03 March 2010
As more young professionals choose living together over marriage, many don't realise they are putting their partner's security at risk in the event of their untimely death. Here, Sara Rendell, senior associate in the B P Collins' Wills, Trusts and Probate team, explains how the simple solution of making a will can transform the future for the one left behind.
Imagine the scenario – your live-in partner of 10 years has just passed away and, in the midst of grieving, you find out you only have a few days to move from the house you've shared together.
On top of that, you've no right to a claim on their estate and, if you worked in a business together and your partner was the sole shareholder, then you may be out of work as well.
The number of couples choosing to marry in the UK is continuing to decline, with the latest figures for 2007 showing 270,000 weddings, down by 2.7 per cent from the previous year and long-term predictions expect numbers to drop still further.
At the same, the number of couples cohabiting is increasing and trends suggest this will continue, especially for those over 30.
What many couples may not realise is that without a will, if one of them dies their partner could be left both penniless and homeless as intestacy rules pass any assets to either surviving parents or siblings of the deceased.
"The trend for living together, especially for young, wealthy professionals, is one which can have real long-term implications if they don't put measures in place to look after each other," said Jane.
"The reality is that the second you think about co-habiting, you should draft a will to take care of your partner after your death. If you don't, then at the very worst the remaining party could be left with nothing and have to leave their home; at best, if a couple has bought a house together, then the remaining partner could end up co-owning a property with those who would effectively have been their in-laws, which is not a situation many people would want."
The question of property ownership is something which is important to get right, and even more so for co-habiting couples who may, in the Home Counties, have a property worth £1+ million.
The law allows for people to own a property in two ways:
• As Joint Tenants – which means if a non-married couple has purchased a property together the deceased"s share will go to the surviving joint owner
• As Tenants in Common – in which case the deceased"s share goes to whoever the recipient has left the share to in their will or, under intestacy rules passes to their nearest relative – hence the possibility of half a property suddenly being owned by a parent or sibling
In the latter example however, a professionally drafted will can help because it can be structured in such a way to allow a remaining partner time (if they wish to do so) to find their own funding to purchase the remaining half of the property or make alternative plans.
"These examples show just how important it is to go to a solicitor for professional, expert advice," continued Jane. "As a legal firm, we spend a great deal of time and training in the law to ensure our clients get the most up-to-date and comprehensive legal advice available, and we believe that is essential when people are making arrangements for their partner"s financial future."
It's not just personal property which needs taking care of after death. With many of today's successful businesses founded by young professionals who own 100% of their company shares, it's also important to think what might happen to a business in the event of the individual dying.
Here again, professional advice is essential for two reasons:
- It may be possible to claim up to 100% inheritance tax relief in the shape of business property relief on a trading business, thereby making substantial savings
- It may be appropriate to consider appointing a professional trustee who, in the event of the owner"s death, would have a duty of care to appoint someone to run the business and keep it afloat until such time as it could be sold as a going concern
"Making a will means if the worst happens, then your loved ones will be taken care of, and that's especially important for co-habiting couples who are not protected by marriage," concluded Jane. "We would urge anyone in this situation to come and talk to us so we can provide a solution and long-lasting peace of mind."
Note: figures supplied by the Office for National Statistics
If you would like to speak to a member of our private client legal team, please call 01753 279003, complete the online enquiry form or email privateclient@bpcollins.co.uk. |
