If you’re in a same sex relationship and you’re not married or in a civil partnership, you need to make sure your partner is provided for in your will.
Statistically, same sex couples are more likely to live together (cohabit) than marry or entertain into a civil partnership. Unfortunately, cohabiting is not a legal status for any couple, and neither is common law marriage or being a common law spouse of any gender (a myth of epic proportions!).
So, what difference does not being in a same sex marriage or civil partnership actually make? It all depends if you both have made a Will.
- If you have made a Will, you can leave your partner some or all of your estate according to your wishes.
- If you don’t make a Will, then your estate will be divided up according to the Rules of Intestacy. These dictate who is legally entitled to inherit your estate, which usually means your relatives in the following order: spouse or civil partner, your children, your parents and siblings, and so on. There is no provision for a cohabiting partner. This is just as true for unmarried or non-civil partnered opposite-sex couples.
If your family are in any way antagonistic towards our current partner, this can get very ugly very quickly, just at the point where your partner is grieving and having to organise your funeral, etc.
Cohabitation agreements
Cohabitation agreements can be drawn up between you that outline how you will live together, including organising your finances, your assets, your duties and responsibilities in terms of household bills, and more. If you subsequently split up, this agreement can be the reference on issues such as what happens to bank accounts, assets, child arrangements and access o pensions.
However, a cohabitation agreement is NOT a replacement for a Will. It can help with any claim you may need to make if your partner dies without a Will (more on this later).
Who gets the house?
If you are married and own your house jointly, the whole house passes automatically to your spouse without any implications for Inheritance Tax. This is because spouses and civil partners are exempt beneficiaries.
If you are living together and you jointly own your home, even if you pass your share in the house to your partner in your will, they may be liable for Inheritance Tax. This is because their automatic right to your share of the home may be worth more than the current basic threshold of IHT, which is £325,000.
Say your home is worth £900,000. If your cohabiting partner inherits half, that’s £450,000, and £125,000 above the IHT threshold. This £125,000 will be taxed at 40%, incurring a IHT bill of £50,000 at current rates. As a result, your partner might have to sell the house to pay the IHT bill.
What’s more, that’s just the value of the house, not your entire estate, which may add many more thousands to the total that will be taxed. It’s important therefore to seek professional legal and financial advice if you are a cohabiting LGBT couple with no plans to get married.
If you and your partner are joint tenants or tenants in common, different Probate rules apply.
Bequests and gifts
Your Will can specify exactly who gets what from your estate, including non-joint assets such as cash, shares, jewellery, antique, heirlooms and more. Once your assets have been distributed as per your wishes, and you can also allocate to whom the ‘residue legacy” (i.e. what’s left over) goes to.
You can make provision for your digital assets including social media accounts, website, digital music purchases and more, Just remember to leave a record of the passwords as well!
You can also specify who cares for your pets and leave a legacy for their care in your Will.
Unmarried LGBT couples with children
Only those with parental responsibility can appoint a guardian to take care of their children in their Will. Your circumstances may be made more complex if you have children from a previous relationship or marriage that need providing for. If you have a first family or current blended family, it’s always wise to take advice from a family lawyer or a Will writer with experience in this area, to ensure all your children, biological or adopted, are properly provided for in the event of your death.
Trusts are a very effective way to ‘ring fence’ your bequest to your children, as this is kept for them and them alone. Consult your financial advisor for more details, or contact Paul, as he is also a qualified financial advisor.
Making claims under the Inheritance Act
If your partner dies without a Will, you can make a claim under the Inheritance Act. You need to show that “reasonable financial provision” wasn’t made for you, but there is guarantee that this will result in you receiving more from the estate. Again, make sure you and you partner make Wills, and you both specify who gets what, to avoid confusion and the need for a claim.
Confused about wills for the LGBT community?
Contact us to discuss your requirements and concerns. We have extensive experience in writing wills for a broad range of clients to ensure their loved ones are looked after and provided for. We can also advise on estate planning methods including Trusts to secure assets for named individuals and for minor and adult children.