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What to do with your Love Island winnings
Amber and Greg were the winners of Love Island. Greg was given the option to steal the prize money in full for himself but decided to share it with Amber.
Will they stay together as a couple? Who knows? What if they did?
Of course Amber and Greg will go on to earn much more from sponsorships for products and TV appearances. However, back in the real world £50,000 is a large sum of money.
Perhaps they will choose to invest their winnings as a deposit for a property. They are not married. If they each put the whole amount into buying a property then, should they split up in the future provided the property is in joint names, they would each get the same amount out of the property.
But what happens if Greg puts his £25,000 down as a deposit on the property and Amber spends hers?
If they buy a house in joint names then separate in the future, the equity in the property would still be shared equally between them and Greg’s £25,000 would have to be shared with Amber even though she had originally spent her money. This is because the house is in joint names
How could Greg protect his money? There are several ways.
The first would be to enter into a declaration of trust with Amber on buying the property to say that when they sell the property in the future Greg would receive the first £25,000 of equity and any increase in equity above that figure would be split between them.
A better option, however, is to enter into a cohabitation agreement at the same time as they buy the property, to say that if they were to separate in the future, Greg’s initial deposit belongs to him. The deed would also confirm that any further increase in equity would then be divided equally between them. This would protect Greg’s initial deposit.
A cohabitation agreement is a more comprehensive document which can also regulate the terms of the parties relationship. It can include clauses to agree into which account they pay their salary and bills, and most importantly, what happens if their relationship ends. How are their assets to be divided?
If this is sorted out at the start of the relationship it makes things much easier in the event of a separation.
Whilst cohabitation agreements are not attractive to people in love, they are a necessary and sensible document to ensure fairness upon separation for cohabiting couples.