Here are some of the financial dangers an unmarried couple may face when they take out a joint mortgage:
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Responsibility for mortgage payments: If one partner dies, the surviving partner becomes solely responsible for making the mortgage payments. If the surviving partner cannot afford the payments, they may risk losing the home to foreclosure.
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Inheritance tax: In the event of a partner's death, their share of the property may be subject to inheritance tax. This could mean that the surviving partner may have to sell the property in order to pay the tax.
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Ownership of the property: If the couple did not have a Last Will and one partner dies, their share of the property will pass to their heirs. This could cause complications if the surviving partner wants to sell the property or buy out the heirs.
- Disputes with family members: If the deceased partner's family members feel they are entitled to a greater share of the property, they may contest the ownership of the property in court. This could lead to legal battles and potentially a forced sale of the property.
The problem here is obvious; if each person does not have a Last Will naming their partner as their sole beneficiary each is taking a huge financial risk.
