Inheritance disputes – Coronavirus update for cohabitees
The current pandemic has resulted in a surge of people seeking advice about making a will. As a will disputes solicitor, I see on a daily basis the stress, expense and worry that families endure when there’s a dispute over inheritance. Cohabiting couples can face particular issues that need careful thought.
Data from the Office for National Statistics (ONS) released in August 2019 shows that the number of cohabiting couple families is growing faster than married couple families, up 25.8% over the decade.
As more and more couples decide to live together rather than to marry or enter into a civil partnership, it’s important firstly to dispel 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 If one of you dies without having made a will, or with an out of date will, then the survivor may receive little or nothing from their loved one’s estate. Plus:
- You may have no say about the funeral arrangements and
- You may be lawfully evicted from your home if it is in the deceased’s name.
If you have been living with the deceased for at least 2 years before his or her death, then you are entitled to bring a claim against the estate for ‘reasonable financial provision’ under the Inheritance (Provision for Family and Dependants) Act 1975. But claims must be brought quickly, and litigation can be expensive and stressful.
Secondly, couples will often make what are called “mirror wills”. They usually provide for A to leave everything to 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 be divided between both families. But, if you have children from previous relationships and want to be sure that they are provided for either on your death or on the death of your 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 Bob. Bob might promise Ann that he will leave her daughter half of his estate when he dies, with the other half going to his son. But there is absolutely nothing to prevent Bob from making a new will after Ann has died. Or he could marry someone else (marriage automatically revokes a will). Or his son might persuade him, in later life, that he ought to change his will and leave everything to him.
There are other options, so cohabitees should always get legal advice if their circumstances are not completely straightforward.
And finally…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. Gifts can be a good way of tax planning but it’s important to get advice and to record intentions in writing.