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Readers' Questions - Wills and inheritance

We answer real readers' questions about making wills and other inheritance issues for couples that are living together....

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Dear Mary,
My partner and I own a house together in both of our names. He is divorced and has a daughter from this relationship, who he pays maintenance for. His ex will not let him see her. He works abroad, and I am down as his next of kin on his paperwork, and also down as the person to receive his life insurance should he be killed whilst at work.

I'm worried that although I am down on all this as next of kin, his ex could claim money for his daughter or even half the house (we both own it).

We haven't made a will yet, he keeps saying I'm down as next of kin and named on the insurance policy, but I am worried that I am not protecting myself. Where does his ex stand if something happens, or his daughter, or me for that fact?

Get him down to the solicitors' office to make a will right away! I'm not quite sure what 'paperwork' you are down as his next of kin on, but it probably just means that you are the person that should be informed if anything happens to him. It may mean he has nominated you to receive any death-in-service payment from his pension scheme. It certainly doesn't mean he doesn't need a will.

Without a will his daughter will inherit everything from his estate. This will include half the house if you own it as Tenants in Common, but not if you own it as Joint Tenants (check!).

If you own the home as Joint Tenants, you will receive his share of the home (because you are the other owner, not because you are his partner). You will also receive any payment from his life insurance because he has nominated you. If he has nominated you for his pension, you may also receive money from that. But his daughter would get everything else, including his personal possessions, his music collection, the gifts you have given him, etc.

Provided that his divorce is finalised and he isn't still paying his ex-wife maintenance (just child support), his ex-wife shouldn't have a claim on his estate.

See our guide to Wills and LivingTogether (490 KB) for more information and help on how to make a will.
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Peter’s Inheritance Tax problem

Jim told me I needn't worry about the future - I'd be provided for and I'd always have the house. Sadly after he died I discovered it wasn't as simple as he'd thought.
Read more...

Dear Mary,
My partner and I are living together with myself and my two children aged 12 and 15, (my partner has two daughters in their 30's from a previous relationship). My partner bought the house for us to live in together but it is only in his name, we both have life assurance on the property but the mortgage is only in his name.

He has made a will leaving the house to me in case off his death, as we are not married will this be ok? And if the life insurance only covers 85% of the mortgage owed what happens as far as me inheriting the home goes? I need to know if my children and myself will end up homeless.

It's great that your partner has made a will and got a life insurance policy. This is all very sensible and should ensure that you and your children inherit from him. In theory, his daughters could challenge his will if they thought it was unfair but, if they aren't financially dependent on him, it is unlikely they would be successful. You would use the life insurance to pay the rest of the mortgage. If it only covers 85% of the money owed, you would probably still have a small mortgage left - but perhaps this wouldn't be a problem if you have an income or other savings.

The biggest problem that comes to mind is that you would have very little security if you and your partner split up. Of course, you probably don't think that you will, but who knows what could happen ten or twenty years down the line? If you did split up, you would have no automatic right to a share of the home and would have to go if he asked you to. If your children are still under 18 you may be allowed to stay in the home temporarily, but this would still mean you had no right to stay as soon as the youngest has finished full time education. There are some circumstances (for example if you have contributed to the mortgage, or paid for renovations) in which you may have a claim to a share of the home - but this would necessitate going to court, with all the stress, expense and delay that comes with it. Read page 9 of our housing guide (350 KB) for more details as to what your rights are and suggestions of what you should do.

I strongly suggest you talk to your partner about what you each expect/would want to happen if you split up, and make a living together agreement. Even if you agree that you won't have a share of the home, it is still best to agree this now and write it down.

I know a lot of people's reaction to the idea of discussing what would happen if they split up is horror at the lack of romance, but I don't think it is unromantic. Ensuring that, if your relationship does end, the split will be as easy and fair as it can be and that you've protected each other from whatever might happen in the future - that's actually a very loving thing to do. Have a look at our guide to making a living together agreement (2.1 MB) for step-by-step help on how to do it.
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Dear Mary,
What happens to my pension when I die? Does my partner have it?

It's not quite that simple. There are two things to look at here - most schemes provide some sort of lump sum pay out if you die before you retire, many will also pay a pension for your dependents. Whether your partner would receive anything from your pension after you die depends on the terms of your pension scheme.

Nearly two-thirds of pension schemes covering public sector workers (such as teachers, nurses, and local authority employees) will pay a lump sum to an unmarried partner, but not a pension. Most private sector schemes will pay pensions to an unmarried partner, if they qualify under the terms of the scheme.

Most occupational and personal pension schemes are set up so that the scheme decides who should get any lump sum and dependants’ pensions if you die. If you have filled in the form nominating your partner to receive the death benefits, then they will usually be paid a lump sum (and maybe a dependents pension) when you die. If you haven't nominated your partner, the lump sum will usually be paid to your estate - where it might be taxed and will be held up until probate is granted - before it goes to the person you have left it to in your will (if you have no will, it will be your nearest blood relative, not your partner). For more details, see our guide to Wills and LivingTogether (490 KB).
You need to ensure you have nominated your partner for any lump-sum payment, and see if he/she will be entitled to a dependents pension. Check with your pension scheme.

If your partner is relying on your pension to provide for you both in your golden years, it would be sensible to build up some of the family’s savings in your partner's name.

