I’ve got a confession to make. At about half 12 yesterday, instead of keeping my nose to the grindstone, I was thinking about lunch. I had a hunger a regular sandwich wasn’t going to satisfy. I was weighing up The Galley chippy, maybe a Bagel Bean bagel (so much more than just a bagel) or Dominoes.
Then it hit me, I’ll go on O2 Priority and see if I can get a meal deal. Cheap and filling. Once I got there however, there were no meal deals to be found. I appeared to have forgotten about an event this weekend.
So, no meal deal for me but a premise for a blog post.
Now that Harry and Megan are going to be married what advantages will they receive (I’m going to use the term married here but it also applies to civil partnerships which are like marriages in every way but not called marriages. Hmm.) Anyway, steering away from that one
1. Dying without a Will.
If a person dies intestate (without leaving a will), the Administration of Estates Act (NI) 1955 sets out the order in which their family should benefit (i.e. receive property etc). If you die without a will, being survived by your spouse with no kids, your husband/wife will receive all of your estate. If you die leaving behind a spouse and kids your estate will be split between them with your spouse taking the larger portion.
If you are not married, your long-term partner will not have any immediate claim against any assets in your estate which are in your sole name, regardless of how long you have been living like a married couple. There is no legal standing for a Common Law Spouse.
A will is therefore essential to prevent your partner having to claim against your estate (in other words the claim would be against your beneficiaries under the Administration of Estates Act, most likely your children or your parents).
2. Inheritance Tax.
When you die your estate may be liable for inheritance tax. The current nil-rate band up to which you don’t pay inheritance tax is £325,000. [There is another £125,000 (and rising) residential nil-rate band but let’s keep this simple]
Every penny above £325,000 will be taxable at 40%. There is, however, an unlimited exemption of spousal gifts. So, if Harry leaves everything to Megan and pre-deceases her there will be no inheritance tax payable.
Similarly, any of the ‘unused’ portion of Harry’s nil-rate band that wasn’t required on his decease can be transferred to Megan so in the example above her estate on her death would have two £325,000 nil-rate bands or £650,000 before inheritance tax would need to be paid.
If you are a couple and not married, then you receive neither the spousal exemption nor the transfer of unused nil-rate band. This can have a drastic effect on the amount of inheritance tax your estate may have to play. Even if you have lived together for 50 years and have a grown-up family and grandchildren, but never married, you will still not receive the transfer of nil-rate band or the spousal exemption.
This obviously provides an extra incentive to conduct thorough estate planning.
3. Other tax reliefs:
- Capital Gains allowance can be shared by giving a share to your spouse on disposal.
- You inherit your spouses ISA allowance (allowing the cash to go to someone else if necessary).
- Marriage Tax Allowance if only one of the couple works.
- The surviving spouse may take a portion of their deceased spouse’s state pension, but this will depend on the circumstances.
As you can see social engineering at the state level has built some substantial benefits into being married. It doesn’t matter if you’re living unmarried with the same person for 40 years and have 8 kids. You will not receive the benefits.
Never wanted to marry? Married before and don’t fancy it again? Simply don’t see what all the fuss is about?
Then you absolutely MUST make a will and take steps to protect your estate from exposure to inheritance tax. By doing these things you will make dealing with your estate that much easier, at a time when things will be difficult enough for your loved ones.
Nothing on this site should ever be considered to be legal advice or research but if you do wish to receive advice on any of the content discussed please contact us on 028 3752 5400 and we will be happy to help you. Please note that whilst we will aim to provide accurate information the world changes at a fast pace so always follow up with your solicitor to ensure you are fully up to date with same. For complete Terms and Conditions please see the relevant section of our website.