Cohabiting Couples – Your Questions Answered On Protecting Your Assets

This week we're supporting Resolution to help raise awareness about the lack of legal protection for cohabiting couples.

In our second Q&A as part of Cohabitation Awareness Week, Sabrina Richards highlights how unmarried couples can structure and safeguard their assets in life and on death for their partner, and the importance of planning for the future.

If we're not married but own a house together and my partner dies, what happens to their share?

It all depends how you own your property - either as joint tenants or tenants in common.

If you own as joint tenants your share passes to the surviving co-owner automatically without a Will, but it is subject to inheritance tax.

If you own as tenants in common, it will depend on whether you have a valid Will and what it states. If you have a valid Will your share will pass to the person described in your Will.

If you do not have a valid Will your share passes in accordance with intestacy rules. Under these rules, unmarried partners do not automatically inherit your property.

Is there anything I can do if my partner does not leave me their share in their Will or I do not benefit under the intestacy rules?

You can make an application to court under the Inheritance (Provision for Family and Dependants) Act 1975 for an interest in the estate if you meet the requisite criteria, however there is no guarantee of success.

What are my options if I live with my partner and want to give them one of my properties?

Two of the main issues to consider are the risks and tax implications of giving away your asset.

If you make an absolute gift of your assets to another person in life or on death, they pass into their free estate. That means that those assets are then theirs to use, give away during their lifetime and pass in accordance with their Will. Although you may trust your partner implicitly, if there is a relationship breakdown or you suffer financial difficulties such as bankruptcy, this is a decision you may live to regret.

When making gifts, you also need to be mindful of the tax implications. Cohabiting couples do not benefit from the same tax reliefs as married couples such as the spouse exemption, which enables them to pass assets to each other during their life and on death without an inheritance tax.

Inheritance tax is a charge on the value of a person's estate on death and on certain gifts made during their lifetime. When a person dies, the value of their estate above...

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