Financial issues for cohabitees to consider

News - 02/07/2015

Family law solicitors see the majority of clients when a relationship has broken down but it is often beneficial for couples to get legal advice if they are considering co-habiting – and whilst the priority for clients is usually setting out arrangements for the property, there are several other issues that should be considered by cohabitees.

Inheritance
A surviving cohabitee will have no automatic right to inherit from a partner’s estate unless this is specifically provided for in the will of the deceased.

In some cases, the cohabitee may be able to argue that they are entitled to a settlement by virtue of being the dependent of the deceased but they will probably not be treated as favourably as a spouse.

Anecdotally, solicitors have noticed an increase in litigation between the surviving cohabitee and the legal next of kin of the deceased, who may well have inherited under intestacy rules if no will was prepared. Where no clear legal arrangement have been made then any joint assets are at risk and in the worst case scenario this could lead to the surviving partner being forced to sell their home.

It is therefore of crucial importance that in cohabiting couples make a will and ensure that appropriate arrangements are in place.

Tax
Cohabitees are treated as unconnected individuals for tax purposes and so do not benefit from many of the reliefs and exemptions open to spouses.

Couples are strongly advised to obtain advice on the most tax efficient options open to them.

For expert help call Morrisons Solicitors on 01737 854 500 or email [email protected]

Disclaimer:

Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.

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