Love in Later Life – and what it means for inheritance
We are waiting longer than ever to get married. According to recent statistics from Royal London, marriage rates at younger ages continues to decline, there are an increasing number of men are getting married over age 60, as well as women aged over 50. Whilst we are waiting longer to find the love of our lives, what can the implications be of finding love later in life?
Firstly, if you are divorced (i.e. previously married – not simply co-habiting) but you plan to marry your new partner, you will need to complete an expression of wish form to make sure your pension is updated with your new spouse’s details if that is what you want, or possibly to nominate your children. Otherwise, not only is there a risk that the person previously named becomes entitled to the person’s pension, but families could find they are left severely out of pocket.
You should check to see whether or not any pension scheme has been set up under discretion or direction as this will make a difference. If discretionary, trustees can question whether the person on the form is the right one to receive the benefit, however, if it is set up as a direction, they have to pay it regardless. There are also important inheritance tax implications to consider which could make a significant difference to your family.
In a way, married couples are more straightforward, but for co-habiting couples, the rules vary quite significantly. Despite popular belief, there is no such thing as a common law marriage. It means many couples can live together for many years and raise children together, but, in the event of a spouse’s death, have very few rights indeed and may be entitled to very little.
It could leave the surviving partner without access to their deceased’s partner’s pension pot, leaving them without valuable income and at risk of real financial hardship. Also, if a property has been bought under a tenants in common arrangement, unless the surviving partner is named in the will, they will not automatically inherit the property.
There are other favourable tax measures that apply to married people – but not those who simply co-habit. All couples, married or otherwise, should also update their wills to reflect their change in circumstances and amend any beneficiaries as necessary. It is also important to consider who could or should act as your attorney/attorneys should you be unable to make decisions during your lifetime for yourself and to complete Lasting Powers of Attorney.
If you would like some advice relating to your own situation, contact the Private Client team at Downs Solicitors to see how we can help.