Unmarried couples beware!
Many people choose to live together or cohabit, rather than get married or enter into a civil partnership. It’s a popular saying, but there’s no such thing as a “common law” husband or wife in law. The rights of cohabitees, are limited compared to married couples and civil partners, particularly on death.
If you die without a Will, the laws of intestacy will apply and an unmarried cohabitee has no automatic right to inherit any part of your estate. It might be possible for them to make a claim against your estate through the Courts, but this can be costly and stressful at a time when they are grieving your loss.
Unmarried couples are also treated differently for Inheritance Tax. They do not qualify for the ‘spouse exemption’, where assets passing to a surviving spouse are usually free from Inheritance Tax.
If you don’t want to get married or enter into a civil partnership, here are some options:
Write a Will setting out clearly who you wish to benefit after your death. It’s essential to protect each other.
Property Review how your assets are held. Joint assets may pass automatically to the surviving partner, but if your home is held jointly as tenants in common then your Will (or intestacy) determines who inherits.
Pensions Complete a nomination form so that benefits can be paid to your partner. This often speeds up payment and the payment may also fall outside your estate for Inheritance Tax.
Inheritance Tax Take advice on your position and consider tax planning options. If the tax bill is still too high, you might even consider getting married to beat the tax man!