The Statutory Legacy is the portion of the estate that a surviving spouse or civil partner receives on the first death. The amount has been £250,000 since October 2014, but the Government promised to review this figure at least every five years and they have now made good on their promise.
From February 2020, a surviving spouse or civil partner with children will receive the first £270,000 of the estate, plus 50% of the balance. The children inherit the rest between them.
It sounds like good news for those who neglect to make a Will – but what of unmarried couples? Sadly, they don’t benefit at all.
Cohabitation is the fastest growing family type, representing 13.1% of the population (about 6.5 million). Many cohabitees neglect to make a Will, leaving loved ones high and dry, due to the widespread myth of the ‘common law spouse’ and ‘common law marriage’.
The common law marriage myth
The term “common-law marriage” is often banded around socially, referring to cohabiting parties who live together as if they were indeed married. According to Rebecca Probert in ‘The Changing Legal Regulation of Cohabitation’, the myth that marrying made little difference to one’s legal rights emerged by the end of the 1970s and has prevailed ever since.
“Many cohabitees are under the false impression they are common law spouses, with the same guaranteed protections and financial and legal rights as married couples.”
~ Sheela Mackintosh-Stewart, ifamiliesUK in Forbes
Despite the fact that there is no such thing as common law marriage, figures from the National Centre for Social Research reveal almost half mistakenly believe there is. The view is most widely held by those with children.
If an unmarried person dies leaving children, the children will inherit their estate. If there are no children, the next in line are the parents; followed by brothers and sisters. Many unmarried couples will own their home as tenants in common, meaning that each has a defined share of the home (e.g. 50%). It is clearly undesirable that on the death of their partner, their children or their partner’s family should co-own the property: with such arrangements leading to a great deal of stress and disharmony.
It is of course open for unmarried couples to apply to the Courts for an order under the Inheritance Act. However, such applications are costly and take time; and the outcome is by no means certain. Further, any award made will be for ‘maintenance’ (in contrast with applications made by Spouses which are decided on similar principles to a divorce).
The solution is for unmarried couples to make a Will, providing for both their partner and their children on their death. This important legal document can also set out guardianship for their children; and it can even cover who should take care of their pets.
It is also wise to make a Lasting Power of Attorney since if one of a couple loses capacity, banks and building societies may freeze assets without a Deputyship Order. Such orders are expensive and time consuming to obtain, and can be contested by family members.
Finally many couples choose to make a Cohabitation Agreement, setting out how their financial and practical affairs are organised and what should happen if they break up.