A question that I get asked frequently as a family solicitor is “How can I protect my children’s interests in my finances now that I have moved in with a new partner?”. There can often be a real struggle for a parent in protecting their children, but wanting to live with a new partner.
The answer is communicate, communicate and communicate. And, do it before the new partner moves in. This is because the best way of protecting property is by entering into an agreement with the new partner that effectively, certain assets with be ring-fenced, or dealt with in a certain way. If you can show that this was the intention at the time cohabitation began, then a partner’s potential claim further down the line is very much diluted.
Under Trusts of Law and Appointment of Trustees Act 1196 (we call it TOLATA) for short, the first thing that a court has to establish is what was intended between a couple, at the time a property was purchased, or a significant triggering event – such as one of them moving into the other’s home. They then have to establish whether or not the partner has contributed for money or “money’s worth”. So, if you can satisfy a court that the intention was that the new partner was to get nothing, their claim would have to fail.
Sadly most couples do not have discussions about what they would intend to happen if they split up later down the line. In addition, a word of caution – if you marry new partner, the divorce rules governing finance and property are a whole different ball game, and you would be wise to enter into a pre-nuptial agreement – plenty of time before the marriage, and where both of you have had the opportunity of getting legal advice, and finding out what financial position you are both in. Whilst pre-nuptial agreements are not yet officially enforceable, the Law Commission has recommended that certain pre-nups, which satisfy certain conditions, should be legally enforceable. In addition, after the case of Radmacher, the courts are looking at them a lot more favourably. However, again, the longer the marriage, the less likely it is that a court is going to be bound by a pre-nuptial agreement – particularly if there have been children.
If you are worried, please see a solicitor. Most solicitors now offer fixed fees to prepare documentation of this nature, and most offer an inital free consultation.