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  • Overview

    Getting married or entering into a civil partnership is usually one of the most important days of any person’s life, and the preparations can take months in advance of the big day. However, one of the (admittedly less than romantic) considerations that also needs to be thought about is the effect that getting married can have on your will.

    Many people who get married for the first time may be at an age where they have not necessarily thought about having a will prepared. As a result, the intestacy rules would apply to the bride and groom, but the effect of the rules will change once the wedding has taken place. Before getting married, the bride and groom would have no rights to benefit from each other’s estate because the intestacy rules look at the deceased’s person’s biological relatives (including children, parents, brothers and sisters and so on). As a result, an unmarried partner or a co-habitant falls outside of the class of beneficiaries referred to in the intestacy rules and would not inherit anything as a result.

    Following the marriage, the position is very different as a spouse or civil partner is included within the intestacy rules. Indeed, the spouse is usually the first beneficiary to be considered and will usually be entitled to inherit all of the deceased’s person’s personal effects as well as at least part of the estate as well. However, the intestacy rules may not necessarily allow the surviving spouse to inherit all of the estate as, depending on the family left behind, the estate may need to be split between the spouse and the children (if any) or between the spouse and wider beneficiaries (such as brothers and sisters). The intestacy rules will therefore work differently as family circumstances change and may end up with different beneficiaries inheriting in different shares as between one family and the next. For this reason, and certainly where there are significant assets such as houses involved, it is always sensible to have wills in place that can overwrite the intestacy rules and therefore ensure that the wishes of the married couple can be carried out in terms of what happens to their assets if either one of them dies.

    For other clients who are perhaps marrying for the second time, there can be other issues to consider. For example, the bride and groom may already have wills in place and may hold significant assets from their first marriages, especially if one or both of them has been previously widowed. Once the new wedding takes place, any wills that the bride and groom have in place would immediately be revoked which means that the intestacy rules would again apply, potentially causing difficulties when one of the parties later dies.

    Whether it is a first marriage or a second marriage, it is possible to make a will “in expectation of marriage”. This kind of will must contain clear wording to the effect that it will remain valid even after the wedding has taken place in which case the provisions of that will can be preserved. In order to make a will in expectation of marriage, the parties must be engaged to each other and have an intention to get married although the date itself does not necessarily have to be set. Once the wills have been signed, they will remain valid even after the wedding has taken place and can therefore help to provide some clarity on the position moving forward.

    No discussion of wills can ignore the fact that Inheritance Tax can also be a major factor and, in some cases, can even be a reason why people get married at all. Once the bride and groom have married, spouse exemption will be available on anything that they leave to each other when they die (whether this is through their wills or by operation of the intestacy provisions). This spouse exemption is not available for unmarried couples who therefore potentially might pay tax if one of them dies and the survivor inherits, although the partner who dies first will still usually be able to benefit from a tax-free allowance in any event. This allowance is worth £325,000 in the tax year 2020/2021 and has been set at that level since 6 April 2009. Even if the parties have got married, spouse exemption will only apply to those assets which pass to the surviving spouse, so if the estate of the spouse who dies first has to be split not only between the surviving spouse but between other beneficiaries as well (perhaps because of the intestacy rules), spouse exemption would only apply to the part of the estate which passes to the surviving spouse. This can potentially also create other technical tax issues as well which are best avoided by having properly drafted wills prepared.

    For married couples where one party is domiciled in England and Wales and the other party is domiciled in another country, there are further issues that need to be considered. The bride and groom can certainly have wills drawn up leaving their assets to each other if they wish. However, if the spouse who is domiciled in this country leaves the estate to the spouse who is domiciled elsewhere, a full spouse exemption will not be available in these circumstances. This is because the surviving spouse could potentially emigrate back to their country of origin taking all of the assets with them with the result that there would be no tax to pay in this country when the surviving spouse later dies. To offset this, the tax rules provide that where a non-domiciled spouse inherits, a limited spouse exemption is available which means that there is still the prospect of part of the estate being subject to tax. However, a non-domiciled spouse can always elect to be domiciled here after the death of the first spouse to die provided this election is made within two years of the date of death. Any assets passing to the surviving spouse would then be free of tax but the surviving spouse would then find that their own estate (whether located in England or elsewhere) would be liable to tax in this country when the surviving spouse later dies. For this reason, the position needs to be thought through very carefully where one spouse is domiciled here and one spouse is domiciled elsewhere.

    Finally, there is a completely different set of issues to be considered if the bride and groom marry each other but have perhaps been married before and may even have children from their first marriages as well. If so, and if either one of the spouses has previously been widowed, he or she may have more than one tax-free allowance of £325,000 available because their may be a transferable allowance due from their deceased spouse. If so, the wills need to be then prepared in a particular way to cater for this set of circumstances. Similarly, if the new spouses then decide to leave their assets to each other outright, this raises the issue as to what would happen if one spouse dies, the survivor inherits and then changes his or her will. This could have the effect of disinheriting the children of the spouse who has just died who may be less than happy about the prospect. Very often, wills of this nature will include a “life interest trust” which allows the surviving spouse to benefit from the income generated by the deceased spouse’s estate and also provide a guarantee of being able to continue living in the matrimonial home. The surviving spouse can enjoy these benefits for the rest of his or her life but on his or her death, the assets belonging to the first spouse to die would then automatically pass back to his or her children, thereby guaranteeing their right to inherit. The will of the surviving spouse would therefore deal with his or her assets only and would not deal with the assets of the first spouse to die.

    The rules relating to wills, marriage and tax are complex and need careful advice, especially as the circumstances become more complicated, and in almost every circumstance it is sensible to ensure that there are proper drafted wills in place so that the wishes of the married couple can be carried out and the tax position can be reviewed in the process.

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