Understanding how you may be affected if you or your partner dies is not an easy conversation to have. However since current laws don’t offer any protection or formal guidance on the division of wealth and assets for unmarried couples, it is wise to put plans in place now.


For anyone, a Will is a must, now and not when you are ‘old’. In the case of couples who are not married or who have not entered into a civil partnership, this becomes even more of a priority. Whilst we all hope to live to a ripe, old age the truth is death comes to all of us and sometimes unexpectedly.

People don’t realise that a Will not only distributes your estate how you’d like it distributed but it also speeds up probate! If you didn’t have a Will the authorities have to go through a right palaver in identifying who an appropriate ‘executor’ or ‘administrator’ would be to handle your estate as well as identifying all the potential beneficiaries.

This could take ages if you have a complicated family structure, all the while your poor partner won’t have access to your bank accounts, be it personal or business, to manage day to day living expenses.

If you have children, it becomes even more important, heaven forbid, if both parents were to pass away and there wasn’t a Will, your children won’t automatically go to a trusted aunt or grandparents, the state takes charge and they could have very different views on who should raise your children, which may even mean splitting your children up to live with different guardians at the most sensitive and vulnerable time of their lives.

On a slight tangent, quick tip, for good practice, set up a life policy and put it in trust for the benefit of your children should you or your spouse pass away, it will just make things so much more easier for your guardian to manage family budgets with new members of their family.

Inheritance Tax %

Inheritance Tax can be a real headache for couples who are not married.  As mentioned above, leaving things to your partner in your Will is an important point to consider. However, where estates are left to an unmarried partner, anything over and above £325,000 can be subject to a 40% tax deduction. In the case of married couples, this doesn’t happen – so what should you do if you haven’t tied the knot?

Seeking appropriate financial advice is a good first step as protecting your partner from a huge Inheritance Tax bill is possible.  One of the simplest ways to do this is, could be by splitting the estate that you own jointly, evenly. So any assets that you own should be 50-50 split to bring each half hopefully below the tax band.  The 50% that is owned by the deceased partner now passes into a trust, which if it’s done properly means it’s not in the estate of the survivor, thereby removing upto £325,000 from their estate, which means inheritance tax on their death won’t need to be paid on that amount.

Generally speaking, if wealth is largely consolidated in property there is little planning that can be done without selling and cashing in the property, as often most people start concerning themselves with inheritance tax issues when they’ve settled into their mortgage free home and someone tells them the government can take a whopping 40% out of their estate leaving only 60% (plus the IHT free amount which could be upto £650,000) to the kids, after they’ve worked a lifetime to achieve some sort of financial security. Yes, you can take out a whole of life insurance policy but that is most likely to mitigate the tax at best and not negate it, and at the end of the day you’re still paying a life company insurance premiums.

The fact is, the easiest way to avoid inheritance tax on the death of the first unmarried partner is to get married; a spouse is a highly efficient tax vehicle to whom you can transfer property, cash, shares, assets that have a gain without paying any tax whatsoever.

But guess what, inheritance tax isn’t the biggest threat…keep a lookout for an upcoming piece on Death Planning, it will be listed in the Estate Planning category.


Disclaimer: The information contained within this article are provided as illustrative purposes only based on legislation at the time of publication. Nothing in this article should be construed as advice or guidance to one’s personal situation. The value of your investments may go up and down, similarly, other aspects of your wider lifestyle and financial context may impact on your objective. In a nutshell, don’t rely on the blogs and the articles for personal advice, and always seek advice for a qualified professional.

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