Thousands of couples across Scotland chose to live together without getting married – for a wide variety of reasons. However, what most fail to realise is that without proper estate planning, they may be at risk of becoming involved in complicated legal matters.
When a couple have lived together for some time, typically both parties will have contributed to building a home and accumulating wealth, but if one party dies without making a Will, the other may have to follow a complicated legal process to obtain any form of provision from the deceased’s estate. In this article, we look at some of the key considerations for unmarried couples and explain why estate planning is vital when you are cohabiting.
If you are cohabiting and your partner dies without leaving a Will (known as dying ‘intestate’), the estate will be distributed in line with specific rules known as the ‘laws of intestacy’. Under these rules, cohabiting partners will not automatically inherit, except in the circumstances where you owned the property jointly. For example, where you bought a house together and both of you are named on the title.
If your partner dies intestate, you can apply to the court within six months of the death to obtain a share in their estate. However, this is not guaranteed and can be a difficult process at what is already a challenging time. The only way to ensure that you and your cohabiting partner can inherit from each other is to write a Will.
It is a sad reality that loss of capacity can happen to anyone at any time, and impacts many families at various stages of life. Without a Power of Attorney in place, no one has an automatic right to make decisions on your behalf - even where you have been living together for many years.
If your cohabiting partner loses capacity and you do not have a Power of Attorney in place, you will have to go to court to obtain a Guardianship Order, or an Intervention order, to make decisions on their behalf. You may lose access to any bank accounts held by your partner if they lose capacity, which for many, can be very problematic to household finances.
Putting a Power of Attorney in place is straightforward while you are your partner still have capacity and can help you to avoid difficult legal matters at a later stage. Although these difficult circumstances may never arise, it can give you peace of mind to know matters are taken care of.
Cohabitation agreements set out details of arrangements for what happens if your relationship breaks down, but also arrangements for living together. You can include anything you wish in a cohabitation agreement, but it will typically include provisions for:
Any family home - the agreement will set out who owns the property, and what should happen to the home on separation.
Money and bills - there may also be provision for who pays the mortgage and bills, and who will make these payments if you are to separate.
Pensions - and whether you wish to nominate your partner for any death-in service benefits you may receive.
Any provisions for financial provision of children will not be legally binding, but can be included in the agreement where it would be above child maintenance. For example, paying for university or school fees.
If you have any questions about the issues covered here, or if you would like to discuss Estate Planning or other related matter including Wills, Power of Attorney or Trusts with our lawyers, please call us on 0131 225 1200 or fill in our contact form.
Our personal, attentive service coupled with sage, astute and commercially-minded guidance, allows us to build long-term, ongoing relationships with our clients, helping them to protect assets throughout generations. We clearly outline the implications from initial contact, helping to dispel the mystery behind the law and legal process. Our highly personal service reflects our culture, which is centred on integrity and trust, and the expert guidance we provide has been designed to be an investment, not an expense.