Having a Will is arguably one of the most important things you can do for yourself and your loved ones. If you are cohabiting, it is important to have a valid Will in place to ensure your partner is provided for when you are no longer here.
The law falls short of providing legal protection for cohabiting couples
The most recent report from the Office for National Statistics (ONS) on the make-up of households in the UK has shown that more couples than ever are choosing to cohabit, being the fastest growing family type in the UK. Despite this increase, the government has recently rejected proposals for cohabitation law reform put forward in the Woman and Equalities Committee’s recent report. The report highlighted the lack of legal protection afforded to cohabiting couples, with Resolution signifying their position as one of ‘legal limbo’. While societal changes have come to accept cohabitation as a viable alternative to marriage, the law has struggled to embody such values and falls short of providing requisite legal protection for cohabitating couples.
Laws of Intestacy in the UK
If someone dies without making a valid Will, they are said to have died ‘intestate’, and their estate must be distributed in accordance with the intestacy rules. While the intestacy rules cover many different categories of people including spouses, children, parents and siblings, it overlooks cohabitees. Unlike married couples, cohabitees do not have an automatic right to inherit their partner’s estate.
A cohabitee could make a claim under the Inheritance (Provision for Family and Dependents) Act 1975 to be made reasonable financial provision. However, these claims are highly contentious and can only be made if the cohabitee lived with the deceased for a period of 2 years ending in the death and/or was being maintained by them immediately before death. The best way to provide for your cohabiting partner is to designate them as a beneficiary in your Will. Having a valid Will ensures that your estate will be distributed according to your wishes, rather than according to the rules of intestacy.
Case Study
Adam has been in a relationship and cohabiting with Eve for 20 years. They are not married and have no children together. Adam has one estranged brother. If Adam dies without a valid Will, he will die intestate and the rules of intestacy will apply to his estate. Under the intestacy rules, his brother will inherit his estate, and Eve would not receive anything.
Inheritance Tax
Key recommendations in the report included reform to the inheritance tax position for cohabitating couples, particularly for those that die ‘intestate’. Married partners do not have to pay any inheritance tax on assets or gifts left to them by their spouse up to a value of £325,000, with inheritance tax paid at 40% on anything above this threshold. There remains no exception for cohabiting couples.
When creating a Will, we can advise you on the best approaches to inheritance tax planning to suit your individual circumstances. Intelligent planning can help you to minimize tax liabilities after death.
The existing lack of legal protections can leave bereaved cohabitants financially vulnerable during very difficult and emotional times. As such, it is extremely important for cohabiting couples to have a valid will in place. If you would like to speak to one of our specialist Private Client Solicitors about your Will, please contact us on 01244 312306 or law@oliverandco.co.uk.
