Living together could be bad for your wealth.
A study by the Office of National Statistics in 2017 confirmed that the number of families in the UK continues to grow, with cohabiting couple families growing the fastest. There were 12.9 million married or civil partner couple families in the UK in 2017. The second largest family type was the cohabiting couple family; 3.3 million families.
There is no data available on the ages of those who cohabit, but common sense would dictate that there will be a statistically significant number of couples over the age of 50.
Because of their circumstances there are particular issues that may arise for older couples who are cohabiting. As a solicitor specialising in will disputes my top 3 tips for couples in this situation are:-
- Be aware of the common law marriage
Be aware of the common law marriage myth. Cohabitees in England and Wales do not have the full range of legal rights that are enjoyed by married couples. If one of you dies without having made a will, or with an out of date will then the survivor may receive little or nothing from the deceased’s estate. You may have no say about the funeral arrangements. You may be lawfully evicted from your home if it is in the deceased’s name. If you had been living with the deceased for at least 2 years before death then you are entitled to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975. But claims must be brought quickly and litigation can be expensive and uncertain.
- Check that a mirror will is right for you
If you are making a will – be careful! Whether married or not, couples will often make what are called “mirror wills”. They usually provide for A to leave everything B and B to leave everything to A. The couple will often decide that whichever of them is the survivor, they will leave their estate on their death to agreed family members. So far so good, but if you have children from previous relationships and want to be sure that they are provided for either on their death or on the death their partner, a mirror will may not be the answer. A mirror will does not bind the survivor. So – let’s say Ann and Bernard cohabit and both have a child from a previous relationship. Ann dies and leaves her estate to Bernard. Bernard might assure Ann that he will leave her daughter – his stepdaughter – half of his estate when he dies, with the other half going to his son. But there is nothing to prevent Bernard from making a new will after Ann has died. Or perhaps he could marry someone else; marriage revokes a will. Cohabiting couples should think seriously before making mirror wills and should get proper legal advice on the other alternatives available to ensure that their wishes are respected. A life interest trust is one option or mutual wills (which are binding).
- Be careful about lifetime gifts
Sometimes couples will make gifts or loans between themselves. As between married couples there is a presumption of advancement, which means that in law, cash and property transfers between them are assumed to be outright gifts. If a couple is unmarried the opposite presumption arises – which is that the funds are a repayable loan. This principle led to the financial downfall of a retired architect Leonard Taylor in a Court of Appeal case in 2011. Mr Taylor lived with Doris Luker who gave him a cheque for £61,000 a week before she died. He was a beneficiary under her will alongside two charities, the British Heart Foundation and the Cancer Research Campaign. They brought a claim against him after her death to argue that the £61,000 was a loan and must be repaid by Mr Taylor to the estate (and then divided between them). Their argument was successful. Don’t assume that gifts of money or property between you and your partner will be safe from a legal challenge.
It is a sad fact that in many of the cases I deal with, my client tells me that the deceased would have been devastated to know what had happened after their death. Prevention is always better than cure.