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Living together?

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Why making a Will is so important

According to the latest figures from the Office for National Statistics approximately 5 million couples are cohabiting. There is a common misconception that if you have lived together for a certain amount of time, or have children together, that you are classed as a “Common Law” spouse, and therefore entitled to financial provision if your cohabitee passes away.

Unfortunately, it is irrelevant how long you have lived together, or whether you have children, if you do not have a Will in place the surviving cohabitee has no automatic legal rights.

Intestacy rules

Without a valid Will, the rules of Intestacy would apply and unfortunately a cohabitee is not included in the list of beneficiaries who would be entitled under an Intestacy. This would mean that it would be necessary for a cohabitee to try and make a claim under the Inheritance (Provision for Family and Dependants ) Act 1975, which can be costly and time consuming, during what is already a stressful and upsetting time. Furthermore, financial remedies to a surviving cohabitee can be less generous than for a surviving spouse.

Jointly owned property

If cohabitees own property jointly it is important to look at how that property is owned. If owned as “Joint Tenants” the share of the deceased cohabitee passes automatically to the survivor. However, if the property is owned as “Tenants in Common” the share passes in accordance with the Will of the deceased, or the intestacy rules if no Will is in place. This can create all sorts of stress and difficulties for the survivor, who may be forced to sell the house if there is a disagreement.

Children

In addition, it is common for cohabiting couples to have children from a previous marriage that they would wish to provide for, and at the same time make financial provision for their cohabitee. This is especially important in cases where one cohabitee is the sole owner of the property, as the non-owning cohabitee would not have any legal rights to live in the property. In this situation it may be appropriate to make provision for the non-owning cohabitee to live in the property for the rest of their life, or a certain period of time, thereby giving them security and stability.

Inheritance tax

Making a Will as a cohabitee not only provides security and stability to the survivor, but can also save Inheritance Tax. Cohabitees do not benefit from the Tax advantages of married couples therefore if their estate exceeds £325,000, Inheritance Tax could be payable at 40%. A professionally drafted Will can incorporate Trust provisions which can help to minimise such Tax liability.

It is also worth bearing in mind that if you make a Will and then subsequently get married, your Will could be automatically revoked unless specific provision has been made in your Will.

It is therefore extremely important to regularly review your Will, especially at times of important lifetime events such as marriage/cohabitation, having children, or buying a property.

If you would like any further information about the above issues, please contact Sarah Dawson from our Wills, Tusts and Probate Team on 01733 882800 or email via [email protected].


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