Are there any benifits from being married (from a tax /financial point of view)

swinster

Hi all,

My partner an I have been living together for several years (currently unmarried) and we are just about to re-mortgage. At this time, I will have my name put onto the deeds (probably as joint tenants) and we have Wills to leave our estate to the other (no dependants).

I work full time (approx £30k pa) and she part time (approx £12k pa). At the moment we pay tax, NI as single people.

Am I right in thinking that there there is absolutely no benefit from being married (from a tax or financial point of view) apart from the lack of inheritance tax to a surviving partner as the estate passes to the other (although neither of us will break the inheritance tax limits).

getmore4less

Transferable IHT nill rate band.

The transition from IHT not being a problem to becoming one can happen quite quickly.

zzzLazyDaisy

If you have a pension through your employer with a death in service benefit, remember to nominate your partner as she will not automatically get a widow's pension as you are not married.

Apart from that - the main areas are not financial but practical/emotional.

Things like if one of you dies, the other will not be the next of kin, so the family could step in and organise the funeral against his/her wishes. Similarly in the event of one being in hospital and decisions needing to be made, the partner would not be the next of kin (unless specifically stated to be in the hospital file). One way to address these issues would be to discuss the situation with both sets of 'in-laws' and make your wishes known should such an occasion arise. You can of course also include a clause in your wills re funeral arrangements.

swinster

zzzLazyDaisy wrote: »

If you have a pension through your employer with a death in service benefit, remember to nominate your partner as she will not automatically get a widow's pension as you are not married.

Done this.

zzzLazyDaisy wrote: »

Apart from that - the main areas are not financial but practical/emotional.

Hmm, tell me about it

zzzLazyDaisy wrote: »

Things like if one of you dies, the other will not be the next of kin, so the family could step in and organise the funeral against his/her wishes. Similarly in the event of one being in hospital and decisions needing to be made, the partner would not be the next of kin (unless specifically stated to be in the hospital file). One way to address these issues would be to discuss the situation with both sets of 'in-laws' and make your wishes known should such an occasion arise. You can of course also include a clause in your wills re funeral arrangements.

Have written will to this effect, but as always we could do with updating them as you think of other things. As they arer simple Wills, we have used a free will template, which should suffice.

zzzLazyDaisy

swinster wrote: »

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Have written will to this effect, but as always we could do with updating them as you think of other things. As they arer simple Wills, we have used a free will template, which should suffice.

As a solicitor I always feel a sinking feeling when someone says they have used a will template, as things are often left out.

One important thing is what do you want to happen if you both die at the same time (in a car accident, for example). If you are leaving everything to each other, you need to say something like 'but if [name] shall predecease me then [insert alternative bequest].

For the same reason, it is convention to say that your estate will only go to your wife if she survives you by (say) 28 days - and vice versa. The reason is that it is extremely unlikely that both would die at exactly the same time. In a car accident for example, it is quite possible for both to be taken to hospital and for one to die within hours and the other to hang on for a few days or weeks before dying. In that case the money will have passed under the will to the other person, and will then go to whoever is named in their will (or under their intestacy if no-one else is named).

If you both have families who you might wish to benefit, then you can each put the same people in your will - so you might say 'but if x should predecease me then the residue shall be divided equally between X. Y. and Z.)'

If I think of anything else I will let you know. But it is ages since I did any wills, so if you dont want to go and see a solicitor (which would be my best advice) at least get a book from amazon and read it carefully to make sure you have covered everything.

swinster

zzzLazyDaisy wrote: »

As a solicitor I always feel a sinking feeling when someone says they have used a will template, as things are often left out.

One important thing is what do you want to happen if you both die at the same time (in a car accident, for example). If you are leaving everything to each other, you need to say something like 'but if [name] shall predecease me then [insert alternative bequest].

For the same reason, it is convention to say that your estate will only go to your wife if she survives you by (say) 28 days - and vice versa. The reason is that it is extremely unlikely that both would die at exactly the same time. In a car accident for example, it is quite possible for both to be taken to hospital and for one to die within hours and the other to hang on for a few days or weeks before dying. In that case the money will have passed under the will to the other person, and will then go to whoever is named in their will (or under their intestacy if no-one else is named).

