Cohabiting couples face inheritance disputes

The Government's proposed reforms to extend inheritance rights to cohabiting couples could inadvertently lead to unnecessary disputes by failing to define what constitutes a ‘cohabiting couple’ and how their rights differ from those of married couples. TWM Solicitors, a prominent private wealth and family law firm, has raised concerns that “far too many loose ends” exist in the proposals, which are currently under consultation until August 14.

The reform aims to allow ‘qualifying cohabitants’ to inherit each other’s estates automatically, similar to married couples, when one partner dies without a will. However, the lack of a clear definition for qualifying cohabitants leaves ample room for confusion. Madeleine Beresford, a Partner at TWM, highlights the potential chaos this could generate, stating that “everything in these reforms hinges on what a cohabitant actually is – and the fact that the Government hasn’t defined it risks creating a significant new uncertainty.”

Multiple issues arise from the proposed changes. Unlike claims regarding disputed estates, the automatic intestacy rights would require determining eligibility without full judicial assessment. This raises questions about who decides who qualifies and what evidence is considered. Additionally, the complexity of non-traditional living arrangements, including polyamorous relationships or long-term shared households, complicates the identification of a cohabiting partner. Beresford questions whether cohabitation would revoke existing wills, as marriage currently does, and if not, why this distinction exists.

Furthermore, Beresford points out that the proposed reforms do not extend the inheritance tax exemption to cohabiting couples, despite married couples claiming a significant £5.2 billion in relief in the previous tax year, an increase from £4.9 billion. She warns that while the intention of modernising the law may seem noble, there is a substantial risk of generating “significant uncertainty, inconsistency and litigation.” Such complexities mean that cohabiting couples could find themselves at risk, adding another layer of complication to an already fraught process.

In summary, the proposed reforms to intestacy laws could lead to new disputes among cohabiting couples if not carefully defined