Cancer Diagnosis - advice on entering marriage or Civil partnership - pros & cons

wimbleQ

Hello

Hope we can gather some thoughts, advice, help from this forum on life planning after a cancer diagnosis.

We are a couple, been together for 8 years, unmarried.  Both in our 50s.

My partner was diagnosed with cancer.  Treatment has given him the all clear for now, but this is a type of cancer which can come back within 5 years and so the future is uncertain. 

We are trying to make future plans for the best and hoping for advice on pros and cons of either marrying now or entering into a civil partnership (CP).  We completely love and trust one another and aren't interested in getting married or entering a CP for any other than practical, legal and financial reasons.

There are a couple of reasons for wanting to do this - main one is there would be an enhanced pension payment payable to a widow on his death.  I don't want or need this money and our intention is that I would pass this directly to his daughter to help with her upbringing and possible university costs later.  Unless we are married or in a civil partnership, this extra pension wouldn't be paid to me on his death, so would be money lost. 

Here is background info.

• Both financially independent of each other (separate houses, accounts, savings, bills etc)
• Each own our own properties and we share living between the two properties (mortgage paid off, each property in each sole name).
• We would want to continue owning and living at our individual properties - but we live between them some weeks/weekends. In retirement the plan has always been to sell up and buy together.  But there is some uncertainty around this after the diagnosis.  Right now it's more convenient for our employment that we stay in each house for travel reasons.
• Both working full time currently.
• Partner has one daughter (age 13 years) and he is divorced.  He and ex-wife share care & costs of the daughter, mostly amicably.  I have no children.

Concerns about what we each own now and what happens when we die if married/in a CP

• What effect would there be on our tax positions now or after death of one of us?  We both pay PAYE - think I'm basic rate and partner may be higher rate on small part of his salary. I also have a separate rental property, but may be selling this.
• If I were to receive a widow's pension on his death, I guess that would be taxed and I would pass on the net £ to his daughter.  Any pros and cons of this?  I guess it could affect any benefit entitlement I had should I need benefits in older age?  Would it result in any less of my own private pensions or state pension being paid to me because I would be receiving this private widow's pension from my partner?
• Partner wants to leave everything on his death to daughter as I am independent of him with own house and savings. We are both happy with this. 
• I want to leave everything on my death to my nieces (apart from agreed provision I'd like to make to Partner).
• So we don't want the "effect" of entering a marriage or civil partnership to mean that our money/property passes to each other.  (My understanding is we can arrange this by making Wills to this effect after marriage/civil partnership - would these be valid in practice?)
• My partner does have an ex-wife and so she would have concerns about any marriage/CP affecting daughter's inheritance if he dies first.  Equally, I would want to ensure that should I die before him, anything I own goes to my nieces - not to partner and then if something happens to him, to his daughter/ex-wife.  (If I die first, I am making gifts to him naturally, but the majority would go to my nieces). Again, we are both happy with this arrangement.

There are so many things we don't know about any unintended consequences which might "kick-in" automatically by law if we marry or enter a CP.

Also thoughts about "next of kin" rights to speak to GPs, hospitals etc.

Please can anyone advise on pros and cons for our circumstances of either getting married or entering into a CP?

Which is cheaper, faster and administratively easier - getting married or entering into a CP? (I know this sounds "cold" but we are completely happy in our partnership and only considering marriage/CP if it can financially assist his daughter with the enhanced pension and if it can provide any other benefits to us in our relationship now or in the future.

We completely love and trust each other as is and don't want/need marriage or a CP for any other reason.

Are we right that the validity of a marriage or CP would not be affected by the fact we would continue to live separately/share two homes for now?

If anyone has any thoughts about pros and cons and any wider implications we've not yet thought about, this would be very helpful.

Many thanks in advance.

wimbleQ

Sorry, I forgot to say, on a purely practical point - I don't want to change my surname - will that be okay?  Would it be necessary to inform status change from "single" to "married or in a CP" with banks, pension companies, insurance (car/home), Inland Revenue (I do a self assessment for rental income) any other things I haven't thought about?  Would be a pain to have to do this unless legally necessary?  We will still be maintaining our accounts independently and not having joint accounts. 

Many thanks. 

DullGreyGuy

What pensions do you both have? Presumably nether of you are drawing any pensions?

Pensions and IHT are the normal considerations but for the later that is really for those wanting to leave things to their spouse. DB pension schemes have rules about who gets what and these sit outside of the estate of the deceased. Typically they payout to either the spouse at date of retirement or date of death (plenty angry people realising their ex rather than current spouse will get their pension if its the former). If there is no spouse, no children or no children provision then a DB pension is simply lost (the funds are used to pay those that live much longer than anticipated). So if you were in a DB scheme there would probably be a benefit to your partner as your nieces wouldn't get anything irrespective if you are married or not. 

