way that your assets go where you want them to go. Also, you need to understand what could happen if the relationship breaks down or if you pass away before your new partner does. Don’t assume that everything will be all right.
You need to look realistically at what could go wrong and learn how you might mitigate that, and the best time to do that is now when everyone is happy. Seek the advice of a lawyer who will be able to outline the nature of the risks and what your options are.
By Kate McCallum, financial adviser and author of The Joy of Money; multiforte.com.au
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