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The ultimate personal finance question, answered: should you invest with your partner?

To invest or not to invest with your partner? This is one of the most frequently asked questions from couples who are a) in a de facto relationship, b) already have an established investment portfolio or c) have previously been burnt and would prefer to keep their investments separate. Does sharing life together mean you have to share finances?

Whether you’ve opted for traditional marriage or simply living together, there are several factors you need to consider before making the final decision about whether or not to invest with your partner.

What is your partner’s credit history like?

If your partner comes with financial baggage—debt collectors hounding them, several unpaid credit cards, has been declared bankrupt and a multitude of other credit sins—this may affect any home loan applications required to secure investment properties or other assets. Joining forces to invest only works if you both have a good credit history.

What are the tax implications?

One of the main things couples forget to take into consideration are the tax implications when they move in together. Only the main residence (family home) is exempt from capital gains tax (CGT). This can get tricky if you’re a late bloomer or mature couple who don’t get married until later in life, it’s not unusual to already have an established property. Calculating your CGT implications can be messy, so check with a proven tax professional about your future tax obligations before expanding your investment portfolio.

What if you can’t agree on what to invest in?

Even the most loved up couples on earth can have disagreements on where to invest their savings. If you are mismatched in portfolio goals, it’s only a matter of time before things come to a head. You might be a bit of a risk taker, wanting a fast return; your partner might be of the opinion that meticulous research and weighing up all the pros and cons before commitment to expanding your investment goals.

Do you trust your partner?

If you are coming into the relationship with financial assets, you may want to consider a

Binding Financial Agreement that protects what you’ve worked hard to build up prior to entering a relationship. In the initial throes of love, it can be easy enough to convince yourself you’ll never need a prenup. Fast forward a decade and you may change your mind. NSW courts recently bought in a law that says even if your partner didn’t contribute financially to a relationship, they still may be entitled to a share of your assets, half the property and our superannuation.

Gerry Incollingo is the MD of LCI Partners which is a firm that specialises in accounting advisory, lending, wealth, property, insurance, and legal. Remember, this isn’t financial advice. Research and make your own decisions.

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