Losing a loved one is always a very difficult time. Unfortunately, it can be made even more challenging if the friends and family of the deceased subsequently discover that their loved one’s assets won’t pass on as they presumed.
We often come across people who have misconceptions about how inheritance works under English law. Here, we set the record straight on the three most common inheritance ‘myths’.
1. There is no such thing as a common law marriage
Many cohabiting couples are under the misconception that the rules which apply to married couples also apply them as the so-called “common law spouse” – a term which, although often bandied about, has no legal meaning.
If an individual dies without having a valid Will in place, his or her estate will be distributed in accordance with the intestacy rules which do not provide for the survivor of a cohabiting couple. Instead, the deceased’s children will inherit at 18; if there are no surviving children, the deceased’s parents will inherit or, if they have also died, the deceased’s siblings.
Unmarried couples do not have the same inheritance tax (IHT) benefits as their married counterparts. Assets passing between spouses are exempt from IHT (“the spouse exemption”). Every individual has an IHT allowance of £325,000 (“the nil rate band”) and, if certain criteria are met, an additional IHT allowance of £175,000 (“the residence nil rate band”). When a married individual dies, his or her unused IHT allowances pass to the surviving spouse. When an individual in an unmarried couple dies, there is no spouse exemption and the nil rate band and, if available, the residence nil rate band are not transferrable to his or her surviving partner. Instead, the deceased’s available IHT allowances are applied to the value of his or her estate and if the value exceeds these, the excess will be taxed at 40%.
2. Getting married revokes your existing will
Many individuals are not aware that a will is ordinarily revoked by subsequent marriage.
Take, for example, the fictitious couple Jack and Jill who are in their late 50s and are cohabiting. Jill has an adult daughter from a previous relationship. Jack and Jill are living in a property inherited by Jill from her deceased parents. The property is owned solely by Jill. Jack and Jill have valid Wills in place leaving their estates to the survivor of them outright on the first death.
Jack and Jill subsequently marry without putting new wills in place. Jill sadly dies and her estate is subject to the intestacy rules.
As Jill’s surviving spouse, Jack is entitled to a statutory legacy (currently £270,000, increasing to £322,000 for deaths on or after 26 July 2023) ) together with half of Jill’s residuary estate and her personal belongings; the remaining half of Jill’s residuary estate is to be given to Jill’s daughter. There is a strong possibility that Jack will not be entitled to the property as part of his share under the intestacy rules and in order to be able to continue living in his home, he may have to resort to pursuing a claim for financial provision from Jill’s estate. The Court will have to consider whether the intestacy rules have failed to make reasonable financial provision for Jack and, if so, what the relevant provision should be.
3. A marriage can’t be set aside retrospectively due to lack of mental capacity
A decree of nullity in relation to a marriage because one of the party’s lack of mental capacity is not retrospective. Additionally, the current law does not allow for a marriage to be set aside after one party has died (even if there is conclusive evidence of incapacity whilst both parties are still alive).
As previously mentioned, marriage generally revokes any previous wills made by that individual. Therefore, even if that individual’s marriage is later declared a nullity, its effect will still have been to revoke any previous wills the individual may have made and on death his or her estate will be subject to the intestacy rules.
A very sad case put before Parliament in 2018 was that of Mrs Blass, a 91 year old widow suffering from advanced vascular dementia and cancer.
Mrs Blass made a will in 2004 leaving her estate to her children. Mrs Blass later formed a close relationship with a 67 year old man who, according to her family, exerted a controlling influence over Mrs Blass. The two were married in secret in 2015 and the first her family knew of the marriage was shortly after Mrs Blass’ death in 2016. The marriage had revoked Mrs Blass’ will, and her estate was subject to the intestacy rules (see above). If the family had become aware of Mrs Blass’ marriage prior to her death, an urgent application could have been made to the Court for a statutory will counteracting section 18 of the 1837 Wills Act.
Any one of the above misunderstandings can become costly and emotionally damaging for the family. We have looked after the affairs of our clients for generations and have a great deal of experience in this area of practice. If you require specific professional advice, please discuss with your usual contact in the firm or email me for further information.