Young couple sat on beanbags. Both are reading books.

Co-habiting and Wills: Are partners entitled to inheritance?

It's easy to make assumptions about where your stuff goes when you die. This article helps set the record straight.

Are partners entitled to inheritance? Well, it depends. You know when you have to fill in a form online and it asks you for your relationship status? The options are normally, like, single, married, widowed, or prefer not to say. Which is alright, if you’re single, married, widowed, or Johnny Tightlips. I’ve got a girlfriend, though, and it puts me in a bit of an awkward predicament.

I’m not single, but we’re not married. I’m certainly not widowed. And I don’t like putting prefer not to say, ‘cos I’m an honest man with nothing to hide. What do I pick then? A terrible internal conflict ensues. My head swims. Hands shake. Something something mom’s spaghetti.

In the end (no one tell my girlfriend) I choose single. ‘Cos, by the letter of the law, as I’m not married, I am single. When you’re thinking whether your partner would inherit your stuff, you need to keep this in mind.

Are partners entitled to inheritance, though?

It all comes down to whether you’re married or not. It’s easy to assume that just ‘cos you live together, your partner automatically gets your stuff when you die. But you know what they say about assuming. It makes an ass out of u and me.

If you die without a Will, the rules of intestacy take over. Unfortunately, they’re awful. They’re proper strict, and they don’t give a hoot about any bonds or relationships you’ve got if they’re not legal. Legal as in recognised in the eyes of the law, that is. Not accusing you of anything dodgy.

To show you who’d inherit your stuff if you died without a Will (intestate), we’ve made this handy little flowchart showing the rules of intestacy. See if you can find what an unmarried partner would get.

A flowchart for the rules of intestacy, answering the question are partners entitled to inheritance. If you're married, yes. If not, no.

That’s right, nothing. Your estate goes to the Crown before it goes to an unmarried partner. The Royal family. Now, I’ve no particular beef with the Royal family – I quite like the grandeur, tradition and history they bring. I’m not out here with a living room full of commemorative china plates, Corgi statues and Union Jack bunting, like, but you know. They’re alright.

That being said, I most certainly would not want them getting my inheritance over my girlfriend. The last thing they need is more money. They already own, like, 10 massive castles and have hundreds of butlers. I’m only kidding here, but you get the point. I’m sure you’d rather your money went to your partner too, right?

Cos common law partners, or life partners, aren’t recognised by the rules of intestacy. They’ll never inherit. So, imagine you and your partner live together. If you die intestate, unless you own the house jointly, there’s a chance they’d lose the house. Could end up on the streets. They’d have lost the love of their life, and their home, in one fell swoop.

It’s grim to think about, but I won’t apologise for putting that image in your head. It’s better for you to know it might happen so you can stop it. Make a Will. Then it’s something you’ve avoided rather than an actual possibility.

What if we’re married with a house?

If you own the house jointly, the survivor inherits it. There’s a thing called right of survivorship that overrules pretty much everything else, so don’t worry.

If your spouse has sole ownership of your house and they die intestate, you won’t necessarily inherit it. The house might have to be sold, so it forms part of the deceased’s estate. The rules of intestacy apply here – so, if their estate (including the value of the house) was below £270,000, you’d inherit the lot. If it was over £270,000, you’d inherit £270,000, plus 50% of anything over that. The other 50% would be shared amongst your kids, if you have any.

You should still get a Will, though – that way you can decide exactly where your money goes. You probably don’t want to give your partner absolutely everything. You could leave stuff to your kids, to your friends, to your family. Even charities – I’ll be leaving something to the WWF, for example. More steel chairs.

Wills don’t only offer you a choice, they can offer protection. If you’re married with kids and a house, a Will can help make sure your kids are guaranteed to benefit from it. How? You incorporate a Property Protection Trust.

What’s a Property Protection Trust?

I won’t go into minute detail now, ‘cos I’ve written a blog post on this specific topic which you can read here. But basically, when two people own shares of the same property, they can set up a Trust that means when one of them dies, their share is locked away for the benefit of a third person.

There’s a few reasons this is useful – the main one being it guards against sideways inheritance.

So, let’s imagine a couple called Rosie and Jim. They’re married, share a house and they’ve got a kid called Duck. They want to make sure Duck’s looked after in the future, so they set up a Property Protection Trust. Now, they both own 50% of the house, and it’s stipulated that if one dies, the other carries on living in the house, but the deceased’s 50% share is locked away for Duck.

Couple of years later, Jim sadly drowns. Fell out of a barge. A few years pass, and Rosie remarries – a guy called Sooty. He’s a nice guy, but a little mischievous. This puts Duck’s inheritance at risk, though – spouses get preference over children. If Rosie dies without a valid Will, Sooty could end up inheriting everything, leaving Duck nothing.

But, thanks to the Property Protection Trust, that’s not going to happen. At the very least, Duck will inherit Jim’s 50% share of the house he and Rosie owned together. It’s still a bit of a bummer if he does end up losing a massive chunk of his inheritance, but at least he knows that 50% is safe. Better than nothing.

A nice side effect of Property Protection Trusts is they can help when it comes to care home fees. Now, you can’t set one up just ‘cos of this. Don’t be naughty. But, if you do have a Property Protection Trust in place, the 50% of property locked in the Trust isn’t counted when the authorities work out how much you need to pay in care fees. It’s handy to know.

No matter what your circumstances are, if you don’t have a Will, things can get really, really complicated. Why let an antiquated set of rules decide what happens? Why risk your partner being made homeless, or your kids losing their inheritance, if you don’t have to? What’s the point when you could just make a Will?

Recap

A Will makes everything so much simpler. Married, unmarried, live with your partner, live alone. It doesn’t matter. If you want a say in who gets your stuff when you die, you need a Will, and the sooner you get one sorted, the better. To see how we can help, ring us on +44 (0)330 229 0331 or pop over to our website. Or, if you’d prefer, why not use our call back service? Just pick a convenient time and we’ll give you a ring.

Share this post
Default image
Declan Ramsden

Declan is an Apprentice Content Creator at Vital Documents, which means he’s learning the ins and outs of blog writing! He studied English Literature for 4 years before joining the company. Outside of work, he enjoys listening to retro music and reading classic novels – particularly Charles Dickens!

Articles: 8

Leave a Reply