See our Pensions guide (426 KB) for more details.
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Dear Mary,
My partner and I have been living together for 15 years now; we have 1 child aged 12 years old. My problem is this, my partner has just received a paternity suit filed in the Czech republic, from the result of a one night stand nearly two years ago (we were going through a bad patch in our relationship, we did split up but remained living together!). I was wondering if he is the child’s biological father, besides paying maintenance, will this child be able to inherit my partner's share of our jointly mortgaged property, if anything happens to my partner? (My partner has no will as of the moment), what would this child be able to claim (inheritance) if my partner & I married? Really need your help & advice on this matter, as don’t know where I stand or what I can do about it. Please help ... Thank you.

If your partner is this child’s biological father, he would inherit a share of your partner’s estate if your partner died without a will. All biological or legally adopted children have the same rights when it comes to inheritance (it doesn't matter what relationship they are from). Whether this would include your partner’s share of your house depends on how you own the house. You can jointly own property in two ways – as joint tenants and tenants in common. If you own it as joint tenants – your partner’s share will automatically transfer to you, and not be included in his estate. If you own it as tenants in common on the other hand, his share will be included in his estate, and (along with all his savings, his car, and personal possessions, etc) will be divided between his biological children. See pages 10 and 11 of our housing guide (350 KB) for more details of your situation.

If you married, the situation would be slightly different because you would inherit the first £125,000 of the estate (and have a life interest in half the rest). Anything left over would be divided equally between your 12 year old and any other biological children your partner may have.

Your partner should make a will, regardless of whether this child is his or not. You should too. Without one you won’t inherit anything from each other (except his share of the home if you own it as joint tenants), and you won’t have the legal right to organise each other’s funerals. If nothing else, making a will also makes things simpler for those you leave behind.

If this is your partner’s child s/he would have a right to challenge his will if it was ‘unfair’ - your child would too, and so would you (if you could prove you were dependent on your partner). For this reason, it is a good idea for your partner to get legal advice as part of making a will.

Read our guide to Wills and LivingTogether (490 KB) for more details of what will happen if you die without a will, and guidance as to how to make one as quickly, easily, and cheaply as possible.
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Dear Mary,
My partner and I have been living together for the last 7 years. We have decided to make a will each leaving our share of the property to our own children on the condition that the surviving partner can continue to live in the property until he/she dies. Although I work and we share all household bills, if my partner (who is 14 years older than me) was to die before me I would have difficulty paying the full household costs. Is it possible to take out life insurance on my partner and should the worst happen have the insurance pay out to me rather than his children? Another option I would like to look at is to take out an insurance policy that would also enable me to cover the cost of half the value of the property so that I could buy his children out of their share.

You do not say how you own the house - as tenants in common or as joint tenants. If you own the home as joint tenants, when one of you dies, ownership of the whole home will pass to the other owner. It cannot be left to someone else. If you are currently joint tenants you could change to tenants in common but this has other implications. See pages 10 and 11 of our housing guide (350 KB) for more details. You should see a solicitor, and explain your concerns and wishes and he/she will be able to explain all your options. This way you can ensure that your wills reflect what you want to happen. See our guide to Wills and LivingTogether (490 KB) for how to do it as simply and cheaply as possible.

If you will have difficulty if your partner dies, it would be very sensible if he took out some life insurance. Life insurance payments can go to whoever has been nominated to recieve them.

While you're sorting out all these things, it is always a good idea to think about Inheritance Tax. If everything your partner owns, or everything you own (including your share of anything you own together), amounts to more than £285,000 (or may in a few years) you need to start thinking about it. Read our Inheritance Tax (333 KB) leaflet for more information. Your solicitor will be able to help you with this too.
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Dear Mary,
I have been living with my partner now for 26 years. We have three children together. Our relationship is happy but I am now worried that I’ll be left with nothing if that changes. I have worked all the hours that god sends, but for what? The house is solely in his name, and just recently I’ve discovered I’d have to pay inheritance tax on it if he died. This would be totally unfair. What can I do? He is dead set against getting married!

You are not alone. The good news is that you don’t have to get married to protect yourselves. There are other things you can do. True, it’s a bit more fiddly than getting married but, on the other hand, it means you can get exactly the arrangement you and your partner want.

First of all, sit down together and make a list of all the problems that may, if you were very unlucky, crop up. Then talk about possible solutions.

For example, you are worried about what would happen if he died. Part of the solution would be to each make a will, leaving everything (or whatever share you wanted) to each other.

Similarly, you could consider putting some of the house into your name, either half of it (and own it as joint tenants) or a percentage of it (say 30%, and own it as tenants in common). This would legally give you half (or whatever percentage) and would give you some security in case you split up. It could also be enough to protect you from an inheritance tax bill if your partner died, as it would reduce his estate. You should get advice from a solicitor about doing this, and take some advice from an inheritance tax specialist as to how else you could avoid an inheritance tax bill.

See our wills (490 KB), Inheritance Tax (333 KB), and housing (350 KB) guides for more details.

It might also be a good idea to make a living together agreement (2.1 MB). Do you have a pension in your own name? You should think about how to ensure you'll be OK in your old age whatever happens. We've got a pensions leaflet (426 KB) too.

It seems like a lot to do, but much of it can be done very quickly and painlessly (and cheaply). Don't be put off!

Unfortuantely, we can nolonger take answer questions to the problem page. Hopefully, you will find the answer to a similar question on these pages.

February 2010

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Married or not looks at the differences between marriage and cohabitation, what your rights are, and how to raise some of the trickier issues with your partner.

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