If you both have families who you might wish to benefit, then you can each put the same people in your will - so you might say 'but if x should predecease me then the residue shall be divided equally between X. Y. and Z.)'

If I think of anything else I will let you know. But it is ages since I did any wills, so if you dont want to go and see a solicitor (which would be my best advice) at least get a book from amazon and read it carefully to make sure you have covered everything.

Actually, I believe we have taken care of this as well. We both have the same wording in that a proportion goes to blood ties on her side and a proportion goes to blood ties on mine. So pretty much what you have outlined.

As a conman man, its not that I distrust solicitors, I just have never seen anything that a solicitor does and can end up costing a large amount of money that isn't basically common sense and bit of background reading.

I'm a bit miffed that I have got to pay over £300 to the solicitors at the moment in order to get my name added to the deeds of the house. Again, I suspect that this is a relatively simple task.

Chris

Pennywise

You'll find that as you go through life, the tax pros and cons of marriage will change according to your circumstances.

Married couples can transfer assets (including property shares and business shares) free of tax to maximise tax allowance usage and minimise higher rate tax exposure. As unmarried, you'd have to transfer at current market value potentially triggering capital gains tax.

You certainly need to take professional tax advice before embarking on owning another property (i.e. a buy to let or letting out your existing house and buying another) or starting a business.

I'd echo the advice about getting a professional will drawn up. I've been an accountant for 30 years and seen some VERY nasty situations arise from amateur wills and no wills - all too easily a person's estate can end up where the deceased wouldn't want it - typically like the previous poster, when "mirror wills" are drawn up without any provision for both people dieing. My OH and I have probably gone over the top, but we've got a lot of provisions for virtually every permutation of us dieing before/after/close to our beneficiaries dieing so that we know exactly where our estate ends up in virtually all foreseeable circumstances - quite a long will, but it still only cost a couple of hundred for both of us done by a solicitor and we have peace of mind of knowing exactly where our money goes and a pecking order of who looks after our son which is most important to us.

Also, if you were thinking about having children together, then you really need to think about marriage to protect the child from a legal point of view.

Whilst you have relatively small estates and no children, then fair enough, marriage or not may not be an issue, but certainly as estates start to grow in value and children are on the horizon, then the marriage or not question becomes a lot more relevant. Don't forget that "common law" marriages have no legal status so in case of incapacity or death, it's your closest relatives that get first say rather than your partner!

swinster

Many thanks for your comments. Given our current status I think we have covered what we need to have covered for the time being. Should anything change, then we can re-evaluate.

The idea of marriage simply doesn't appeal to either of us. We would be doing it purely for a convenience/tax type thing. If the conservative government bring back the marriage tax allowance then this may well be the time to re-evaluate. I wonder if there is any way to recognise a marriage that is not bound by a specific faith or religion?

Of course, a solicitors Will is by no means fool proof. I have recently been a beneficiary to an estate for which the will was drawn up by a solicitor, yet it was still contested by other parties and from what I gathered talking to the individual prior to them departing, it may not have been what the really meant. Still what was written was written, and abiding by that is what we had to do.

getmore4less

When it comes to death wishes no one in the process checks the contents of a will or if the people making the arrangements are the ones the deceased wanted to deal with it.


Actually, I believe we have taken care of this as well. We both have the same wording in that a proportion goes to blood ties on her side and a proportion goes to blood ties on mine. So pretty much what you have outlined.

Interested in the exact wording to look for unintended consiquences

zzzLazyDaisy

swinster wrote: »

I wonder if there is any way to recognise a marriage that is not bound by a specific faith or religion?

I am sorry, I don't really understand what you mean? Isn't that what registry office weddings are for?

swinster

zzzLazyDaisy wrote: »

I am sorry, I don't really understand what you mean? Isn't that what registry office weddings are for?

Er not exactly. Your still bound by God etc etc. But even so, it the whole institution that sits behind marriage that concerens us. We are happy as we are, but we are tied to each both emotionally and financially. Yet neither of us wants a peice of paper that seems to change everything. Its just our personal choice for our relationship. Yet to all in tense and purpose to the outer world we are a married couple.

Maybe there is no way to truly explain this if you don't understand or have the same ideas of feeling about this.