Honesty always best partnership policy

Joint credit agreements should never be entered into without knowing all the facts. Picture: Getty

IRRESPECTIVE of the precise nature of our relationship with our partners, it is an uncomfortable truth that many of us do not know as much about them as we might like to think.

While “hidden secrets” are often restricted to trivial and sometimes even amusing traits, these are often darker and, indeed, can become ever more so during the course of the relationship.

Celebratory speeches at the start of a marriage or civil partnership often lay stress on such things as a shared sense of humour and basic ideals. An experienced lawyer, though, would always lay more store by honesty and trust.

With uncertainties, in many fields, still riding high and with social pressures (in such forms as holidays, larger houses, school fees or medical insurance) ever greater, it is far from uncommon for the main wage-earner in a relationship not to be totally open with his or her partner as to the ability to keep up with all household payments, particularly without having to go into debt.

It must also be accepted that a great many breadwinners are now storing up woefully inadequate premiums in the “retirement granary”. Consequently, many partners must brace themselves for an unwelcome surprise when the level of annual pension is revealed on the morning of the retirement party hangover. And with increased life-expectancy (and the cost thereof), windfalls from the senior generation can no longer be relied upon to “top up” what, post-retirement, can be a dramatic dip in income unmatched by a similar one in expenditure.

While the signs of financial over-exposure are often there (betting slips, a plethora of credit cards or other evidence of borrowing), it is all too easy, in the sheer “busyness” of everyday life, to gloss over them. Similarly, it is all too easy for a partner blithely to accept lies about the state of any career, along with talk of phantom promotions or non-existent bonuses.

Other tell-tale signs might include being first to the mail on the doormat (and then ignoring much of it) or, indeed, to the telephone, “dodging” calls, sleeplessness, using a credit card for a payment that would customarily be made in cash, having a pile of credit cards when one would do and even getting involved with pay-day loans.

While one cannot be made to pay a partner’s debts, those with joint finances such as a mortgage, loan or a bank account with an overdraft need to be aware that the lender will consider both parties to be “jointly and severally liable”. Where a partner (or his or her executors) cannot or will not pay, the other can be pursued for the entire debt.

Crucially, for many couples, where a partner is declared bankrupt and there is equity in the shared house, the “other half” could be forced to sell or buy the partner out.

Given the above, it almost goes without saying that joint-credit agreements should never be entered into without knowing all the facts. If giving someone else the power to borrow money in one’s name, be prepared for the consequences.

Even at a time of allegedly receding recessionary problems, it is a cruel fact that secrecy over money or, more accurately, a lack of it, lies at the heart of one in ten relationship breakdowns.

Should you break up with a spouse, it is strongly advised that you inform credit reference agencies and that a “notice of disassociation” is filed, informing potential future lenders that you no longer have financial links with your former partner. Financial separation from a previous partner also protects personal credit ratings for the future.

A partner’s death might well result in creditors seeking to reclaim debts from the estate, although they are not entitled to pursue the surviving partner for payment from his or her own funds, except in respect of joint debts.

Death can also bring with it an unwelcome sting in the tail. Particularly in the case of second marriages, eg does the deceased’s will actually say what the survivor was always assured that it did?

Those who cannot bring themselves to confide in their partners, children or close friends can only be encouraged to confide in their lawyer. He or she can bring objectivity, experience and possible solutions to situations that, in the wee small hours might seem insurmountable.

A lawyer can also be trusted to take steps towards “preserving the myth” after your death. Over many years of professional practice, it has been not uncommon for me to follow an instruction to be “first into the house” to remove (and thereafter destroy) evidence of things of no value that provided diversions in life but might cause embarrassment in death. “Secrets” really do go beyond the grave.

• John Scott Moncrieff is a partner with Murray Beith Murray

www.murraybeith.co.uk