A survey by the Co-operative Bank found that married and cohabiting couples have a total of £41billion debt that their partners know nothing about.
One in seven men admitted concealing debt compared with one in ten women. On average, men owed £14,228, while women had debts of £22,418. Just over one in five people said they keep their finances separate from their partner and don’t have any form of shared bank account.
The findings obviously raise moral issues but even if we only consider practical matters, the figures are alarming because couples could be liable for each other’s debts. If a relationship breaks down or one of the partners dies, the remaining partner could in certain circumstances be legally bound to pay off large sums even though they are totally innocent and had not got
into debt themselves.
The Co-op research also revealed that at the other end of the scale, couples were investing a total of £22.8billion into secret accounts without telling their partners. This is equally worrying, especially for cohabiting couples who don’t have the same legal rights as married couples.
If the partner with the secret account dies, the money invested may go to their family rather than the surviving partner because cohabitants have no automatic right of inheritance.
Secret accounts could also create problems when a couple divorce. They are legally bound to declare all their assets. If they fail to do so they could face severe legal consequences.
It’s important for couples to be honest and open with each other about their financial affairs. If they’re not, they could create financial and legal problems for both themselves and their partners.
Many couples get their relationship on a firm financial footing by drawing up m
arital or cohabitation agreements, detailing their assets and stating how those assets should be divided if the relationship breaks down. ]
Please contact us if you would like more information about the issues raised in this article or any matter relating to wills and probate, divorce settlements or marital and cohabiting agreements.