If you didnt marry and he had a DB pension it may payout to his daughter until her 21st birthday if she stays in full-time education whereas were you to marry it would payout to you until your death. You'd be guessing which is likely to be longer. 

If you were to receive the spousal benefit you naturally would be free to gift the net money to whoever you want however for tax, benefits, care etc it would be considered your income. It wouldn't impact other private pensions you have. 

The main "unintended consequences" is it invalidates any existing wills unless there is explicit clause in the will to state it survives your marriage. 


PS. when I state marriage that includes civil partnership, its just too painful to state both each time (and personally think CP should go now that we have legalised gay marriage)

Keep_pedalling

If you are planning to leave each other a part of your estate in your wills then being married or in a CP carries the advantage is that anything left to a spouse or CP is covered by spousal exemption so could potentially avoid a nasty IHT bill on the first death. If you do this you will also need to make new wills.

One downside is that you will only be able to have one primary residence so down the line there may be a CGT liability if you sell the non primary residence property. 

TonyMMM

Generally in financial terms ( inheritance tax transfer/thresholds, pension rights etc) it makes a lot of sense to be married or CP when planning for the future/estates. For unmarried couples it means that well written, and thought out, wills are essential - but they can't change some of the financial disadvantages of being unmarried partners. Are those already in place ?

For pensions - you need to check the rules of whatever scheme is involved about nominating beneficiaries, widow(er)s rights, whether unmarried partners are recognised etc.

On a practical note, there is no legal difference between marriage and CP (in the UK), and one is not quicker than the other. Living together or apart is irrelevant.

Marriage (or CP) does not automatically change your surname, and never has, it is purely an historic convention - that is a choice you make or don't make. You can use whatever surnames you like (married or unmarried) - change one, keep separate, double barrel them, or even create a completely new one if you wish.

Next of kin has no legal definition in the UK - if your partner was in hospital for example, he can nominate whoever he wishes as his NoK. 

bunnygo

law in England has never changed anyone's surname on marriage. That's why those that want to do it have to go through lots of admin to make it happen. Do nothing, nothing changes.

DullGreyGuy

TonyMMM said:

For pensions - you need to check the rules of whatever scheme is involved about nominating beneficiaries, widow(er)s rights, whether unmarried partners are recognised etc.

On a practical note, there is no legal difference between marriage and CP (in the UK), and one is not quicker than the other. Living together or apart is irrelevant.

Generally unmarried partners have to have been living "like a married couple" for 2 years, its not fully clear if they are spending 7 days a week living together or spending most nights seperately and occasionally one stays over with the other.  The later is likely to fail the basic tests I've seen applied in these cases. 

I did note one minor difference @tonymmm, though it may not be "practical" but you cannot cite adultery as the reason for ending a civil partnership whereas you can for a divorce... you'd put it as unreasonable behaviour and list being unfaithful as an example. Legal definition of adultery only applies to married couples. 

unforeseen

On a side note, depending on the cancer, recurrence can be successfully treated. I have had bladder cancer twice in the last 5 years and am currently clear again.

Malthusian

DullGreyGuy said:

I did note one minor difference @tonymmm, though it may not be "practical" but you cannot cite adultery as the reason for ending a civil partnership whereas you can for a divorce... you'd put it as unreasonable behaviour and list being unfaithful as an example. Legal definition of adultery only applies to married couples. 

If the OP is in England or Wales that is a non-issue, thanks to no-fault divorces being introduced in 2022. 

theoretica

For right to talk to hospitals, get LPA in place if you haven't already.

There is a complication for married couples around owning separate houses - for council tax and maybe stamp duty the couple can only have one principal residence between them.

Will his estate exceed the inheritance tax levels if left to his daughter?

elsien

There is no such thing as “Next of kin rights.”
it is very simply an information sharing mechanism because hospitals do like having a name of someone to talk to. And also helpful if you want to make clear the person that you would most like them to keep updated or talk to if necessary. 
But if someone has capacity they make medical and health decisions themselves;  if they lack capacity and there is no power of attorney a best interest decision is made by the relevant professional in consultation with friends and family. Hospitals will quote next of kin, and to them this tends to be a blood relative although that’s not what the law says. And no family member can make decisions without that legal authority although there can be that presumption that NOK confers some sort of authority when it doesn't.

I would suggest doing a power-of-attorney anyway for both of you, because the  time to do it is when you are well. 

Your partner might also want to consider making an advanced statement, otherwise known as a living will, which sets out any health treatments he may or may not want in the future, if he’s not able to speak for himself. 

Health and welfare Power of attorney only kicks in when someone loses capacity. The finance one can be handy if someone is still mentally able but, for example, physically frail and just not able to get out and about themselves. If set up initially to work that way.