Over the years, I’ve met many people in relationship which have lasted for many years, often with children together, who have never married nor have any intention of doing so. Reasons for not marrying rarely include any objection to marriage in principle. It’s just “we’re happy as we are; we don’t need a piece of paper to prove the strength of our relationship”.
Marriage is, of course, a legal relationship that’s much more than a ‘piece of paper’ and while ‘marry in haste; repent at leisure’ remains as good advice as ever, for couples in a mature, long-term relationship, marriage (or civil partnership) makes much legal, practical and financial sense. And whilst I refer to marriage, the same rules/comments apply to civil partnerships.
Death…
If your long-term partner dies, the starting point is that, if you’re not married to them and there’s no Will, you inherit nothing. If your partner leaves children, those children will take the whole estate. If there are no children, everything will pass to your partner’s parents, siblings, or other family members under the Intestacy Rules. You’ll be left trying either to argue that some of the assets in your partner’s sole name were actually jointly owned or to bring an action for reasonable financial provision (for your 'maintenance' and no further) under the Inheritance (Provision for Family and Dependents) Act 1975. Not only might you be suing your own children, but a fair chunk of your partner’s estate will be disappearing in legal fees.
The solution to these issues is simple. Unless all the assets are in joint names and pass automatically to the survivor on death, both of you should visit your solicitor and make wills.
It’s fair to say that the Intestacy Rules rarely work perfectly when a couple is married. A set of rules necessarily designed to be 'one size fits all', rarely fits any family circumstance very well so even for married couples wills reflecting your wishes should be drawn up..
… and Taxes
From almost every tax angle, marriage is 'good news'.
If you’re married and leave everything to your spouse, the estate is Inheritance Tax (IHT) free. When she/he dies, leaving everything to the children, two nil rate bands (and possibly additional residence nil rate bands) will be available.
If you were unmarried and leave everything to your partner, IHT will be payable on your death and then, again, on his/her death. HMRC will, indeed, be ultimately the principal beneficiary of your estate. And remember, while having assets in joint names may remove the need for a Will, assets passing by 'survivorship', if you’re not married, will also be liable to IHT when they pass to your partner on your death.
From a Capital Gains Tax (CGT) perspective, any transfers between married couples are tax neutral. Where a couple is unmarried, any transfers between the partners might themselves be liable to CGT and retrospectively caught for IHT if made within seven years of death.
The other “D” word
If you’re married and you split up then the Courts have a pretty free hand as to the division of the matrimonial assets (whichever name they are in) and, yes, the starting point will be the assumption of a 50:50 division. But that’s the law endeavouring to be fair, not a punishment for having married and now divorcing.
If you and your partner are unmarried, your children together are all grown up and independent, and all the assets are in your partner’s sole name, then there’s no power for the Court to order them to share assets with you if you split up on the basis of need and fairness.
You will need to argue a contribution in money or money's worth has secured an interest in those assets - the law is neutral, but a judge may nevertheless be sympathetic to your position. It may only be a matter of time before an attempt to give formal legal structure to co-habitee rights (on separation and death) finds its way onto the statute books.
Whether married or not you should give thought to what you would want to happen, both regarding care of any minor children and financially if you were to separate and it does make sense to record those in a “Living Together” or “Pre or Post Nuptial Agreement”. This can save a lot of bitterness and cost later if separation does happen.
Here at Alison Fielden Tina Amid can help you by preparing suitable wills and Heather Weevill and Steven Barratt both have many years of experience in all aspects of Family Law. Telephone 01285 6532161 to arrange an appointment.
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