The importance of Wills for Cohabiting Couples

January 6, 2021, By

When it comes to the law, married or civil partnered couples’ rights and inheritance rules tend to make much more sense. Often, couples who live together, or ‘cohabiting couples’, can assume that their estate will be passed onto their partner after their passing. Sadly, this is not always the case, even if they have been living together for decades.

In this blog, we explain legal rights of cohabiting couples when it comes to wills and estate planning. We highlight the importance of watertight wills for couples who live together, so that your loved ones are looked after as you wish in the future.

It may feel slightly morbid to think about making provisions for after your death. In reality, planning now can help you to rest assured that your loved ones will be cared for and supported without going through difficult disputes with family members in future.

“Common Law Spouse”

There remains a myth that people who have lived or been together for a longer period of time are entitled to more. Unfortunately, this is not true. Legal rights for cohabiting couples are the same whether they have lived together for one year or one decade.

For long-term cohabitees, especially when there are children involved from a current or previous relationship, it is vitally important to make a will that explains exactly which people you want your assets distributed between.

In a worst case scenario, a partner may not get a penny from an estate with it all being inherited by a sibling or child. This is why a will must be created for cohabiting couples, no matter how long they have been together.

Inheritance Tax

Another area where unmarried couples can often lose out is inheritance tax (IHT). Did you know that people who are married or registered civil partners do not have to pay any Inheritance Tax on assets or gifts left to them by their spouse?

There remains no exemption for cohabiting couples.

Where assets exceed a value of £325,000, IHT is paid at 40% on anything above the threshold. Intelligent planning of your assets to best fit within the threshold may be one valuable way in which you can avoid heavy taxation on assets in death.

Click here for further guidance on inheritance tax planning.

When creating a robust will, we can talk you through the best approaches to IHT planning to suit your circumstances. This can help you to save a significant amount of money in the long run.

Laws of Intestacy in UK

Simply put, rules of intestacy come into action when someone dies without a will.

Under these rules, unmarried couples have no right to inherit when someone dies with no will in place. This should be warning enough to get a will written at the earliest opportunity!

  • Where both partners own a home as ‘joint tenants’, the property will be passed onto the other person upon death. If however, you are ‘tenants in common’, it is not automatically assumed that one half of the property will be passed onto the other partner. If you and your partner are looking to buy a house in the near future, this is a key consideration.
  • If you share a joint bank account, the money on death will pass to the surviving co-owner.
  • If you are divorced or have had your civil partnership dissolved, your ex cannot inherit under rules of intestacy
  • Children can inherit different amounts of the estate in different circumstances. Depending on the complexity of the family situation, they could inherit it all without any going to a cohabiting partner. Children can also often be favoured over a legally married or civil partnered spouse.

With all this in mind, making arrangements for whom your estate will be split between is crucially important to avoid upset and lengthy, costly disputes in the future.

Revoked Wills

When cohabiting couples marry or form a civil partnership, any will already in place is revoked. In most straightforward circumstances, this works well.

If, however, there are any children from a previous relationship involved, any will written in the past is eradicated upon marriage.

In order to ensure that all of your loved ones are catered for, it is so important to update your will immediately after marriage, or even prior, ‘in contemplation’ of marriage.

Lots of Considerations

We are well aware that there is a lot to take in, here. We hope to have highlighted how vital it is to create a thorough will, and to update it in line with any changes to your life or family setup.

What may seem overwhelming in the first instance, our expert team will explain in terms that are easy to understand. We’re here to help you make the best provisions for your loved ones, so you can rest assured that you will receive the highest quality guidance when it comes to estate planning.

Our wills, trusts and probate team comes extremely highly recommended by clients on Review Solicitors. Read some of our reviews here.

If you would like to speak with our team, please call us on 0161 969 3131 or fill in our confidential contact form and one of the team will be in touch.