You can’t fully prepare yourself for the aftermath of losing a loved one, especially a romantically related partner. Tying up the loose ends during bereavement can be painful, especially if matters get complicated. For married couples or those in civil partnerships, the issue of inheritance tends to be fairly straightforward, even if the person has left behind no Will. But what is the law surrounding inheritance for unmarried couples where there is no Will?
Intestacy
Under the rules of intestacy, if a person dies without a will, that person’s legal spouse (if living) will automatically inherit the first £250,000 of the estate. If there are no children involved, the spouse will inherit 100% of the estate. But what about a couple whose relationship has not been made official in the eyes of the law but have been cohabiting for quite some time? Surely the same rules still apply?
While this is a frequently asked question, it is in fact a common misconception, and the term ‘common law partners’, which is often heard, does not in fact stand in the eyes of the law. Without a Will or a legal status on your relationship, you will not automatically inherit anything from the estate of your partner aside from any jointly owned assets. The rules of intestacy state that if you and your “non-legal” partner do not have children, the assets of the estate will automatically pass to any living relatives.
But what about these jointly owned assets? What if the entire property itself is jointly owned?
This poses a new question altogether, and the answers have substantially different outcomes.
Property
When a couple buys a home together, they have two options of how they would like to purchase the property. If they choose to purchase the property as beneficial joint tenants, then both partners have equal rights to the home. This means that when one partner dies, the other will automatically inherit the property. As joint tenants, both partners co-own the property, and cannot pass the ownership of the property in either of their wills.
However, if the couple decides to purchase as tenants in common, the law is different. Buying as tenants in common allows couples to own property in shares – for example, the couple might decide to have a 50% share each, or a 30/70 split, depending on their own preferences and personal finances. While the popularity of purchasing as tenants in common has grown for tax reasons, it is important to note that tenants in common will not automatically receive their partner’s share of the property if they pass away.
If you and your partner have purchased property one way and are considering switching, this is possible too. Couples about to marry may change to joint tenancy to gain equal rights. On the other hand, divorcing couples have been known to shift from being joint tenants to tenants in common to make for a clearer division between their assets.
Other considerations
When a person dies leaving behind no Will, many questions will be raised surrounding the estate and the inheritance. Another important point to take into consideration is the bank account of the deceased. Perhaps they had considerable savings in their account prior to their death. In this case, the partner would only be entitled to the money in the account if they had a joint bank account, opened under both names. The bank may need to see a death certificate as proof before they transfer the money to the joint owner. If the account is not jointly owned, the living partner will only be able to withdraw the money if they are an executor of the Will, which in this case is not possible. Unfortunately, without the Will or the status of a legal relationship, the rules of intestacy will apply – however, as there is no legal spouse, the money will be divided up to the closest living relatives of the deceased instead.
What can I do?
If you have reached the end of this blog and are worried that the only way of ensuring you inherit is through marriage or civil partnership, please think again. At Preston Redman, our trusted wills and probate solicitors strongly advise any couple, young or old, to draft a will as soon as possible, especially where considerable assets are involved. The rules of intestacy only apply when a legal will has not been left, and therefore can be easily avoided by taking the time to state who exactly should inherit your estate when you pass away.
For advice and assistance on how to get going with the will writing process, or if you have further questions on the above, please call Joe Edwards on 01202 292 424 or send him an email to jwe@prestonredman.co.uk.