Government Consultation on Unmarried Cohabitation Rights

Protection for Married Couples and Civil Partnerships

Many of us will be familiar with the rights of married couples and civil partnerships is connection with:

• Inheritance tax (IHT) and estate planning – gifts between legal spouses are IHT free as well as unused IHT nil rate band and residential nil rate band allowances being passed to the survivoing spouse.
• Intestacy i.e., dying without a legally vaid Will and the legal spouse also having a right to assets (all if there are no children, and the majority if you have children with some assets held in trust for children).
• Capital gains tax free transfer of assets between legal spouses.
• The rights to spouse pension income on death and death in service life insurance at work.  Not forgetting other benefits at work that may be available such as ‘family’ private medical insurance.
• Topped up state pension rights if your spouse dies.
• State Bereavement payments such as Widowed Parent’s Allowance, Bereavement Allowance (previously Widow’s Pension) and a one off Bereavement Payment.
• Divorce and seperation rights and the separation of assets and income via financial agreements and a consent order including pension income and pension funds with pension sharing orders.

Unmarried, cohabiting couples have no such rights and are currently ignored withing the law on death.

• Cohabiting couples have no such rights yet you may have built up a life, property, savings, investments, pensions and a home.  If these assets are not in joint names but are in the sole of your deceased partner or your estranged partner on separation or divorce, then you have no rights and may be left financially destitute and homeless.

New Consultation by Government to Review Cohabitation.

In 2021, there were 3.6 million cohabting couples, up from 1.55 million in 1996.  Today, whilst the Office for National Statistics (ONS) has not released the latest stats, it could well be over 4 million today.  That’s an increase of 158% in 30 years.  Marriage and civil partnership appears to be falling out of favour compared to cohabitation for couples today.

Comment

We have long been aware of the risks when advising cohabiting couples and you would be amazed when we have pointed out the risks of cohabitataion with no rights, that probably at least once a year, a cohabiting couple that we have advised has subsequently married or entered into a civil partnership.

That said, there is an argument that if you are committed to each other, why have you not married or signed a civil partnership agreement?  We would argue that for reasons such as a former spouse refusing divorce for a period, may prevent a person marrying their new partner or even religion may prevent divorce, separation or remarriage.

We welcome the consultation and hope that it benefits those that are ‘trapped’ by circumstance but not those who have voluntarily chosen not to marry or enter into a civil partnership.