PCB Solicitors Wills Unmarried Couples to Protect Their Assets
PCB Solicitors is urging couples living together to review their legal situation following the Government’s decision to reject recommendations which would have given cohabiters automatic inheritance rights.
Pauline Davies, Wills and Probate Solicitor at PCB Solicitors explains how this recent move by the Government not to implement the new proposal leaves cohabiting couples potentially faced with a hefty inheritance tax bill:
“The Inheritance and Trustees’ Powers Act 2014 which comes into force on October 1st was expected to include a bill which would have given unmarried couples, with or without children, the legal right to inherit money or property upon their partner’s death. However, with the recent announcement that these proposed changes won’t be included in the revised Act, cohabiting couples need to ensure that they are fully protected should the worst happen.”
With the institution of marriage on the long-term decline since 1972, cohabitating with or without children is the fastest growing family type in the UK. Although cohabitation is widely recognised as completely normal, almost nothing has changed legally and unmarried couples are merely seen as ‘friends’, even if they’ve lived together for 20 years and have children.
Pauline continued: “Cohabiters do currently have a right to make a claim against the estate under the Inheritance (Provision for Family and Dependants) Act 1975, although they would be at a significant disadvantage compared with married couples. Any such action could also create a potentially very awkward and unpleasant situation if the individual finds themselves making a claim against their own children or stepchildren.
“One major problem for cohabitating couples sitting on valuable assets is inheritance tax, and those with a combined asset value of more than £650,000 can face potential issues. This is because unmarried partners can only pass assets up to the nil-rate band, which stands at £325,000 and sums above that figure attract IHT of a huge 40%. Married couples, however, can benefit from each other’s tax free allowance and combined, a couple can leave £650,000 worth of tax free assets.
“Without the ability to rely on legal protection, it’s essential unmarried couples make provisions for the future and draw up a will to protect their partner, and also their children if they have any. The best way to divide assets between loved ones is to seek legal advice and draw up a will that appropriately reflects their wishes, as well as avoids any disputes or resentment between family members, and ensures everything is left as they wish.
“If anybody requires any information or guidance about writing a new will or amending their current one, I would urge them to contact a member of our team to find out more either by calling 01743 248148 or emailing firstname.lastname@example.org,” Pauline concluded.