Financial implications of marriage, cohabitation and registered partnership

Entering into a marriage, cohabitation or registered partnership are life events with significant impact. In addition to the personal aspects, these decisions also have financial implications. Here we discuss the financial considerations that are important when you embark on a life path together.

The financial implications of sharing life depend on the approach taken. For example, the legal framework differs between marriage, registered partnership and cohabitation. Although we do not go into the legal nuances in detail here, we do name the essential points of interest.

Home is not automatically common property

If you move in with your partner who already owns his or her own home, the home does not automatically become part of the joint property upon cohabitation or marriage. With a marriage in full community of property, this does apply.

Home ownership history may vary

When you jointly purchase a new first owner-occupied home, there is no joint history of home ownership. This situation changes if either of you has previously owned your own home. In that case, the homeownership history may also affect the other. This topic is complex and professional advice is recommended. In a marriage in full community of property, property and debt are automatically divided.

Insurance bundling

Evaluate what insurance policies you have individually and whether they can be combined. For example, if you both have liability or household insurance, it is often possible to combine them. Sometimes a partner can be added to an existing insurance policy, which usually comes with a modest premium increase, but lower than paying two separate premiums.

Joint pension assessment

When making the decision to move forward together, it is advisable to also examine your retirement prospects. How much pension have you built up individually? Is this sufficient to cover future rent or mortgage expenses? Even if you are still young, it pays to review your retirement situation together. Starting to build up a pension early enables optimal use of return-on-return and also requires a lower monthly deposit for the desired pension capital.

Also check that your partner is registered with your pension administrator. If you accrue a survivor's pension through your employer, your partner will receive a benefit in the event of your death. However, your partner must be registered for this. If you live together, you have to register your partner with the pension administrator yourself, often under specific conditions, such as a notarized cohabitation contract.

Meticulous financial administration

If you do not marry in community of property, it is advisable to keep thorough records. This is because in other cases there are both individual and joint properties. This is especially relevant when living together, where you are not automatically each other's heirs. Keeping track of purchases and investments can prevent problems in the event of divorce or death.

Entering a new phase of life, such as cohabitation, marriage or a registered partnership, has significant financial implications. Would you like to understand your financial status with regard to pensions, insurance and mortgages? Our advisors are ready to assist you with this. Feel free to contact us!