In recent years, the total number of cohabiting couples has increased significantly from around 1.5 million in 1996 to roughly 3.6 million in 2021. In addition to this, in 2020, 18% of couples that lived together were cohabiting rather than being married or in a civil partnership.
With the number of couples choosing to cohabit with their partners increasing in popularity, it is important that couples are aware of the legal ramifications in respect of their assets and what happens to them if a person in a cohabiting relationship passes away. Below, we have answered some questions regarding this.
I am cohabiting with my partner. What will happen to my assets after my death?
In England and Wales, when a person dies, what governs who their assets pass to depends on whether that person has left a Will. If there is no Will, then the rules of intestacy apply.
Some people might reason therefore that if they don’t get married, then they can preserve their assets, perhaps for their children from a previous relationship, as the assets will not automatically pass to their surviving partner.
Under the intestacy rules, regardless of how long a couple has been together, or even if they have children, if they are not married or do not have a civil partnership, then the surviving partner will not automatically inherit.
Relying solely on the intestacy rules, however, carries risks. The law of survivorship may still mean that joint assets pass to the surviving partner.
Survivorship laws
The law of survivorship means that if a couple owns property together, for example, their home, or cash, such as a joint bank account, then provided this is held in a way that is called ‘ joint tenants’ when one partner dies, that joint property will pass automatically to the survivor of them despite what the intestacy rules say.
So, if couples do think that by not getting married they have protected their assets so their own children can inherit, perhaps in the case of the family home, then care needs to be taken to check how that property is owned.
Make a Will
Aside from this, relying on the intestacy rules to deal with your estate is risky and it is always advised that people seek expert advice and make a Will.
Making a Will allows an individual the opportunity to:
- Say who they wish their assets to pass to;
- What proportion goes to who;
- State the appointed executors who will carry out the terms of the Will; and
- Can cover inheritance tax planning and make use of Trusts.
It can also outline funeral wishes.
The intestacy rules do not allow as much flexibility as a Will, and those couples who do choose to marry or enter into a civil partnership, should not seek to rely on them rather than making a Will because they believe the intestacy rules will mean only their spouse or civil partner will inherit.
If there is no Will but the deceased was married or in a civil partnership then their children will also have an automatic right to inherit and the assets will be divided between the spouse or civil partner and their children in a very rigid way.
If the deceased wasn’t married or in a civil partnership and had no children then whether other relatives will inherit under the intestacy rules will depend upon their legal relationship with the deceased and what other family members are living.
If the concern is to preserve certain assets for the children of a previous relationship, then a Will can be of great assistance. An expert can help decide how to balance a wish to benefit children and provide financial security for a partner.
Trusts
Trusts can be particularly useful and may allow individuals to create an arrangement where a partner can continue to live in the family home for as long as they wish, or until their death, at which point the proceeds of a sale can pass to the children.
Other types of Trust can help provide a partner with an income from assets that are ultimately protected for the children. Expert advice is recommended as Trusts can have an impact on inheritance tax planning and also on planning for the payment of long-term care.
Cohabiting may be a lifestyle choice for an increasing number of couples, but to ensure the wishes of an individual in respect of their assets are granted following death, it is essential people seek professional advice and make a Will.
How can Nelsons help?
For more advice or to comment on this article, please contact a member of our expert Wills, Trusts and Probate team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.