Cohabiting Couples Are The Fastest Growing Family Type Today
We are writing this article to draw your attention to potential difficulties that could arise for cohabitees. You may not be a cohabitee yourself, but you may know of friends or family who are and could benefit from you giving them the heads up. Couples who cohabit have less legal protection than those who are married or in a Civil Partnership, in the event of death.
The Women and Equalities Committee has recently launched an enquiry into the rights of cohabiting couples with a view to consider legal protections which could be introduced.
It is a long-held misconception that couples who cohabit have similar rights to married couples.
There are 3 key areas to consider:
1) If you have bought a property together
If you own the property as joint tenants, then the share belonging to the deceased partner will just pass to the survivor. If the property is held as Tenants in Common, then the deceased’s share of the property would pass under the terms of their Will or under Intestacy rules if there was no Will.
If the property is owned by only one of the couple, then the property will not pass to the surviving partner in the event of their death if there is no Will in place. This would leave the surviving partner with no right to stay in what they regard as their family home.
2) If either partner dies without making a Will – Intestate
Intestacy rules make absolutely no provision for a surviving cohabitee, irrespective of whether they have children or have been together for many years. There is legislation that permits claims to be made against a deceased persons estate for reasonable provision, however this would involve court proceedings which can be upsetting at a difficult time, as well as slow and very expensive. It could also mean the survivor litigating against their own children.
3) Inheritance Tax
If a couple are married or in a Civil Partnership, they can leave everything to their partner without having to pay inheritance tax, because spouses are exempt from IHT. However, on the death of a cohabiting partner their assets would be subject to inheritance tax on any value greater than the current nil rate band, currently £325,000. This could cause financial hardship to the surviving partner if they had to find the funds to pay the tax bill in the event of death.
If you have any questions or would like to discuss your situation with us, then please get in touch with us on 📞02476 388 911 or 📧 [email protected]
We also have associations with a small number of legal firms who specialise in this area of advice, we would be happy to introduce you to them if you would like an expert to review your current arrangements.