Estimates of the percentage of people in the UK who have not made a Will are all disturbingly high, often topping 60%. Failure to take this simple precaution can leave people extremely vulnerable, particularly in the case of couples who choose not to marry or form a civil partnership. This article explores some of the relevant issues.
Common law spouse
Surprisingly, a large number of people still believe in the myth of the “common law spouse”. People are often incredulous when they realise that after many years of cohabitation, they still have no more legal rights than they had when they first met. With society changing rapidly and more and more people choosing not to marry, or to postpone marriage for many years, this is something which needs to be more widely understood. For long-term cohabitees, particularly those with children, it is vitally important to make a Will.
Where the couple’s assets exceed £325,000 inheritance tax advice is also useful, since assets passing between unmarried couples do not benefit from “spouse exemption”, as do those passing between married people or couples in civil partnerships, potentially leading to double taxation. Recent statistics from HM Revenue & Customs indicated an average charge of almost £200,000 on taxable estates, so getting advice early could help couples save a significant sum of money.
For those who die without a valid Will in place, the devolution of their estate is governed by the statutory laws of intestacy. Historically, these have been heavily weighted in favour of the deceased’s children rather than even a legally married or civilly partnered “spouse”. Within the last few years the balance has tipped somewhat in favour of the deceased’s spouse, but the provision is still very different from what the majority of married couples would wish and expect, with in many cases a significant proportion of the estate passing straight to the children, potentially leaving the spouse unable to sustain his or her previous standard of living.
For unmarried couples, the situation is even worse. Where no valid Will exists, the bereaved cohabitee has no automatic entitlement to any provision from their late partner’s estate, and can see the entire estate pass to the children, or even to another relative of the deceased. They are then left in the position of having to make an application to Court for reasonable provision from the estate – a lengthy, expensive and extremely stressful procedure at what may be their most vulnerable time. Additionally, cohabitees applying to Court cannot expect the same level of provision that a legal spouse or civil partner would be entitled to receive, with awards being limited to what is deemed necessary for their maintenance. For a spouse, the award is such provision as would be reasonable in all the circumstances, usually a considerably higher amount.
A trap to avoid
Although marriage or civil partnership usually gives significantly more legal rights and security to a couple than cohabitation, there is one pitfall which it is important to avoid. It is often not appreciated that marrying or forming a civil partnership will automatically revoke an existing Will, leaving the couple intestate.
Sometimes this is what the couple would have wanted, but at other times it can cause devastating consequences. An example is a second marriage, where the couple have agreed that their respective estates will pass down to their children from earlier relationships. Marriage will revoke the pre-existing Wills, and it is vital that the couple put new Wills in place either immediately after the marriage, or before marriage but expressed to be made “in contemplation” of the marriage, to reinstate the agreed position.
An even more unfortunate result of the automatic revocation of Wills on marriage can occur. In one case, two long-term cohabitees, who had lived together for over 20 years, had made Wills leaving their respective estates to each other. After a diagnosis of a terminal illness giving the male partner only a few months to live, the couple decided to marry. They were unaware that this would revoke their Wills, and accordingly they did not think to make new Wills before the husband’s death, shortly after the marriage. It was only on approaching a solicitor afterwards that the wife discovered that she had effectively been disinherited, and would only be entitled to the provision for a spouse on intestacy, rather than the whole of her husband’s estate, as had been planned and expected by both parties.
However you decide to structure your affairs, proper consideration and advice is vital in order to protect your loved ones. For more advice on the issues raised or any other matters relevant to Wills and Estate Planning, please contact Alexandra Hornsby on 0116 2473555 or contact a member of the Estates team.
If you have been cohabiting and have separated or are thinking of separating, then it is important to obtain legal advice in order to establish the options available to you so that you can understand if there are any claims that you could bring and the procedure, timescales and costs of doing so. Please contact a member of our family team for more information.
The information on this site about legal matters is provided as a general guide only. Although we try to ensure that all of the information on this site is accurate and up to date, this cannot be guaranteed. The information on this site should not be relied upon or construed as constituting legal advice and Howes Percival LLP disclaims liability in relation to its use. You should seek appropriate legal advice before taking or refraining from taking any action.