Relationships can be so tricky to negotiate. This is especially true if you are looking for love the second time round. You will be older and wiser and perhaps left a little emotionally bruised from your past experiences.

When you find your perfect partner and want to take that important next step of moving in together it is important that you have that money conversation. It’s not romantic but it will give you both peace of mind and set out your ground rules.

Warning – the law does not protect cohabiting couples

Many couples think that when they are living together for a longish period of time, they acquire legal rights that will protect them if their relationship should break down. That’s just not the case. Couples who live together never get the same rights as married couples.  This is why it is so important to put things in writing.

Here are some top legal tips if you are ready to move on from just dating to that exciting first step of commitment that comes with cohabitation:

1. Consider a cohabitation agreement

A cohabitation agreement will set out what should happen to your money and assets if you do end up going your separate ways at some point in the future. It will protect any future inheritance you might receive and it can make provision for any children that you might have together or children from past relationships.

2. Put a trust deed in place

As an absolute minimum put a trust deed in place if you decide to buy a house or flat together.  This will set out what each of your shares are, what your future financial contributions will be and how your money will be divvied up when you sell the house.

3. Know the difference between joint tenants and tenants in common

Swot up on the difference between joint tenants and tenants in common (nothing to do with tenants!!) Make sure that the solicitor or conveyancer that you appoint to deal with the purchase of your home knows how you want to hold that property jointly. A tenancy in common will define your shares in the property and set out any unequal financial contributions that you both made to buy the property.  The details of those contributions should be recorded on the property forms that you will both have to sign. If you hold the property as joint tenants your shares in your home will not be defined. In the event of your death before your partner, the property will pass automatically to your partner. If you have children of a previous relationship or marriage this may not be what you want.

4. Give your property lawyer clear instructions

Give clear instructions to your property lawyer when buying your joint home. It’s really important that you tell your conveyancing solicitor if you and your partner made unequal financial contributions to the price of your property if you want your shares protected. Don’t assume that he or she will just know. Also keep a record of your financial contributions in case you need to produce that information at some point in the future.

5. Make a Will

This is so important especially if you have children. You will need to set out in your Will who should inherit your share in your home. This is also important if you and your partner would like your children to inherit your shares in your jointly owned property but you want to ensure that your partner can continue to live in your shared home in the event of your death for a period of time or for as long as they like after you are gone.

6. Sit back and enjoy!

And finally, when you have put your house in order (literally and metaphorically!) sit back and enjoy the love of your life. You will have worked hard to get to this point because relationships are hard work. They require negotiation and compromise. Well done you for taking the plunge and committing to sharing your home and your life. Cohabitation takes courage and conviction.

If you need any more advice and guidance on any of the above, do get in touch with Saika Alam. Saika is a well-respected family and divorce lawyer based in Mayfair, London. Known for her personal and pragmatic approach, Saika represents her clients on all aspects of their family relationships from cohabitation and marriage to separation and divorce and everything in between, whether that relates to financial matters or children’s issues.

For further information on the issues raised, please contact Saika Alam at sa@branchaustinmccormick.com.

Women entrepreneurs have made remarkable strides in the business world, displaying resilience, determination, and innovation. However, when faced with divorce, they often encounter unique challenges, especially concerning their businesses. Divorce is a significant life event that can have far-reaching financial implications. For women entrepreneurs, the complexities of separating personal and business assets can be daunting. In this blog, we will explore the unique challenges faced by women business owners during divorce proceedings and provide valuable insights on how to navigate the financial implications effectively.

Business Valuation:

In most cases, businesses and their value are included within the assets to be shared within the divorce settlement, even if one spouse has never been involved in the business. If the business is considered a marital asset, it will be subject to division between the spouses. One of the primary challenges women business owners encounter during divorce is determining the value of their business. Business valuation methods can vary, and it's crucial to choose the right approach tailored to the specific type of business. Factors like revenue, assets, intellectual property, and market trends must be meticulously analysed. Engaging financial professionals with expertise in business valuation can provide an accurate assessment.

"Divorce can have significant financial implications for women business owners. It's essential to assess the value of the business accurately and fairly. Proper evaluation is key to ensuring an equitable division of assets."

Protecting Business Interests:

Safeguarding the business is paramount. Legal documentation plays a pivotal role in protecting a woman's business during divorce proceedings. Having well-drafted contracts, partnership agreements, and clear ownership records can prevent disputes and streamline the division of assets. Updating these documents regularly ensures that the business's interests are protected, even in the event of a divorce.

"One common challenge women face during divorce is maintaining the stability of their businesses. It's vital to plan ahead and seek legal advice to safeguard your business interests. Collaboration with financial experts can help assess the business's value and determine the best strategies to protect it." - Lucy Hart, Family Law Solicitor and Director of Sinclair Law.

Spousal Support:

Women business owners may be concerned about the financial obligations related to spousal support. During divorce proceedings, the court considers the financial contributions of both spouses to the marriage. It's vital to maintain detailed financial records, clearly showcasing the business's income, expenses, and profits. This transparency helps in negotiating fair and just support terms, ensuring the sustainability of both parties’ post-divorce.

Tax Implications:

Divorce can have significant tax implications, particularly when dividing assets or selling the business, such as capital gains tax. Women business owners should consult with tax professionals to understand the tax implications of dividing assets, selling the business, or transferring ownership. Proper tax planning can minimise the financial impact of divorce.

Planning for the Future:

Post-divorce, women business owners need to reassess their business goals and financial strategies. Creating a solid business plan, revisiting financial projections, and exploring growth opportunities can help rebuild and strengthen the business. Additionally, seeking financial advice to manage personal finances and investments is crucial for long-term stability.

Whilst you cannot prevent your business interest being included in a divorce settlement, you can protect your business in a divorce in the following ways:

• A Post Nuptial Agreement or Separation Agreement which can ringfence business assets and may help to limit acrimony in the future;
• Keep the household finances separate to the company as this can assist on a practical basis;
• Sacrifice other assets as part of the overall divorce settlement – this is known as offsetting. It is beneficial to a spouse wanting to retain control of their business or business interest.

Lucy says, "Entrepreneurs often invest significant time and effort into their businesses, making it a deeply personal endeavour. Emotions can run high during divorce, making it essential to remain focused on the practical aspects. Separating emotions from business decisions is critical for making informed choices that will shape your financial future." 

Collaborative divorce processes, such as mediation or arbitration, can be beneficial for women business owners. These methods encourage open communication, allowing couples to reach agreements amicably. Maintaining a cooperative approach can lead to more favourable outcomes for both parties involved.

Divorce can be a challenging journey for women business owners, but with the right legal guidance and financial planning, it is possible to navigate the process successfully. By approaching divorce with a strategic mindset and seeking expert legal advice, women entrepreneurs can protect their businesses and secure their financial future.

For a free 30-minute consultation visit www.sinclairlaw.co.uk or call 01625 526 222.  Offices based in Wilmslow and Bramhall.