Graham picks up from last month's relationship and money advice, drawing from his own recent adventures.
UPDATE FROM LAST MONTH: ... Yes ! We now have agreement on when the relationship started ... I was wrong and I'm not afraid to admit it.
Rebecca is away in Australia so I feel as though I can make rapid progress with this article, so here goes ...
One of the most common unspoken agreements between partners is that they start off by assuming that whatever they bring into the relationship, if it all falls apart, they will take out.
For example, if I bring in a house and Rebecca does as well then if the unthinkable occurs and we split, then we both take our respective houses out. Easy.
However, a first level of complexity arises here: What if one of the houses is a rental and the other is the shared family home? How do we cover costs and who pays for what? What happens if we need new carpet and, most importantly, who gets the biggest wardrobe? What happens if I've spent my summer painting and renovating my partner's house?
The next level of confusion can crop up if we buy something together and need to use the existing properties as equity contributions.
One way to manage all this is to identify, in dollar terms, the net position of each party and document that. So Rebecca enters the relationship with say $750,000 net position (market value of house less mortgage debt) and I bring say $500,000. We combine our assets and if the unthinkable occurs we split our combined assetts Rebecca gets her $750,000, I get my $500,000 and the left over is split in an agreed manner.
This is now hurting my head and I can't agree on the way forward. Rebecca is out of town. I'm off to get some legal advice from my solicitor Katherine Mexted and will report on progress.
Graham Goodisson is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.