Couples who prefer not to get married when they set up home could suffer financial difficulties if they don’t have an up-to-date will, according to a leading law firm.
The warning from Irwin Mitchell Private Wealth comes in the wake of the Office of National Statistics’ Families and Households survey for 2017, which found that there are 3.3 million cohabiting families, with the number more than doubling since 1996.
Meanwhile, research published by Resolution, the family justice body, found that two-thirds of cohabiting couples are unaware that ‘common law marriage’ is a myth and has no legal grounding in the UK.
Paula Myers, national head of will, trust and estate disputes at Irwin Mitchell Private Wealth, says: “It’s very concerning that there is such little understanding around cohabitation, which in the long run can spell disaster for couples when it comes to will disputes.
“Will disputes and inheritance disputes can take years to resolve and can involve several parties, depending on who has a claim to the estate. The increase in divorce means more complex family structures are common and this can lead to many people feeling extremely disappointed when it comes to the administration of their family members’ estates.”
Cohabitation agreement needed
She adds: “Without any sort of agreement in place or an updated will, couples could spend their entire adult lives together and literally be left out in the cold once their partner dies because they have a limited claim to the estate.
“Cohabitees can also struggle to persuade trustees in claims for life assurance payouts and pension entitlements, which can very often be paid out automatically to spouses. Some parties can struggle to access bank accounts or even have a say on how a funeral is arranged.”
With house prices escalating, the value of many estates has risen, leading to more inheritance disputes too.
Ms Myers explains: “Common issues include people having to sue their own under-16 children to get access to funds to pay the mortgage of the home they shared with their long-term unmarried partner. Second and third marriages can also cause issues if wills are not updated to ensure their children from previous marriages receive an inheritance.
“The best way cohabiting couples can protect themselves from lengthy disputes in the future is by arranging for a cohabitation agreement, which can define who owns any property and how bills are to be split. They also need to make sure their will is regularly updated to include their current partners and reflecting their current wishes.”