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Cohabiting partners: why not making a will is still risky

couple with daughterAmy Lloyd explains why cohabitees need to make a will if they’re to have a say in who inherits their estate.

The Office for National Statistics Families and Households: 2017 report reveals that there are 3.3 million cohabiting families in the UK. This figure has more than doubled since 1996 for what is the fastest growing family type, which consists of cohabiting partners who are with or without dependent children.

At present, cohabiting partners have very little rights. Without a will, the estate passes in accordance with the rules of intestacy. These rules provide for the next of kin to inherit the estate, but cohabiting partners do not appear anywhere within the next of kin definition.

Parliament has at last begun to consider the Cohabitation Rights Bill, which is summarised as, ‘A Bill to provide certain protections for persons who live together as a couple or have lived together as a couple as cohabitants; to make provision about the property of deceased persons who are survived by a cohabitant; and for connected purposes.’

This bill is only in its early stages, and despite being first read in the House of Lords on July 2017, there is yet to be a second reading scheduled.

Property law

Assuming that cohabitees jointly own their property, the picture becomes more complex.

Property law provides that there are two different ways to jointly own property. The first is named beneficial joint tenants, and means that the cohabitees jointly own 100 per cent of the property. If one cohabitee dies, the surviving cohabitee then solely owns the property and has inherited it. It’s important to note that a will would not alter this position.

If this method is relied on as a way to leave a property to a cohabitee, it should also be considered that the cohabitee would only inherit the property and not the furniture, cash, car or anything else in the estate. Furthermore, if there is a life insurance policy to cover the outstanding mortgage, the policy may provide for the estate to inherit the policy proceeds. The surviving cohabitee could find that they inherit the property subject to mortgage, while the estate inherits the insurance policy intended to redeem the mortgage.

The second method of property joint ownership is named tenants in common. This is where the cohabitees own a particular share of the property, such as 50/50 or 60/40. With cohabitees often contributing unequal deposit amounts, this type of ownership is becoming increasingly popular, as cohabitees look to secure their investment.

However, if held as tenants in common, each share of the property would pass into the cohabitee’s respective estates, rather than to the surviving cohabitee. In this circumstance, the surviving cohabitee would not inherit their partner’s share of the property without a will.

Rights of a cohabitee

A cohabitee may, in fact, wish their next of kin to inherit their property, and not their partner.  

A cohabitee is likely to be entitled to make a claim against the estate, though, particularly if they are made homeless as a consequence. There are methods to make it more difficult for a cohabitee to make a claim against the property. However, simply making a standard will may not be enough, and more robust legal advice may be required to guard the estate against potential claims.

Balancing the rights of the next of kin

More complex wills may include a right for a cohabitee to remain living in the property. As rights in the property are left to the cohabitee, as opposed to leaving the property itself to the cohabitee, this can ensure that the property would eventually pass to the next of kin.

These types of will are particularly popular with people who want to protect children from a previous relationship, who they wish to eventually inherit, but without compromising the rights of their cohabitee to continue living in the property during their lifetime.

Other assets

Similar rules can be applied to other assets. If a bank account is jointly owned, it can pass outright to the surviving partner. If the bank account is in the sole name of the deceased, it passes to their estate. Without a will, cohabiting partners would not benefit from the estate.

So while parliament debates a change in the law in light of changing family structures, making a will is still a necessity for cohabiting partners.

About the author

Amy Lloyd is an associate solicitor with Wright Hassall. Amy specialises in estate and succession planning, including drafting wills, inheritance tax planning and trusts.

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