In the past decade, the number of cohabiting couple families saw an increase of 22.9%. Over the same period, the number of families that include a couple in a legally registered partnership in in the UK increased by 3.7% according to the office for national statistics.
This gradual move, with more people choosing to cohabit in place of marriage, it is no surprise there is an assumption that cohabitants may be treated similarly to married couples.
However, there is no such thing as ‘common law marriage’ under the laws of England and Wales.
What does this mean if you cohabit with your partner?
If you cohabit with your partner, there are two things in particular that you should be aware of which differ to married couples.
- Without a will, your estate will be distributed in accordance with the intestacy rules. These list a strict order of individuals who will inherit your estate. Those individuals include married or civil partners and some other close relatives. The intestacy rules do not include cohabiting partners. Therefore, if you want your cohabiting partner to inherit your estate, you must ensure that you have a will
- If you have made a will leaving your estate to a cohabitee, there is no inheritance tax relief available for the assets left to them. However, married or civil partnership couples benefit from a spouse exemption. This means that at any assets passed between married or civil partners will be inheritance-free.
Will this change?
Despite the above, earlier this month, the UK government announced there are no plans to change succession-related law for cohabiting couples in England and Wales.
Proposals were made to change the intestacy rules to provide provision for cohabiting persons in certain cases unless they opt out. However, the government rejected these proposals and said that they have no plans to allow cohabiting partners to have the same inheritance tax treatment as spouse and civil partners.
The Women and Equalities Committee “warned of ‘inferior’ protections for cohabiting couples compared to spouses or civil partners, highlighting that upon relationship breakdown, the financially weaker partner has no automatic rights to the family home. Instead, they rely on complicated property law and outdated legislation regarding child support.”
Nevertheless, the government’s current position is that there will be no reform and it will keep this under review so watch this space.
In the meantime, if you are in a cohabiting partnership, please ensure that you prepare a will to reflect your wishes.