Wills for cohabiting couples are an essential component in financial planning and providing for the future. According to the most recent statistics, the number of cohabiting, but unmarried, couples doubled to 3.3 million in 2017, up from 1.5 million in 1996. Given the increasing number of people who are choosing this as their relationship status, it might be assumed that there is legal protection in place if one partner in a cohabiting couple dies. However, the reality is that – when it comes to inheritance, passing on property and caring for children and dependents – the law leaves couples in this position completely unprotected. Given the negative legal implications of being unmarried (and not in a civil partnership), Wills for cohabiting couples are an essential precaution.
Cohabiting couples and intestacy
The law of intestacy covers what happens to an estate when someone dies without a Will – it applies very differently to married couples (or those in a civil partnership) than to cohabiting couples. Perhaps the most essential point to note is that the law of intestacy doesn’t give cohabiting couples any rights. If one person dies then the other partner is not entitled to anything as a result of being in a relationship and cohabiting. This is, of course, very different to being married where a range of legal entitlements arise for one partner if the other dies. These examples illustrate the situation very simply:
- John and Sarah have been cohabiting for a decade but are not married. John has £50,000 in savings and a company pension. John dies suddenly but Sarah is not entitled to any of this. Instead, it all passes to his closest living relative (his sister, Anne).
- Sam and Sally are married. Sam dies leaving behind £100,000 in savings and £100,000 in investments. Sally is entitled to everything. In fact, she is entitled to the first £250,000 of everything that Sam owns, and would be entitled to 50% of what he owned above that figure if they had children.
- Tom and Jenny are not married but have one child – Mary. Jenny dies suddenly leaving behind £400,000 in savings. This money will bypass Tom and go directly to Mary. Mary is 14 and so the £400,000 will be held in trust for her until she is 18.
What many cohabiting couples don’t realise is that there is zero legal protection for this type of relationship, as it is not recognised in law. “Common law spouse” is a term that is often applied to couples who are living together but not married or in a civil partnership. However, this relationship status has no legal recognition and so provides no legal protection. That’s why Wills for cohabiting couples are so essential to ensure that property and assets are handled as per the deceased’s wishes.
Cohabiting couples – specific assets
- Cash in the bank. If one partner in a cohabiting couple dies, any cash in the bank under their own name will be the property of their estate and the other partner will have no access to it. With respect to a joint account, the surviving partner will retain access and be entitled to the money within it. However, a proportion of it will be taken into account when calculating the estate of the deceased partner.
- Debts. Any debts that are held jointly by a cohabiting couple may become the sole responsibility of the surviving partner.
- Property. This will depend on how the property is held by the couple. If it is as Tenants in Common, then when one person dies without a Will their share of the property will pass to their estate i.e. not the surviving partner. If the property is held as Joint Tenants then the share belonging to a partner who dies automatically passes to the surviving tenant.
Cohabiting couples and children
Where children are concerned, Wills are particularly key for cohabiting couples. Partners who have parental responsibility have legal rights when it comes to their children and can make decisions about key aspects of their lives, such as where they live and how they should be educated. A mother who gave birth to a child automatically has parental responsibility but the father doesn’t unless certain circumstances exist, for example he was married to the mother at the time of the birth, got married afterwards or his name appears on the birth certificate. For cohabiting couples issues can arise if a partner with parental responsibility dies and the surviving partner doesn’t have parental responsibility. If there is no parental responsibility and no Will appointing the surviving partner as guardian then this can mean the survivor has no legal right to ensure the child remains with them.
Making a claim against the estate
A surviving unmarried partner can make a claim against a deceased partner’s estate under the Inheritance (Provision for Family and Dependants) Act 1975 if there is no Will. Such a claim is designed to provide such reasonable financial provision as is necessary for the maintenance of the surviving partner, taking into account factors such as their own financial circumstances and the value of the estate. However, there are no guarantees to entitlement and the process can be time consuming and expensive – it is much simpler to have a Will in place.
Benefits of Wills for cohabiting couples
– Ensuring that the surviving partner is entitled to cash or assets that the deceased would wish them to have.
– Providing security where property is concerned – for example if a property is held as Tenants in Common and the deceased’s share is left to the survivor in a Will there is no threat to property security. If there is no Will, a proportion of the property may become legally owned by someone else (the deceased’s closest living relative) and this can create serious issues, especially if that person wants to sell.
– Peace of mind where children are concerned, both with respect to inheritance shares and how they will be cared for (and who by) up to the age of 18.
– Avoiding a situation where a surviving partner is forced to go through the process of making a legal claim on the deceased’s estate.
– Minimising the potential for further heartache and/or issues with relatives who have inherited – as a result of the intestacy rules – what the deceased partner would have wished the survivor to have.
– Effective estate planning to help minimise the impact of inheritance tax, where applicable.
Wills for cohabiting couples provide security and peace of mind for the future. Although it’s not possible to predict when tragedy might strike – or to avoid it – with a Will in place, cohabiting couples at least have some protection against the legal implications of being unmarried if one partner dies.