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According to the Office for National Statistics, cohabiting but unmarried couples are now the fastest growing family type in the UK, making up around a quarter of couples living together. However, research from Will Aid last autumn found that 68% of cohabitees were unaware of what happens to their estate if they died without a Will. In fact, 32% mistakenly believed that their assets would pass to their partner, and 11% admitted to never having considered the issue!

The rights of people in what some call “common law marriages” are often misunderstood, leaving cohabitees vulnerable. While legally married couples and civil partners have specific rights and responsibilities in law, the same protections and mechanisms do not extend to cohabitees.

Below we explore some of the most common pitfalls through our example couple: Alex and Sam.

The scenario

Like many couples, Alex and Sam had been together for some time and, when they decided to live together, Sam moved into Alex’s property, which Alex owned solely.

Alex and Sam remained together for many years and were happy not to get married or enter a civil partnership. Tragically, Alex later died in an accident and, like an estimated half of UK adults (according to Canada Life research), Alex had not made a Will.

What happens to the property?

As above, it is a common misconception that Alex’s property would pass to Sam as Alex’s “common law spouse”. However, in reality, Alex’s assets would pass in line with the legislation known as the “intestacy rules”. Under these rules, spouses / civil partners and blood relatives are prioritised, and surviving cohabitees inherit nothing regardless of the duration of their relationship or whether they had children together. Sam could be left with no right to continue living in the property.

This stands in stark contrast to:

  • if Alex had made a Will, leaving the property (or certain rights in it) to Sam;
  • if Alex and Sam were married or in a civil partnership, where the intestacy rules would have entitled Sam to some or all of Alex’s estate; or
  • if Alex and Sam owned the property jointly (although there are different ways property can be jointly owned, with different outcomes on death).

What can Sam do?

Under the Inheritance (Provision for Family and Dependants) Act 1975 (the “1975 Act”), certain categories of people who have not been provided for under a Will or by the intestacy rules can make a claim against a deceased person’s estate for “reasonable financial provision”. Sam, having cohabited with Alex for at least two years before death, would fall into one of these categories.

However, making a claim under the 1975 Act is not straightforward, and legal advice, correspondence and court proceedings can be stressful, time-consuming and expensive, all at a time when Sam would be grieving the loss of a loved one. Sam would have to prove that they and Alex were indeed a cohabiting couple, that the intestacy rules failed to make “reasonable financial provision” for them, and also that the financial provision claimed for is “required” for Sam’s maintenance. The court will assess this based on various factors, including:

  • Sam’s age, financial resources, earning capacity and contribution to the “family home”;
  • the length of Sam’s and Alex’s relationship and cohabitation;
  • the size and nature of Alex’s estate;
  • the needs and circumstances of those standing to inherit under the intestacy rules; and
  • any other factors the court considers relevant.

Sam’s claim under the 1975 Act would also be far more difficult than for a spouse or civil partner, who does not have to prove to the court that the financial provision is “required” for their maintenance, and for whom “reasonable financial provision” is decided far more generously.

To make matters worse, Sam would also be making the claim against the people who stood to inherit under the intestacy rules i.e. Alex’s relatives including, if Alex and Sam had children together, Sam’s own children.

Would the worst be over?

If Sam’s 1975 Act claim were successful, Sam would inherit some of Alex’s estate. However, since they were not married or in a civil partnership, Sam’s inheritance would not be exempt from inheritance tax (“IHT”). This could be problematic, especially if the home represented a significant portion of Alex’s wealth. If there were insufficient assets to pay the IHT, the property may need to be sold.

Moreover, on Sam’s later death, IHT could apply again on the assets inherited from Alex, meaning the same assets could be taxed twice. Instead, Alex could have made a Will that would have enabled Sam to benefit from Alex’s assets, whilst keeping them outside Sam’s estate for IHT.

What should cohabiting couples do?

Choosing whether to marry, enter a civil partnership, or cohabit is a deeply personal decision, each with its own pros and cons. Even if Alex and Sam had owned their home jointly, the outcome of Alex’s unexpected death may not have aligned with their wishes.  There is no “one size fits all” solution.

It is crucial for couples, regardless of their marital status, to seek legal advice to understand how their assets are held and will pass on their deaths, and what options are available to them. Taking proactive steps can help to avoid the kind of pitfalls in this article.

If you are in an unmarried couple and would like to avoid the potential problems mentioned here, please contact Denise Li Gates, Jessica Brittain or any member of our Private Client team.

Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.

Edwin Coe LLP is a Limited Liability Partnership, registered in England & Wales (No.OC326366). The Firm is authorised and regulated by the Solicitors Regulation Authority. A list of members of the LLP is available for inspection at our registered office address: 2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH. “Partner” denotes a member of the LLP or an employee or consultant with the equivalent standing.

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