The Legal Rules are somewhat brutal when it comes to unmarried couples. You might read this as an advert for marriage. However, that alone doesn’t solve all the problems thrown up by lack of planning. How dire is your situation?
STOP PRESS – bereavement benefit for unmarried couples – some will lose out if they don’t claim by 8th February 2024 (new window). In more detail (pdf).
Rules of Intestacy Chart to download at foot of page – this is what happens if there is no valid Will.
Common Law Husband or Wife’s Rights on Death or Inability to Make Decisions
Martin Lewis recently pointed out that there is legally no such thing as a common law wife or husband. It is just two partners living together (cohabiting) without any of the automatic rights available to legally married or civil registered couples. In many cases the only “right” the survivor has is to sue the children who would otherwise inherit (under the Inheritance Act (Provision for Family & Dependants). That is not going to help the family recover from the death and the financial costs are very substantial too. It is not that there are no rights – just that they are no clearly defined, so they would have to be determined by the Courts provided you have been cohabiting for at least 2 years and there was a significant element of financial dependence.
I should make it clear that I deal with some aspects of common law partners in the sense of helping to prevent issues from happening and to define things in advance. But when it comes to break ups and conflict, you need a different sort of adviser, probably a specialist solicitor. And with solicitors on both sides, it gets expensive, so mediation may be a less expensive option.
So the starting place for a Common Law Spouse without sound legal planning is pretty poor, unless we get together and work things out well in advance of any unexpected illness, stroke, or death.
Question: When it comes to health, welfare or financial decisions can my common law partner make them?
The common law partner has no rights and is not considered next of kin – read the article – it is scary but true. Getting married or civil registered helps on the Inheritance side, but makes little difference in the next section about Lasting Powers of Attorney: even married couples are pretty powerless without them.
Answer: whether you are married or not: parents with parental responsibility have rights until a child is 18, then, like everyone over 18, the only person with the right to make any decision about your finances or welfare is YOU. If you have an accident, stroke or lose the legal ability to make decisions – perhaps through Alzheimer’s – NO ONE has the right to make decisions on your behalf unless you have prepared Lasting Powers of Attorney. Even joint accounts and assets are frozen, unless or until you recover.
So what happens? Someone will need to apply to the Court of Protection for any decision which needs to be made, perhaps on a one-off emergency basis, or ideally by applying to be appointed as the person’s Deputy. That is an expensive and onerous job, and one not generally given to a common-law spouse. Often, a solicitor will be appointed to make all the decisions, which is clearly an inexpensive option.
Solution: contact me on 01323 766766 to get Lasting Powers of Attorney in place. Don’t leave it as it currently takes around 5 months to resolve – not much use in an emergency. Costs here.
Question: If my common law partner dies, what will I inherit?
Answer:
- You will probably inherit anything in joint names – but not if it is tenants in common (i.e. formally in shares). Check with the provider or Land Registry – there you are looking for this on the Title Register “No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.” Proper joint bank and savings accounts to which you both contribute should pass on production of the death certificate.
- You will not automatically inherit children where you do not already have parental rights (typically meaning you are on the birth certificate or have formally adopted them).
- You may get death in service or life insurance benefits but usually only if you are specifically nominated as beneficiary. Check with the provider – some will have discretion. If there are children, it may go to them.
- You are unlikely to inherit any income from pensions. Check with the provider.
- If there is no Will, you will inherit nothing under the Rules of Intestacy.
- Inheritance Tax may be payable as you do not have the additional spouse allowances, so if the total value of the deceased’s assets is over £325,000, there is likely to be a 40% tax on the balance over that, which would not be the case for married or civil registered couples.
- If you are tenants, you will NOT automatically inherit the right to live in the property if the lease is not in your name or at least both names.
- If you are homeowners, you will NOT inherit either the home or the right to live in it if the property is not in your name – even if it is in joint names, if ownership is in shares, you may still be forced to sell by the beneficiaries under the Rules of Intestacy. UNLESS the proper legal precautions have been taken – I am happy to check for you.
Solution: contact me on 01323 766766 to get Wills made (Costs here). Trusts may also be of benefit.
That way you can ensure that everyone is looked after in the best possible way, and you can appoint (each other) as guardians of any children you do not have parental responsibility for (though a holder of parental responsibility will have priority). Further guardians too, just in case you both die.
Do remember that getting married or civil registered will cancel any Wills made beforehand unless they specifically state otherwise.
Question: Who does inherit your common-law spouse’s estate?
Answer: open up the link to download the Rules of Intestacy in England and Wales (including Polegate, Hailsham and Eastbourne!) to see what happens. The most likely people to benefit are the deceased persons’ children when they reach the age of 18, which gives the serving partner no security whatsoever.
But often it is the ex-wife or ex-husband when the divorce has not been fully finalised and they will do well out of it. DO ensure that divorce is final by getting the Final Order or Decree Absolute (not my area of Law.)
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Renting a home together can be a great way for couples or friends to share living expenses. When both names are on the tenancy agreement, both parties are equally responsible for the rent and any other tenancy conditions. In the event of a breakup, it’s important to talk to the landlord or lettings agency to ensure that any changes to the agreement are made accordingly.
Buying a property together offers different options. You can either be joint tenants, where you both own the entire property, or tenants in common, where you each own a share in the property. It’s important to understand these terms and their implications on ownership.
If you own the property together, and even if you don’t, having a cohabitation agreement in place can make it easier to navigate the division of assets in case of a breakup. In the case of joint tenancy, if one person passes away, the other automatically inherits the property. However, this cannot be changed by a will. In the case of tenants in common, ownership shares can be split equally or unevenly, depending on the agreement between the parties. If one person dies, their share does not automatically pass on to the other unless stipulated in their will.
If only one person owns the property, the other person typically does not have rights to the property unless they can prove that they have contributed financially towards it. Contributions such as paying the deposit or mortgage payments can be considered. In case of a breakup or death, the non-owner may not have any rights to continue living in the property or inherit it unless specified in a will.
In terms of medical emergencies and death, it’s important to have a written agreement in place to be considered the next of kin and have access to information or make arrangements if necessary. Bank accounts and pension access also have different rules and limitations in case of death. Additionally, tax benefits are not available for cohabiting couples, and it’s important to consider a cohabitation agreement and will to protect each other’s interests and ensure inheritance in case of death.
