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Estate planning for unmarried couples: what you need to know

There is a misconception that unmarried couples who have lived together for a long time – and maybe even had children together – will, for legal purposes, be treated as a married couple. However, this simply isn’t true. And when it comes to estate planning, the ‘default’ legal positions for married and unmarried couples are very different.

In general, unmarried couples who do not have Wills and do nothing about estate planning can expect to pay a higher rate of Inheritance Tax (IHT) and may face intestacy rules that force the disposition of their assets in a way that they might not want or intend.

Why it’s important for unmarried partners to have wills

Consider, for example, an unmarried couple who have lived together for many years and who have several children.

If one of them were to die without a Will, the intestacy rules would apply. Under those rules, the deceased’s entire estate would go to the children in equal proportions. The surviving partner would have no automatic right to any part of the estate and would need to make an application to the court in order to claim some share of the deceased’s estate.

If the couple had no children, then the deceased’s estate would go to other family members of the deceased. Again, the surviving partner would have to apply to the court to make a claim against the estate for financial provision*.

So it’s easy to see why it is particularly important for unmarried partners to have Wills, at least where they are concerned about making financial provision for the surviving partner when one of the partners dies.

The good news is that where both unmarried partners are still alive, they can plan for the disposition of their respective states by making Wills, and by getting appropriate tax advice and putting it into effect.

They can also consider items such as living Wills and lasting powers of attorney, which may assist one partner in caring for a partner who becomes incapacitated.

*The legislation governing such applications applies only in England, Wales and Northern Ireland. In Scotland, there may be remedies for a surviving cohabitee under the Family Law (Scotland) Act 2006.




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