Making A Will Is Vital For Cohabitors

By Author: Steven Tomey
Total Articles: 8
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As London Will Writers one of the more common misconceptions we encounter is the belief that cohabiting couples think they will be protected to the same extent as married couples. And, I'm sure we at Niche Wills are not alone in our findings amongst other Will Writers and Will Makers.

We do not know if this is because historic media spin or simply the modern belief that everyone is treated identically and fairly in our society? What we do know is that when applied to Will writing and inheritance tax, parity could not be further from the truth, and it takes a skilled professional Will Writer to redress the balance.

The fact is our Government, and Governments before them, place emphasis on a nuclear married family as a stable environment to nurture our young. This manifests itself in a variety of fiscal measures and in the laws of intestacy that govern the distribution of an estate in the absence of a Will.

The main fiscal measure we concern ourselves with here is inheritance tax. The advantage for married couples can be plotted to recent history when the current Chancellor, Alistair Darling, made a ...
... significant announcement on IHT in October 2007 which in effect doubled the exemption amount for married couples by allowing the nil rate band of £325,000 to pass onto the final estate calculation for death of the last spouse. Effectively, this means the first spouse's exemption of £325,000 can be added to the second, equating to £650,000 before the children have to pay tax. There was however no such change in policy for cohabiting couples who are still effectively treated as ‘singletons' in respect of IHT despite any number of years they may have resided together.

What does this practically mean? Well where we are based in London: £650,000 normally means the family home will be outside of tax in respect of married couples, however, £325,000 is unlikely to be sufficient. And, with an IHT charge of 40% for the excess above the nil rate band a cohabiters could be faced with paying whopping extra £130,000 in inheritance tax.

So what can be done? Well this is obviously not a reason to get married. It may be the catalyst to storm Westminster for IHT reform, but again not really a plausible solution. The answer is exploit the other exemptions to the maximum and a skilled Will Writer should be able to help explain these in great detail but to give you an idea there are normal and annual exemptions. Trusts, life assurance and ‘lifetime gifts' can also be used to great effect.

As well as careful tax planning, cohabitors need to be acutely aware of the laws of intestacy. These set out the legal rules on the disbursement of assets along the bloodline in the absence of a Will. Anything that could be viewed as a sole purchase by your partner could be subject to successful challenge by their family in the event of their death. A Will however reflects the wishes of the deceased and if that is to pass on their property to their partner then so be it. Succinctly will making is fundamental for any cohabitors.

What is the next step, well Professional Will Writers specialise in making Wills and offer the most favourable terms when compared with traditional solicitors.

Richard Stokes
Niche Wills - Specialist Will Writers in London
www.nichewills.co.uk

For more information about Will Writer please visit www.nichewills.co.uk