What happens when an unmarried partner dies?

As it becomes more and more common for couples to live together without marrying or entering into a civil partnership, it becomes more and more important to understand what happens when an unmarried partner dies.

The government is also expecting to provide more rights for cohabiting couples.

“But we’re common-law married!”

Common law marriage does not exist.

The current law does not give special status to couples who live together but are not married or in a civil partnership. If you are cohabiting, the law essentially treats this as if you had bought a house with a stranger.

How to protect your money when buying a house together

Where unmarried people buy a house together, they may well each contribute different amounts to the deposit, and may also pay the mortgage unequally. These unequal contributions can be protected in a declaration of trust, which sets out who owns what share of a property. Without anything in writing, the presumption is that the property is owned equally.

If a married couple has a declaration of trust and then divorces, the court may deviate from it as part of the financial orders. That is not the case with unmarried couples – at least currently.

Inheritance tax

Gifts to spouses and civil partners are exempt from inheritance tax, whether they are made during lifetime or on death.

A gift to an unmarried partner does have a similar exemption and will instead use up the deceased’s Nil Rate Band. If the deceased is leaving their share of their house to their unmarried partner, the Residence Nil Rate Band is not available either, as the house is not left to a direct descendant. That means that if the estate is worth more than £325,000, there will be inheritance tax to pay. Depending on the size and composition of the estate, that could mean the house has to be sold to pay the tax, thus depriving the partner of their own home.

By contrast, a married couple leaving everything to each other on first death would pay no inheritance tax, and if they left everything (including the family home) to their children on second death, the threshold would be £1 million.

Why you need a Will

Currently, unmarried partners do not feature in the intestacy rules. This means that they would only inherit assets held as joint tenants, such as joint bank accounts and some properties. Assets held in the deceased’s sole name or as tenants in common would instead pass to their nearest blood relatives. The surviving partner’s only real option is to claim under the Inheritance (Provision for Family and Dependants) Act 1975 for reasonable financial provision. However, they would have to have lived together for at least two years as if they were a married couple, and any claim would be limited to what they need for their maintenance (i.e. day to day living costs).

It is therefore particularly important for unmarried couples to make Wills where they have a declaration of trust for their property, as they have to own it as tenants in common.

In 2021 there were plans in the House of Lords to include unmarried partners in the intestacy rules, provided that they had been living together for three years as a married couple or had a child together. Without government backing, though, these proposals never went anywhere. Now, though, that might be about to change.

Government plans

The new government pledged in its manifesto to strengthen the rights and protections of women in cohabiting relationships. It will therefore be consulting on reforming cohabitation law. It is still very early days so details are sketchy, but could involve an opt-out scheme to protect cohabitees who are financially vulnerable. That said, any scheme that could resemble financial orders on divorce will have to tread a tightrope. Many couples decide not to get married because they do not want to risk losing their own assets on a split-up.

A recent poll by the Will-writing scheme, Will Aid, has revealed that 65% of people think the intestacy rules should include unmarried partners. Around three quarters of unmarried partners were unaware of what would happen on death if they did not have Wills.

Similarly, any change to the intestacy rules could be controversial. Many will believe that unmarried partners by definition have chosen not to leave their estates automatically to each other. If they say they want to ensure that the survivor gets the estate, they should either make Wills or get married.

How we can help

Whatever the government decides to do, there is only one way to guarantee that your assets will go to the people you want, and that is to make a Will.

For further advice and assistance please contact our Wills, Trusts and Probate team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk.