Not tying the knot could leave finances in a tangle for cohabitees

• 4.6 million adults living as part of a cohabiting couple in the UK don’t have a will
• As the fastest-growing family unit, more and more cohabitees are financially exposed as the law doesn’t protect unmarried cohabitees
• By not fully understanding intestacy rules, three quarters (73%) of cohabitees risk leaving their partners nothing if they die 

According to research carried out by mutual life and pensions provider, Royal London, three quarters (73%) of cohabitees don’t fully understand the legal consequences if they or their partner dies without a will.

Thinking that loved ones automatically inherit assets when they die is putting 4.6 million cohabitees that don’t have a will at risk. A third (35%) also wrongly believe that they would be entitled to inherit a share or all of their partner’s financial assets, just because they lived together. Only 17% of cohabitees knew that if the partner who died owned all the assets, the cohabiting partner would receive nothing.

The changing face of the family unit

The steady decline in marriage has created a world of blended families with more couples choosing co-habitation. Yet over a quarter of cohabitees (29%) admit they didn’t know what their rights would be if their partner were to pass away without leaving a will. While living as a couple may be the new normal, it’s important to realise that it doesn’t come with the same legal protections or rights as married couples.

Unfortunately, cohabitating couples tend to wrongly assume they form a ‘common law marriage’ and often it’s only on separation or death they discover the same legal rights don’t apply to marriage and cohabiting. Having a valid will is essential as cohabitees do not automatically have rights to their partner’s estate if they die without leaving a will.

Making sure your assets go to those you want to receive them

If a cohabitee dies without a will, their partner could lose the home that they’ve lived in and paid towards. This is because intestacy law doesn’t recognise cohabitees. Children, parents, siblings and potentially, even a separated spouse are some of those who could benefit under intestacy ahead of the person they lived with. Having a will allows individuals to set out exactly what they want to happen when they die. It is essential for those with children and those who are cohabiting.

Across the adult population of the UK just under half (48%) have a will in place, but this falls to around a third (36%) among those living together but not married. Various reasons are given among those who do not have a will for not creating one, including not getting round to it yet (29%), having nothing of value to pass on (20%), and being too young to worry about it (18%).

However, those without a will say they would be encouraged to take one out if they became seriously ill (30%) or came into a significant amount of money (26%).

It’s worth noting that pensions are not normally part of someone’s estate and people should keep their nomination forms up to date with what they would like to happen.

Taking legal and financial advice is advisable to help plan and ensure that savings, assets, property and investments go to intended loved ones.

Clare Moffat, Pensions & Legal Expert at Royal London says:

"Having a will is really important for lots of different reasons. The fundamental reason for having a will is to make sure that you decide what happens on your death, not what the law stipulates should happen. It’s important not just for your financial arrangements, but also to choose who will look after any children if you die before they reach 18.

"It doesn’t matter how many years you’ve been living with your other half, cohabitees are not protected by the same laws as married couples and dividing the assets of a cohabiting couple can be complex.

"If you’re not married or in a civil partnership, and you die without writing a will, you’re not entitled to a penny unless you jointly own assets. If you have children together, everything goes to them and if you don’t have children, parents or siblings would stand to inherit assets, not the partner.

"Not making a will can create all kinds of complications, but especially if you have children, are unmarried or separated. To make sure everything goes to your nearest and dearest, rather than the law dictating how your assets are divided, it’s important to plan. No-one likes thinking about death but writing a will can make life much easier for anyone left behind."