Co-Habiting Couples & Mortgage Protection: How To Do It The Right Way

If you are living with your partner but not planning on getting married anytime soon, then you are probably one of those people that don’t think that a piece of paper can change anything and I admire that. Yet, what you might not have considered if this is your choice is the fact that things can get quite a bit complicated both legally and financially if you, say, want to buy a house together, but aren’t married.

This, however, does not mean that you won’t be able to do it, since, as you can see here, there is a way to make it happen and to do everything the right way.

Co-Habiting Couples and Mortgage Protection

While you probably already knew that you can get mortgage protection if you are a co-habiting couple, here’s what you might not have known.

There is the right way and then there is the wrong way of doing this and I am pretty sure that you would want to do everything correctly, so as not to end up paying a huge amount of inheritance tax in the event of your partner passing away.

I know that you might not even want to think about such a scenario, but we all must face the truth at some point, and the truth is that something like this might easily happen.

The opposite can also be correct. Your partner may end up being the one paying the inheritance tax after some unforeseen circumstances that led to you passing away.

Death is never a pleasant topic, but there are certain situations in which you do need to think of every single possibility and thus also take death as one of the possibilities and act accordingly. In this case, you need to act towards protecting yourself and your partner from a hefty tax bill in the event of someone’s death.

As mentioned already, there is the wrong and the right way of getting mortgage protection as a co-habiting couple. And, today we are going to have a look at the right way, with the aim of helping you understand this better and thus do the right thing for you and your partner.

Of course, before we even get to that, you should check if you qualify as a co-habiting couple in the first place, so let’s answer that question.

Co-Habiting Couples and Mortgage Protection

Do You Qualify?

Keep in mind that the requirements might differ from one place to another especially when it comes to the time-frame, but the rules are generally the same. Basically, if you are a couple who has been living together in an intimate relationship and who has been sharing expenses for quite some time now, then you can certainly qualify as a co-habiting couple. Yet, as I have mentioned, the time-frame can be different and it also depends on whether you have kids or not.

Usually, the time frame is shorter if you have kids and a bit longer if you don’t. For example, in some places, couples that have kids but aren’t legally married are regarded as co-habiting couples if they’ve been living together for at least two years.

Those that don’t have any children usually need to have been living together for at least five years in order to qualify. These are the general requirements, but I advise you to check with your local authorities before getting any ideas and before even thinking of mortgage protection.

Co-Habiting Couples and Mortgage Protection

How To Do This The Right Way?

Now that we have clearly explained who can qualify as a co-habiting couple, I believe that you know where you stand and whether you can proceed to getting mortgage protection. Of course, you have probably already checked the rules and regulations in your specific area, which is definitely necessary if you want to do everything the right way.

Speaking of doing things the right way, I have already hinted at the fact that you could do something wrong while getting mortgage protection – something that can lead to one of you paying a huge inheritance tax bill that wouldn’t even exist if you just took the time to learn how to do this properly.

I suppose that you really aren’t keen on paying something that you don’t actually have to pay, which is why it is important for you to play your cards right. Okay, that might sound as if I were trying to get you to do something that’s against the rules, but believe me when I say this.

All the rules will be followed and you will still manage to avoid the inheritance tax if you just learn how to go through the entire process correctly.

Here’s more on the topic of mortgage protection: https://www.leitrimobserver.ie/news/carrick-on-shannon/558856/mortgage-protection-for-cohabiting-couples.html

It all depends on the policy you choose to get. The key is in getting one that is structured in a way that will help you reduce or completely negate tax inheritance liability in the event of death of one of the partners.

Basically, both you and your partner should individually take out mortgage protection insurance on each other’s life for the full amount of the mortgage. In addition to that, the crucial thing you have to do is make sure that the premiums are paid from individual bank accounts instead of a joint one.

If you do things as explained above, you will manage to ensure a rather reduced tax liability in case your partner passes away. The same goes for your partner should something happen to you. Thus, if you find yourself grieving, the last thing you will need to think about is inheritance tax and I am sure that this will take a great burden off your shoulders.

Of course, if all of this sounds too complicated for you, the key is in getting the right professionals to advise you in the process. So, make sure to talk to at least one expert in the field, explain your situation and let them tell you precisely what you should do. Getting help from experts is always a great idea, as they will certainly know more on the topic than you.

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