Probate and Inheritance Explained for Same-Sex Couples

09 September 2019

Although the legal Probate process is the same for both same-sex and mixed-sex couples, same-sex couples are statistically more likely to cohabit, without any legal recognition of their relationship. This can have a significant bearing on how the Probate process works and on a person's entitlement to inherit from their deceased partner's Estate.

We explain how Probate and inheritance works under these circumstances.

Marriage, Civil Partnerships and Cohabitation for Same-Sex Couples

Statically it has been shown that same-sex couples are more likely than opposite-sex couples to be living together or "cohabiting" without the legal recognition of being in either a registered civil partnership or a marriage. This could be attributed, in part, to the fact that same sex couples were unable to obtain legal recognition for their relationship until 2005, when Civil Partnerships were introduced in England and Wales, followed by same-sex marriage becoming legal in in March 2014.

According to the Office for National Statistics, the proportion of same-sex married couples in the UK has dramatically increased since 2017. Despite this, more than 50% of all same-sex couples living together in the UK remain neither married nor in a civil partnership.

What Does this Mean for Probate and Inheritance?

In England and Wales there is no legal recognition or protection for cohabiting partners. Cohabitation is sometimes misguidedly referred to as common law marriage, but there is no such thing as common law marriage in England and Wales. This is true for both mixed-sex and same-sex couples.

So, how does Probate work for cohabiting couples compared to those in a marriage or civil partnership?

Well, if someone dies leaving a valid Will, then their Estate will pass in accordance with the terms of that Will. In their Will, they can distribute their Estate in any way they choose and to anyone they choose, regardless of their legal relationship with that person.

However if a person dies without leaving a valid Will then their Estate will be dealt with in accordance with the Rules of Intestacy. These set out who is legally entitled to inherit a person's Estate, placing their relatives in order of priority. The deceased's spouse or civil partner is at the top of this list, followed by any children they have, then their parents, then siblings, etc.

It is important to note that the Rules of Intestacy do not provide for unmarried cohabiting partners, meaning they would be entitled to inherit nothing.

Probate for Jointly Owned Assets

Assets owned jointly, such as a bank account, or a house owned as joint tenants will not form part of the deceased person's Estate. Instead, these assets will pass automatically to the surviving joint owner, regardless of their relationship to the deceased. Probate is not usually required for this.

Please note, the Probate process is different for property owned jointly as tenants in common. For more information on the differences, see Joint Tenants & Tenants in Common.

Inheritance Tax Rules for Cohabiting Same-Sex Couples

Even if there is a Will, there are Inheritance Tax implications when assets are being passed to the deceased's cohabiting partner.

Under current Inheritance Tax regulations, any assets – regardless of value – passing between spouses or civil partners will be exempt from Inheritance Tax (providing that both partners are domiciled in the UK). This is because spouses and civil partners are exempt beneficiaries. The same exemption does not apply to cohabiting partners.

This applies to assets owned in the deceased's sole name, passing under their Will or the Rules of Intestacy, as well as jointly owned assets passing automatically to the survivor.

This means that while a cohabiting same-sex couple can leave their Estates to each other in their Wills, the surviving partner's entitlement could be liable for Inheritance Tax. In some cases, this could mean that the surviving partner needs to sell the property or asset they've inherited in order to pay the Inheritance Tax.

With our Probate Complete Service we take full responsibility for getting Grant of Probate and dealing with the Legal, Tax (excluding VAT), Property and Estate Administration affairs.

Inheritance Tax Example for a Cohabiting Couple

For example, Michelle and Kelly have lived together for eleven years and own their property as joint tenants. They are not married or in a civil partnership, but as they own their property jointly they are confident that when either of them passes away, the other will inherit the property outright.

Their house is valued at £800,000 and so they each own £400,000 of the property. This will be included in the value of their respective Estates for Inheritance Tax purposes.

At present, the basic threshold for Inheritance Tax is £325,000 for each individual. If either Michelle or Kelly were to pass away now, their respective share of the property would automatically pass to the survivor. However, the value of their Estate (including their half share of the property) over £325,000 will be subject to Inheritance Tax at 40%.

This means that if Michelle passes away, Kelly automatically inherits her share of the property, at a value of £400,000. Inheritance Tax will need to be paid on £75,000 of this, calculated at 40%, which amounts to £30,000. Unless Kelly can raise this money, she may need to sell the property to settle the Inheritance Tax bill.

Can a Cohabiting Partner Make a Claim against the Estate?

If a cohabiting partner is left with little or no provision either under the terms of a Will or the Rules of Intestacy, it may be possible for them to make a claim against their partner's Estate. Under the Inheritance (Provision for Family and Dependents) Act 1975, certain individuals are entitled to make a claim. For more information, see Who Can Make a Claim on an Estate?

Making a claim against a partner's Estate can be an expensive and time consuming process, not to mention making an already emotional time even more challenging.

Before considering making a claim against an Estate, it's important to seek legal advice from a Probate Specialist.

Importance of Making a Will

A recent report commissioned by Royal London and carried out by IRN Research suggests that around 54% of adults in the UK do not have a Will in place. Given the statistically high proportion of cohabiting same-sex couples, there is an increased risk that same-sex couples could end up with no say or control over how their partner's Estate is dealt with when they die.

This is one reason why making a Will is particularly important for same-sex couples.

One Co-op Member told us:

"As a same-sex couple we felt we needed more than most to have our wishes set in stone, as we could not trust families not to intervene and try to help themselves should one of us die. We saw the exact scenario happen to a couple we knew."

Probate Support and Advice

As you can see, there's a lot that needs to be considered during Probate. If you have any questions about the Probate process, our Probate Advisors can help you by providing free initial advice. What's more, with our Probate Complete Service, we can take responsibility for dealing with all the legal, tax and administrative work that Probate entails.

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