Why You Need a Will if You’re Cohabiting

Marriage continues to decline in the UK, with more unmarried couples buying houses together than ever. So, amid rising costs, it’s little wonder that many first-time buyers opt to cohabit before they tie the knot.

But ignoring the legal implications could be financially disastrous.

Despite the trend for living together, the law hasn’t caught up for unmarried couples. Yet, a recent nationwide poll found that almost half of cohabitees in a long-term relationship don’t know they lack rights should their partner die or their relationship end. So, why do you need a Will if you’re cohabiting?

Common Law Myth

A common misconception is that people who live together are ‘common law’ spouses. Especially those who have cohabited for a long time. They believe there’s no need to make a Will because joint assets are left to the surviving partner. Right?

Intestacy

Wrong. Sadly, cohabiting partners can’t inherit in England and Wales without a valid Will. Without a Will, the intestacy rules apply, and the surviving partner may not get a penny.

Assets are distributed strictly: spouses or civil partners, children, and then wider family members. In the worst case, the entire estate, including the house, could be left to a partner’s sibling or child. Imagine fighting your children or partner’s family over the home you’ve lived in happily for years.

Living & Owning a Property Together

Many people are surprised there are several ways to own a property together. The two main types are:

Beneficial Joint Tenants

The most common type of ownership is where the property is jointly owned 50/50. This means if one dies, under the “right of survivorship’, their share passes automatically to the other regardless of what is set out in a Will. This is commonly called “right of survivorship”.

Beneficial Tenants in Common

This method is usually used when one partner owns the property in their sole name or has an unequal financial stake. However, things are rarely straightforward if one partner dies because this type of ownership does not create a ‘right of survivorship’.

The deceased’s share in the property will pass under the deceased partner’s Will or, if they haven’t made a Will, to their next of kin under the intestacy rules.

When an unmarried couple separates, proving an ‘equitable or beneficial interest’ in the property is possible. But putting a case together is rarely straightforward and often challenging to prove. Contributions, such as looking after the children, don’t count. Contributions towards household bills don’t either.

Warning: Charging Orders & CCJs

In cases where a county court judgment is made (CCJ), a creditor may apply for a charging order to be secured against a property. If this happens against one joint owner of a property, the joint tenancy is severed. Ownership then becomes a tenancy in common, and the automatic right of survivorship no longer applies.

Inheritance Tax

Inheritance tax (IHT) rules and exemptions are different for married couples and those in a civil partnership than for those couples who cohabit. There is no equivalent of the spouse allowance for cohabiting partners. Without a Will, depending on the value of the assets and how they are owned, the surviving partner may need to sell assets (including the house) to pay the tax bill.

Our Advice

Undoubtedly, the current legal landscape places cohabitees at a significant disadvantage compared to married couples. For cohabiting couples, especially with children, making a Will is critical. Under the current law, their rights are limited, and when things fall apart or one partner dies, it’s easy to take a wrong turn because the track isn’t that straightforward.

If you need more information or advice about buying a property together, your legal rights as an unmarried couple or making your Wills, contact us today. We’re here to help.

Please note that all views, comments or opinions expressed are for information only and do not constitute and should not be interpreted as being comprehensive or as giving legal advice. No one should seek to rely or act upon, or refrain from acting upon, the views, comments or opinions expressed herein without first obtaining specialist, professional or independent advice. While every effort has been made to ensure accuracy, Curtis Parkinson cannot be held liable for any errors, omissions or inaccuracies.