Living Together and Entitlements

Glen_Quagmire

If a person has a mortgage on a house on their own but is living with their partner in the house, does the partner have any entitlement to the house if anything were to happen to the person with the mortgage?

Would the bank reposes the house or would the partner be entitled to stay living in the house if the person with the mortgage had them in their Will to have the house?

How does this work?

jlm29

Glen_Quagmire wrote: »

If a person has a mortgage on a house on their own but is living with their partner in the house, does the partner have any entitlement to the house if anything were to happen to the person with the mortgage?

Would the bank reposes the house or would the partner be entitled to stay living in the house if the person with the mortgage had them in their Will to have the house?

How does this work?

The person with the mortgage should have mortgage protection? That takes the bank out of it in that scenario I suppose? The will is another story though, there are tax implications that someone else will know more about.

Glen_Quagmire

jlm29 wrote:

The person with the mortgage should have mortgage protection? That takes the bank out of it in that scenario I suppose? The will is another story though, there are tax implications that someone else will know more about.

So how does the mortgage protection work? Outside of wills does the persons partner get the house if mortgage protection is in place?

Del2005

Glen_Quagmire wrote: »

So how does the mortgage protection work? Outside of wills does the persons partner get the house if mortgage protection is in place?

Mortgage protection pays out on death to cover the remaining mortgage.

If there's no will the deceased is interstate and their estate is split between their family, the co habiting person gets nothing.

Tenigate

If you have a mortgage, you probably took out a life assurance policy known as mortgage protection. Banks usually insist on it. It can cost as little as €13 a month. If you die before the mortgage is paid off, the life assurance company pays the balance on the mortgage.
Phone your bank to see if you're already paying life assurance as part of the mortgage.
If you don't have life assurance and no money to repay the bank, there's a good chance your house will be sold to clear the mortgage.

April 73

Mortgage protection clears the mortgage in the event of the death of the mortgage holder. Then the asset (house) should be dispersed according to the will. Best to see a solicitor and have a will made. It doesn't cost a lot & provides necessary protection for those left behind.

bee06

It depends on the policy but the mortgage protection will pay the bank the remainder of the mortgage in the event of the mortgage holders death. Then the property goes into the deceased estate and with the absence of a will (assuming the partner isn't a joint mortgage holder) they are generally entitled to nothing.

I'd suggest you have a read of this http://www.citizensinformation.ie/en/birth_family_relationships/cohabiting_couples/rights_of_unmarried_couples.html

Heres Johnny

If unmarried and no will, its a potential minefield. However you could take out a separate life insurance policy to give the surviving partner cash to have options. Talk to an advisor and a solicitor. If you any way close to Dublin I know 2 guys I'd be happy to recommend as I have had to set up something somewhat similar myself.

Glen_Quagmire

Thanks all, was unsure about it but that clears it up for me

Hack12

They can will the property to there partner but it would be subject to CAT/Inheritance Tax where if you are married there is no tax implications.

Also if you are not married in Ireland your home is not legally a family home as a family home is defined in law "where a married couple reside" i.e. you and your partner are married with no kids the house is a family home in law vs you are not married but have children it is not a family home. Marriage is the defining factor which a lot of people are unaware of.

You can take out an insurance policy to cover any tax liability on death but ensure a will is in place or could lead to WW3 with family members and even then they may contest the will.

If you do get married the property becomes a family home legally and although you may not be on the mortgage (easy enough to get added) your partner cannot borrow further mortgages without joint consent and both would have to go on the mortgage if any further borrowings required on that property.

Glen_Quagmire

Hack12 wrote:

If you do get married the property becomes a family home legally and although you may not be on the mortgage (easy enough to get added) your partner cannot borrow further mortgages without joint consent and both would have to go on the mortgage if any further borrowings required on that property.

That was my next question, what is the process to get added to a mortgage and how does this effect the mortgage protection? For example if the partner gets added to the mortgage, does the mortgage protection cover both parties if something were to happen the other?

Hack12

If not married then it is a little more complex as no legal reason for the person to be on the mortgage and any legal person would advise against it as you are giving up an asset. They probably would stipulate the person buys into the property and the property is held in what is known as "Tenants in Common" where it sets out the % each party owns.

As for getting onto a mortgage your bank can do it but again they would insist on legal advice and no requirement for them to do it vs if married they have to.

In relation to mortgage protection it depends on the policy to be honest. Some are single life so pay out on debt of first person death, some dual so pay out on each debt etc.

Best advise is speak with a GOOD solicitor and figure out what is best for your situation.

splinter65

Speak to a recommended solicitor. Remember if you put someone else's name on the mortgage and make them joint owners of your house then it would be very difficult to remove them subsequently.
Get good advice.

jlm29

There’s a difference between putting someone on the mortgage, and putting them on the deeds of the house. My understanding is that if you want to do both, it will be subject to CGT. You could put them on the mortgage without putting them on the deeds, and avoid the CGT, but that seems pointless really- and I can’t see why they would agree to it. If they live in the property for a certain period, they will have some claim on the house regardless, but it’s probably very complicated in the event of the death of the mortgage holder/property owner.
Really your best bet is to make an appointment to meet with a solr

bidiots

jlm29 wrote: »

There’s a difference between putting someone on the mortgage, and putting them on the deeds of the house. My understanding is that if you want to do both, it will be subject to CGT. You could put them on the mortgage without putting them on the deeds, and avoid the CGT, but that seems pointless really- and I can’t see why they would agree to it. If they live in the property for a certain period, they will have some claim on the house regardless, but it’s probably very complicated in the event of the death of the mortgage holder/property owner.
Really your best bet is to make an appointment to meet with a solr

If unmarried but have kids, could you will the house to the kids and have the partner as guardian, avoiding CGT?

jlm29

bidiots wrote: »

If unmarried but have kids, could you will the house to the kids and have the partner as guardian, avoiding CGT?

I doubt it needs to be willed- I think it would go to kids automatically, but I’m really not sure. It’s hard to get definitive answers from google!!! I write this as someone who is unmarried, with kids, and living in my partners house!! I have concluded that the easiest thing is to get my act together and marry him!

Heart Break Kid

The partner (non owner) can claim to be a cohanitant and may be entitled to maintinence regardless if children are involved. Be sure to have your partner sign a waiver that they will not claim should you split up.