cohabiting family

Are you a cohabiting family?

The cohabiting family is the second largest family type in the UK, representing 3.3 million families, and growing. But this popular form of family type suffers from a legislative gap in the UK compared with those who are married or in a civil partnership, meaning that those who cohabit lack certainty on their position in the event of a relationship breakdown or the death of their partner.

Statistics reveal that the majority of cohabiting couples are unaware of this uncertainty. Two thirds of people who are cohabiting believe the ‘common law marriage myth’, that is, if they are together long enough, they will be treated as if they were married by law. Devastating problems can ensue when one of a cohabiting couple dies without making provision for the other.

Potential problems for cohabitants on the death of their partner:

  1. Lack of provision in the deceased’s partner’s Will: If a partner dies intestate (without having written a Will) and having made no provision for their cohabiting partner, the surviving partner would have no automatic right under the intestacy rules to the deceased partner’s assets. For some the only way to access their partner’s assets would be through bringing a claim under the Inheritance (Provision for Family and Dependents) Act 1975. And in the worst case scenario, the surviving partner may need to bring a claim against their own child who may have an automatic right to inherit.
  2. Bank accounts in sole name:If bank accounts are held in the sole name of the deceased partner, again the surviving partner has no automatic right to inherit anything in the accounts. The situation is different if the couple were married or in a civil partnership, and held the account jointly. In this situation, on the death of one of the couple, the account would automatically go into the name of the surviving partner.
  3. Inheritance Tax:Married couples/those in civil partnerships are able to benefit from transferable allowances, whereas cohabiting couples cannot. As a result, they face higher inheritance tax bills.
  4. Lifetime gifts: Gifts made during a married couple’s/those in civil partnership’s lifetime to their spouse are exempt for IHT purposes. This is not the case with cohabitating couples, because if they make a gift to each other during the 7 years before their death it can become taxable.

How cohabitants can protect themselves

Ensure you have made a valid Will making provision for your cohabiting partner and children. We are highly experienced in making watertight Wills for those who wish to provide for their partners and would be happy to assist you with this. We can also create Wills for homeowning partners that reduce Inheritance Tax and protect assets from a new cohabitation partnership or marriage after the death of the first cohabiting partner.

It is understandable why the government would not want to undermine the institution of marriage, however the number of people who co-habit and suffer from the lack of legal protection cannot be ignored. There is a clear need for UK law to recognise cohabitation as a legitimate family status, and provide cohabiting partners with certainty over their future if their partner is no longer around.

If you would like to meet one of our Consultants and discuss any of the issues raised in this article or any other Estate Planning topic, please telephone 01732 868190 or click here.

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