Wills

Civil Partners have the same rights as married couples in relation to inheritance issues. For example, they have the right to inherit some or all of their partner’s estate if they die without leaving a Will.

However, same-sex co-habitees do not have these rights, i.e. if two people of the same sex live together but decide not to form a Civil Partnership.

If you are in a Civil Partnership and you die without leaving a Will, if your partner survives you by 28 days, then they would inherit your estate, unless it was valued at more than £250,000 in which case it may be split between any children and possibly other family members. If you are not in a Civil Partnership and were to die without a Will, any surviving partner will not automatically receive any entitlement, except for assets you hold together as joint tenants.

Whatever your circumstances, it is important to have a Will to prevent any unintended outcomes and to deal with such issues as:

• Who should deal with your estate when you die? (i.e. your Executors)
• How should your assets be distributed?
• If you have children under 18, who should be appointed as their guardians?
• Any tax implications of leaving assets in particular ways

Inheritance Tax is currently payable on death on the value of assets over £325,000 at 40%. Like married couples, Civil Partners can combine these allowances (provided they have not otherwise been used), so when the second partner dies, at today’s rates they could have a threshold of £650,000 before inheritance tax is payable. Same sex-co-habitees cannot combine these allowances without proper planning.

Any assets left to a surviving Civil Partner would be free of inheritance tax, but if left to a same-sex co-habitee they could be subject to inheritance tax (if above the threshold).

This could mean that any beneficiaries you intended to benefit after you had both died would receive less of your estate, since only one allowance would then be available. It is therefore important that you seek legal advice to ensure any Wills you put in place are tax-efficient.

When you make a new Will, it will revoke any existing Will. If you were to enter into a Civil Partnership, that also revokes any Will you have in place, unless you make a Will in contemplation of that Civil Partnership.

In England and Wales you can leave your assets to any individuals you wish. However, certain ‘dependants’ may be able to make claims for ‘reasonable financial provision’ if they are left out of the Will.

Civil Partners are in a stronger position than same-sex co-habitees in relation to making any such claims, in a similar way as Civil Partners have greater protection in the event of dissolution of the Civil Partnership than co-habitees do in the event of a break-up.

This information was kindly prepared by Kuits’ Tax & Estate planning team.

If you would like further information please contact The Lesbian & Gay Foundation.Tel: 0845 3 30 30 30

December 2011