Not married to partner - legal implications?

[Saiditagain]

My partner and I have been together for 15 years and have two young children. I know that marriage backed up by a will is the best way to protect yourself in the event of the death of your partner.

The death of a family member has (again) left me realising that I am in a very precarious position. If we don't get married how do I go about protecting myself legally? Without marriage/wills I believe that our children inherit as my partner's next of kin.

1/ My partner has two houses. The first he owns outright the second is mortgaged. My name isn't on either of these properties. If I get my name put on both of the properties and my partner dies does this mean that I automatically become sole owner of the houses or would they have to be sold and inheritance tax paid?

2/ Should we consider some sort of power of attorney over each other in case one of us becomes ill. As I'm not legally next of kin I understand this has implications for being allowed into a hospital to see my partner and making any decisions about his medical treatment.

I am sure there are other things I should also be thinking about.

Thanks in advance.

[Kendodd]

Do you have the option of getting married?

[Saiditagain]

I'd like to head down to the registry office with a couple of witnesses and get it done. Not very romantic - sorry! However, there are family pressures on my partner's side and this is something he's never wanted to do. As a result it's become easier to coast and not do anything about it.

[titchy]

Don't know about 2/ but if your name was put on the deeds as joint tenants (rather than tenants in common) then his share of the houses would automatically pass to you and would not form part of his estate, therefore no IHT liability.

[Kendodd]

Could you get married in secret, not telling DHs family? It seems to me the easiest, quickest and cheapest way to cover all bases. Also you haven't said if you have wills or not.

[PeterParkerSays]

My cousin's partner was knocked down and killed by a car. They had 2 young children and weren't married.

My cousin had to get paperwork at the bank etc. signed off by his mum, his next of kin, as she couldn't sign the forms. I don't think that power of attorney will have any impact on this.

You can both get wills, even if you're not married, so he would pass the houses on to you, although you might be liable to pay inheritance tax on them.

[scaevola]

You also need to check your pensions - some will not pay a widow's pension if you are not married/CP (often older company ones, that you might want to hang on to as they are more secure/generous).

You are also forgoing IHT exemptions on your estate and the right to state bereavement benefits.

NOK is fairly nebulous in UK (and much of Europe) and unlikely to be a problem, unless DP has an awkward family. But if you travel beyond those places and are unlucky enough to have an accident there, it can complicate things at a distressing time.

[Xenia]

Perhaps he does not want to marry because he has higher assets than you. If you owned 4 properties and he one he might be racing to get you down the alter.

His executors and heirs would only pay inheritance tax if the assets are worth over the ceiling - from memory about £300k. If they are over that then yes 40% (over the IHT ceiling) is confiscated by the state even if that renders the children homeless as you are not married. If you put the properties in joint names as joint tenants you inherit his share automatically and his estate would just be his half of the house so even less likely any inheritance tax. If they are in joint names as tenants in common eg he might want you to have a 20% share and he 80% then on first death it does not automatically go to the other owner -his share will pass under his will.

Yes, wills are a good idea. If he does not want you to have his properties he can leave them all to the children with perhaps a right for you to live in one until you die or remarry if he wants to. That might be more acceptable to him.

[awwwwmannnn]

i live with partner and we have a DD.

we are not married and have no intention to do so....what we have done is made Wills. The house is in DH's name with a lot of equity - upon his death the house goes to our DD, however there are provisions in the Will that i live in the property with DD until she moves out/sells or i remarry!! x

[scaevola]

Or until you have to sell up to meet the IHT bill?

[digerd]

In the majority of cases, DD will have already moved out and be married by the time your DP dies or you die. You will be elderly but the Will states you have no right to live there?

@ awwwwmannnn

[mumblechum1]

awwwmannn, hopefully you actually have a life interest in your partner's property?

[mumblechum1]

IHT for a single person kicks in at £325k, but if you marry and give everything to one another, no tax is payable on the first death, and when the second spouse dies, the threshold of £650k applies.

Not the most romantic reason to get married, but worth thinking about!

[SavoyCabbage]

Aaaaamann, my aunt did that and her sons sold the house when they were 18 and she had nowhere to live. Not because they didn't get on with her or anything, but because they were daft lads who owned a house but would rather buy a couple of cars with go faster stripes and beer.

