Don't Let Love Cost You: Mastering Estate Planning for Unmarried Couples

Don't Let Love Cost You: Mastering Estate Planning for Unmarried Couples
Photo by Zoriana Stakhniv / Unsplash

Love knows no boundaries, but when it comes to protecting your loved ones, legal boundaries do matter. If you're an unmarried couple, ensuring the financial security of your partner after your passing is vital. Let's dive into the world of estate planning for unmarried couples, discover the ins and outs of inheritance tax, and find ways to minimise its impact.

Securing the Future for Unmarried Couples:

Marriage isn't the only way to show commitment. If you choose to live together without tying the knot, it's essential to understand your legal position. Don't assume that the same rules that apply to married couples automatically protect you as a cohabiting couple. Take charge of your future by exploring estate planning options.

Inheritance Tax Considerations:

In the UK, each person has an inheritance tax nil rate band of £325,000. When one partner dies, this threshold applies to their estate. Anything above it is taxed at a whopping 40%. Yes, even if you leave everything to your partner in your will, they may still have to pay. Ouch!

Married couples and civil partners have an advantage. The first partner's estate passes tax-free to the surviving spouse or partner, leaving their nil rate band untouched. When the second partner passes away, the combined nil rate bands can result in significant tax savings. But as an unmarried couple, you need to take extra steps to protect yourselves.

Mitigating Inheritance Tax Liability:

Don't let the taxman take a big bite out of your legacy. Seek professional advice tailored to your circumstances. Experts can guide you on sensible inheritance tax planning measures. Creating wills that mirror each other ensures your assets go where you want them to. Plus, it's essential to provide for your partner financially. Together, you can minimise the inheritance tax burden.

Plan Ahead if You're Getting Married:

If you've decided to get married, congratulations! But don't forget that marriage revokes any existing wills. Make sure your wishes are still honoured by updating your wills after the big day. If you're planning to create wills before the wedding, consult an expert to ensure they remain valid.

Love is beautiful, but protecting your partner's future is an act of true devotion. Take action now to secure your loved ones' financial well-being. Seek expert advice, tailor your estate planning to your situation, and don't let inheritance tax spoil the legacy you want to leave behind. Together, you can build a secure future for the ones you cherish most.