When someone dies without leaving a valid Will, they are said to have died intestate and the rules of intestacy automatically apply. This means that the law dictates who will inherit your assets in this situation. These laws are very outdated and do not make any provision for unmarried couples nor for step children.
It has been reported that cohabiting couples are the fastest growing family type according to official figures, with the number of cohabiting couples more than doubling between 1996 and 2016 (from 1.5 million to 3.3 million). At the same time, marriages have been declining and marriage rates for opposite-sex couples were the lowest on record.
Many people believe that by living with a partner, in a manner akin to ‘husband and wife’, or having children with them, means that they are automatically entitled to a share of the other’s wealth. However, this is quite simply not the case. The only way a cohabiting couple can ensure the other is looked after following their death is by writing a Will and making provision for their partner. By not doing so, they could leave their partner without any financial support and in financial hardship. Your partner may find that they have to apply to the court to make a claim against your estate for financial provision, which can be a very lengthy, costly and arduous thing to have to do. They may also be in the very difficult situation of having to claim against their own children, who may well have a prior right to your estate under the rules of intestacy.
Until cohabitant rights are enshrined in law, it is essential that cohabitants take specialist advice as early as possible to ensure they are each protected properly in the event of either one of them dying.
Where property and assets are purchased in joint names, it is often sensible for a declaration of trust to be drawn up when purchasing the property which helps set out each person’s interest in it. This can provide some protection for cohabiting couples. There is an important distinction between joint tenants and tenants in common and you should understand what these mean in the event of the other’s death. You may also need specialist tax advice regarding inheritance.
If property is held as joint tenants, then this automatically passes to the other by survivorship following death. Although, this provides some benefits in terms of your partner inheriting, this does not provide sufficient protection for your loved ones from future creditors and claims. It is always sensible to talk to a Will Writer and Estate Planner who will be able to advise you not only the best way to protect your partner but also how to ensure your assets are protected and your loved ones safeguarded.
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