Protecting your partner: why cohabiting couples should make a will
The Ministry of Justice (MoJ) has opened a consultation on proposals that could see unmarried, cohabiting partners given an automatic right to inherit if their partner dies without leaving a will.
At present, only those who are married or in a civil partnership have the automatic right to inherit if their partner dies intestate. For unmarried couples living together, if one dies without a will, current rules mean that their estate passes to their family or, if there is no family, to the Crown.
This leaves partners in a precarious position where they can only claim financial provision under the Inheritance (Provision for Family and Dependants) Act, a legal process that can be both long and costly. Moreover, judges are limited to awarding them only what they deem reasonable for maintenance after considering their needs, income and assets. This is balanced against the needs of other beneficiaries and the overall value of the deceased’s estate.
Still under consultation, the MoJ proposals are not certain to become law. If and when they do, they imply that a surviving partner would still be required to apply to court. Those with children in the relationship may need to prove that they had cohabited with the deceased for two or more years, while those without may need proof that they had lived together for five years.
While potentially quicker and simpler than claiming under the Inheritance Act, applying to the court under the new proposals could still be a costly process.
Why a Will is still the safest option
Making a Will is the most effective way to protect a bereaved partner from additional uncertainty and stress following the loss of their loved one. Making them beneficiaries enables them to inherit the assets you leave to them while also helping them avoid the unnecessary legal costs associated with claims under the Inheritance Act or the new proposals.
Although making a Will makes it easier to inherit, unmarried partners are still treated differently from spouses when it comes to Inheritance Tax. Where a spouse would be exempt from the tax, a surviving cohabiting partner would pay 40% tax on the value of the estate above £325,000.
Additionally, new rules coming into force in April 2027 will affect the tax treatment of pension provisions, potentially preventing some cohabiting survivors from inheriting their partner’s private pension pot tax-free. From that date, unused private pension funds and pension death benefits will be added to the deceased partner’s estate, increasing the likelihood that part of the estate will be subject to 40% Inheritance Tax.
This makes it even more important for unmarried couples to get a thorough assessment of their personal circumstances so they can receive proper advice. Wilkinson Woodward can help with this and advise on the current rules when clients make their Wills with the firm.
If you are an unmarried, cohabiting partner and are considering making a Will or need advice about the handling of your estate and private pension arrangements, the team at Wilkinson Woodward are happy to discuss your options.