Cohabiting Couples - Three reasons why you need a Will
Did you know that around a quarter of all couples living together in the UK are unmarried?
Unfortunately, the law does not recognise the rights of cohabiting couples in the same way as married couples, no matter how long they may have been sharing a home. So, if you are living with your partner with no imminent intention of entering into a civil partnership or marriage, here are three reasons why you should put Wills in place:
Intestacy Rules
There is no such thing as a common law spouse for inheritance – this is a common misconception.
If you or your partner were to die without a Will, your estate would not automatically pass to the other. Instead, it would pass to your blood relatives in accordance with the intestacy rules and cohabiting partners may have no alternative but to make a claim against your estate through the Inheritance (Provision for Family and Dependants) Act 1975.
If you have children under 18, their inheritance may be put into a trust, and the appointed trustees would need to be a relative. This may mean that your partner could not access the money for your children’s benefit.
Tax planning
For married couples, any assets left to their spouse are exempt from Inheritance Tax. There is no such exemption for unmarried partners or cohabitees.
This means that if your estate meets the threshold for Inheritance Tax, your estate would be taxed on your death, even if you are leaving everything to your partner. When your partner passes away, they would be taxed again on both your inherited estate and on their own estate.
If you make a Will, there may be mechanisms by which you can reduce your Inheritance Tax liability (aside from getting married!) and we will be happy to advise you in this respect.
Property
If you own a property with your partner, you should not assume that they would receive your share in the property if you were to die. This would depend on whether you hold the property as joint tenants or tenants in common. If you or your partner own the property in their sole name, it would not pass automatically to the surviving partner even if you are living together.
We can confirm how your property is owned and advise you how to ensure your share passes in accordance with your wishes – whether this means it goes to your partner unconditionally, on trust for their lifetime, or to a third party. Depending on your circumstances, this may be necessary to ensure your partner will be able to live in your property or have full control over their home in the event of your death.
It’s worth bearing in mind that, if you do decide to marry or enter into a civil partnership, your Wills would be automatically revoked and you would need to enter into a new Will (even if they are on exactly the same terms!). If there is a possibility you and your partner may get married in the future, we can future proof your Will so don’t let this put you off!
For further advice or assistance in preparing your Wills, contact our Wills, Trusts, and Probate Team who will be more than happy to help. Contact the Team on 01603 610911 or email us on info@leathesprior.co.uk.