Unmarried partners living together have little legal protection

We let you know what you can do to protect yourself if your relationship breaks down and how you can put your financial affairs in order so you can provide your loved ones with financial security on your death

There has been a sharp rise in the number of cohabiting couples in the last 15 years.

One in four cohabitees believe they have the same legal rights and protection as married couples. This is untrue as there is no such thing as the ëcommon law spouseí in English law.

If you are unmarried and living with your partner, follow the five steps below to legally and financially protect yourself and your loved ones.

1. Make your Will

Itís crucial that you have a valid Will. Despite changes to the rules of intestacy last October, cohabitees do not automatically have rights to their partnersí estate if they die without a Will. Quite simply, you and your partner cannot inherit from each other without making a Will.

As if that wasnít enough, a Will becomes even more necessary if your wishes are complicated. Do you have stepchildren? Are there Inheritance Tax concerns? Do you have ëcomplicatedí wishes? Then itís important that you receive some expert advice and get your Wills drawn up.

Please contact us on 0208 537 3448 or wills@ashtongrace.co.uk if you would to arrange your Will.

2.††† Make a Cohabitation Agreement

Itís an unfortunate fact that many relationships do not stand the test of time, in spite of intentions to the contrary at the outset.

When married couples divorce or civil partners break up (known as dissolution) both parties have legal rights to maintenance and their share of the assets. Cohabiting couples have no such rights irrespective of how long they have been together and whether they have children.

Unmarried partners can protect their interests by making a Cohabitation Agreement, also known as a Declaration of Trust.

The Agreement can determine how assets are to be divided should the relationship breakdown and can include property, its contents, personal items and savings. Cohabitation Agreements can be particularly useful where property is owned by one partner but the other partner has helped to pay the mortgage. All cohabiting couples should be aware of Cohabitation Agreements, particularly long term cohabiting partners.

To find out more about Cohabitation Agreements please contact us on 0208 537 3448 or wills@ashtongrace.co.uk

3.††† Consider How to Legally own Joint Property

If you and your partner are about to purchase property or you currently own property together, you should consider whether itís best for you to do so as joint tenants or tenants in common.

Under joint tenancy, both partners own the entire property. If one of the partners dies, the survivor will instead own the entire property themselves. Under a tenancy in common, when one of the partners dies their share in the property is inherited instead by the beneficiaries named under their Will or under the rules of intestacy if there is no Will.

The difference in how you own property can have a huge impact on your loved ones. Itís important for you to have considered this in full to ensure your assets pass to your beneficiaries as you would wish.

For more information on joint tenancies or tenancies in common please contact us on † † † 0208 537 3448 or wills@ashtongrace.co.uk

4.††† Do Some Pension Planning

Unmarried couples have to plan their financial affairs more carefully than married couples and this includes organising your pension.

If your employer has a pension scheme, donít assume the scheme will pay out to your partner in the event of your death and vice versa. Instead, ensure you have nominated your partner to receive your pension lump sum. There are Inheritance Tax advantages of nominating your partner or other beneficiaries.

You should also check whether your pension scheme pays a survivors pension to your partner. While most schemes do so for married couples, the same is not true for cohabiting couples. Better to find out sooner rather than too late, and make adjustments accordingly.

Itís important to make these arrangements as unmarried partners are not entitled their deceased partners state pension, neither can they receive their bereavement allowance as married persons do.

To find out more about pension planning and to be put in touch with a financial advisor please contact us on 0208 537 3448 or wills@ashtongrace.co.uk

5. Consider Inheritance Tax

Inheritance Tax can be a major concern for unmarried couples with valuable assets.

While spouses and civil partners can transfer their estates to the survivor free of Inheritance Tax, the same is not true for those couples who are unmarried. An unmarried partner with assets in excess of £325,000 will attract a 40% tax charge on the amount over £325,000 on their death.

The use of Trusts under your Will or during your lifetime can remove or reduce your Inheritance Tax liability as an unmarried person, depending on the size of your estate.

To find out more about Inheritance Tax and/or Trusts please contact us on 0208 537 3448 or wills@ashtongrace.co.uk.

If would like to speak to us about any of the steps mentioned please contact us on†020 8537 3448†or send an email to†wills@ashtongrace.co.uk

Ashton Grace ñ specialists in Wills & Estate Planning