Having recently and very publicly declared that the only reason he will ever marry his long-term partner of over 40 years (novelist Jane Fallon) is to avoid paying inheritance tax, Ricky Gervais has highlighted one of the financial advantages of being married in the form of the spousal tax exemption on death.
Whilst this is possibly not one of the most romantic proposals ever, the commercial logic of it cannot be argued with and it should serve as a stark warning to those couples still operating under the illusion of a common law marriage which does not exist in the UK.
Many couples still seem to believe that if they have been living together as man and wife for a significant period of time they become the legal equivalent of married couples. However, this is not true, regardless of the length of their relationship or whether they have children together.
Unmarried couples do have some legal rights such as property rights and parental responsibilities but rights relating to financial support are much more limited and if an unmarried partner dies without a Will in place, the surviving partner can find themselves homeless and, in circumstances where they were financially dependent upon their deceased partner, penniless .
What claims can a surviving spouse advance?
Currently a surviving partner can advance a claim under the Inheritance (Provision for Family and Dependants) Act 1975 but only if they were living with the deceased partner for the full two year period prior to death. The claim would be made on the basis that reasonable financial provision had not been made for them under any Will (or under the intestacy rules if no Will was executed) and would be limited to what is required for their maintenance (which is a lower standard than that applied to spousal claimants).
Alternatively or in addition, they may be able to claim if they were financially dependant upon the deceased partner. Such a claim can be protracted, costly and stressful at a time when the claimant is already grieving for the loss of their loved one and contemplating an uncertain future.
Is the law changing?
It is understood that the number of cohabiting couples has increased from around 1.5million in 1996 to approximately 3.6million in 2021, making the position on cohabitation one of the most actively debated areas of family law.
As a result of this, the Law Commission has been considering reforms and recently proposed a new statutory scheme for cohabiting couples which proposed a number of financial remedies when relationships end.
The proposal for reform which would apply when a cohabiting partner dies would be to allow the surviving partner to inherit when there is no Will in place. Typically, discussions have focused on qualifying couples (i.e. those who have lived together for a minimum period and had children together). Discussions have also focused on making protection more accessible for unmarried partners but to date no such changes have been enacted.
For cohabiting couples today, the most important protections are still:
- Making valid wills;
- Reviewing pension death-benefit nominations;
- Holding property appropriately; and
- Taking legal advice, particularly where one partner is financially dependent on the other.