Cohabitating couples and Estate Planning

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According to the most recent data from Office for National Statistics, the proportion of people who live together but who are not married or in a civil partnership has increased from 20.6% in 2011 to 24.3% in 2021. They have seen an increase across all age groups under 85 years.

There is a misconception that “Common Law Marriage” is a recognised legal status in the UK. However, it is important to note that, regardless of how long you have been in a relationship with somebody and have lived with them, this is not the case.

Hence it is very important for Cohabiting couples to have a plan in place so as to ensure that things are dealt with as they intend when they die.

What if my Partner dies and has not left a will.

When a person dies without leaving a will, they are described as having died intestate, which means that their estate will be distributed according to the rules of intestacy.

  • If a person dies with a surviving spouse and no children, the spouse is entitled to 100% of the estate.
  • If a person dies with a surviving spouse and children, the spouse is entitled to the personal chattels and a legacy of up to £322,000.00. The remainder of their estate, if any, is then divided 50% to the spouse and 50% to the children.
  • Where there is no surviving spouse and there are children, the children receive 100% of the residuary estate.

The rules further provide for how the estate is distributed to more distant relatives if no spouse or children survive the deceased.

This means that if your partner dies without writing a Will, you will not be automatically entitled to receive anything from their death estate (assets in their sole name or owned as tenants in common) if you are neither married nor in a civil partnership.

Let’s consider a cohabiting couple A and B who have no children. If A were to die survived by parents, then A’s parents will receive the whole of A’s sole estate and B would get nothing.

The parents may choose to give B some of their inheritance, but they are not required by law to do so and this could leave B in financial difficulties.

Indeed, B may even be forced to sell their home to ensure the parents receive their entitlement.

It is important to note that assets owned jointly such as bank accounts, investments or property held as joint tenants, will pass to the survivor automatically and will not pass under the rules of intestacy.

Whilst a disappointed cohabitee could make a claim against the estate of the person who has died, this can be both time consuming and expensive. The merits of the claim will depend on many factors and there are no guarantees of success.

To avoid these issues, it is best to ensure you both have a valid will in place.

 Inheritance tax

Turning briefly to inheritance tax, the rules favour spouses and civil partners rather than cohabitees.

In summary, each individual has a Nil Rate Band allowance which is currently £325,000.  You may also be entitled to the Residential Nil Rate Band allowance of up to £175,000, though this is only available if you leave the relevant share of a property that is or was your main residence at one point, to a child or grandchild.

In addition, any gift to a spouse or civil partner is entirely exempt from inheritance tax so a person who leaves their entire estate to their spouse or civil partner will be able to do so free of any inheritance tax on death.

When the surviving spouse or civil partner then dies, there may also be a transferable IHT allowances available depending on the circumstances.

If you are neither married nor in a civil partnership and you leave your estate to your partner, they will receive their inheritance less any inheritance tax which is payable after the relevant allowances have been offset.

To avoid these various problems, you and your partner should both write wills which provide for each other so as to ensure that your assets will pass as you wish rather than under the intestacy rules.

If you would like to make an enquiry, please contact Jamiel Zaman, or any member of the Wills, IHT, Trusts & Probate team.

Disclaimer: General Information Provided Only
Please note that the contents of this article are intended solely for general information purposes and should not be considered as legal advice. We cannot be held responsible for any loss resulting from actions or inactions taken based on this article.


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