[Kendodd]

If I were you, I'd try my best to get married. Sorry.

[megandraper]

If you're not married, inheritance tax is due over a certain amount (I think it's £325,000 but that might be out of date). Only if you're married can property be passed on without inheritance tax.

[awwwwmannnn]

perhaps i didn't explain myself very well.....which is normal lol

i have an interest in the property in that i contribute towards the mortgage etc and this has been noted in the Will - basically the house is for DD BUT nothing can happen unless i get married - she is not ablet to sell the house as long as i am alive. we went through all this with a Partner in work and he has made it so that basically i will not be booted out - don't really know much about wills and probate but he has assured me i will not be homeless if (god forbid) DP dies x

[AuntieStella]

Would DD be able to meet the IHT bill (40% of everything over £325k) from elsewhere in the estate? If not, you may have to sell up to meet the bill and then downsize using what's left over.

Contributions to the mortgage do not count for much when you are not married, btw. and do not establish an interest in a property. If he changed his Will, you'd be high and dry.

[Kendodd]

Also, if you split up, would you have any claim on the estate?

[tilder]

I had really strong objections to marriage, still do. I knew I would be financially disadvantaged by not being married in case of death or separation, but I was young, idealistic and childless.

Now have 3 children and am married. It is different for everyone. But broadly here is why.

No inheritance tax.
No delay getting access to money, dp etc in case of death or injury
It entitles me to his death in service, Ipension, full life insurance etc without quibble.
Gives me some grounds to claim in case of divorce.

Without it, having done the sums, the dc and I would have to sell the house very quickly and would struggle to make ends meet in a big way. For us, there was no other paperwork that came close to the security that a marriage certificate gives my children.

[awwwwmannnn]

@auntiestella - yes she would, there wouldn't be an issue with IHT, all this has and will be taken care of should the need arise.

i work in a law firm and the partner who done our wills knows our full financial status etc and has drawn up wills to cover every eventuality, including me not being homeless should DH die.

i kinda feel like everyone is having a bit of a go at me, and all i was trying to do was state my position. i am by no means stupid and as there is a lot of equity in the house and quite a lot of money involved apart from the house we have made sure that everything is in order and as water tight as it can be x

[Xenia]

For a huge load of women who earn a lot more than their man they are much better off not marrying. I would not have paid my ex nearly £1m had I just lived with him. It is not always a one way meal ticket being female - a good few women believe it or not in 2013 earn a lot more than their man. However IHT is an issue for the tiny % of estates where people have enough to be over the limit. You can put life insurance into trust outside of IHT - if i die (I am not married) to help ensure the children are not homeless the insurance can pay off debts and the 40% the state confiscates on death.

What is clear is that it is worth insuring your partner by a lot and have the proceeds in trust for your children if you die and then all those life insurance monies are kept outside the estate and no IHT is payable on them. You should sign the same documents for pensions too. All the life companies nad pension companies provide these documents for no charge.

[blueshoes]

Agree with Xenia. Marriage only economically benefits women if they earn less than their partners.

[digerd]

When I worked for the DHSS , all men had no choice but to pay a % of their salary into a widows pension fund, which would benefit only the wives who did not pay into it.
The majority of us were women who earned the same as the men.

There was no widowers pension fund. I didn't think that was fair.
I assume nothing has changed ?

[tilder]

I would agree that marriage financially benefits the partner that earns the least.

However a big issue for me was the effect that grief would have, on a situation that for me would already be marginal financially. That combined with not being next of kin would make all sorts of access difficult and slow.

I am aware that laws have changed over the last few years (plus my partner can now nominate a beneficiary in his pension and death in service) but for us marriage is still the only way.

[Kendodd]

I sound like I'm trying to railroad you into marriage, I don't mean to. I think people shouldn't get married just for monetary gain/protection of assets. For one partner the opposite is usually true anyway, although I think a lot of couples start off together with not very much in the way of assets between them (me and DH 20 years ago).

If you/DP don't want to get married, for whatever reason, then don't. I'm sure you know it is a less secure position to be in and have weighed up all the pro and cons and have decided that you still don't want to do it, after all, marriage isn't a business contract.