If you live with your partner, you might assume your assets will automatically go to them if you die. But think again.
Under intestacy laws, cohabitees have no right to inherit – and looming inheritance tax (IHT) changes could leave grieving families with even bigger bills.
One survey by national will-writing campaign Will Aid found that most cohabiting couples are in the dark about inheritance rules, with many at risk of being cut out of their partner’s estate entirely.
A will is a legal document that specifies how a person’s property, money, and possessions should be distributed after their death.
If you die without a valid will, it is known as “dying intestate”. When this happens, your assets will be distributed according to the “rules of intestacy”.
What are the rules of intestacy?
The Will Aid survey found that 68 per cent of cohabitees don’t understand the rules of intestacy. Under these rules, unmarried partners – even those who have lived as a couple for years or have children together – are not automatically entitled to inherit.
The survey found that 25 per cent of cohabitees mistakenly believed their estate would automatically go to their partner when they died – and 17 per cent acknowledged they had never even thought about it.
Trusha Velji, solicitor at Touch Solicitors, warned: “Many people assume that after living together for a period of time, they automatically become common law husband and wife, but this is not the case.
“The concept of ‘common law marriage’ ceased to exist a very long time ago.”
Who will inherit?
If you die intestate, and are not married or in civil partnership, any children you have will inherit everything.
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If you’re unmarried and childfree, your estate typically passes to your parents or siblings. If they have passed away, it will pass to your siblings’ children.
These rules mean that unmarried or cohabiting partners should make a will if they want their partner to inherit from them.
“If you are cohabiting as a couple, the law does not recognise you as spouses, even if you have children together and have lived together for many years,” says Velji, “Therefore, if you do not have a will, the rules of intestacy will apply and your partner will be completely disregarded.”
What is the IHT spousal exemption?
Those living together should also consider their tax position when planning for the future. Leaving assets to an unmarried partner in your will doesn’t mean they will benefit from the same IHT exemptions married couples enjoy.
The IHT threshold (also called the nil-rate band) is the amount of an estate you can pass on before IHT is charged. The standard IHT threshold is £325,000 per person (for the 2025/26 tax year). Estates above this amount are taxed at 40 per cent on the portion exceeding the threshold.
Assets left to a spouse or civil partner are usually exempt from IHT, and any unused portion of their threshold can be transferred to the surviving partner, effectively doubling the threshold to £650,000 for a couple.
If the family home is left to direct descendants (such as children or grandchildren), there is an additional threshold of up to £175,000 per person, bringing the potential total to £500,000 per person (£1m per couple).
But unlike married couples or civil partners, cohabitees don’t benefit from the IHT spousal exemption. This means any inheritance left to them may be subject to IHT if the estate exceeds the tax-free threshold.
New pension IHT rules
The financial risk of cohabiting is set to rise from April 2027. In the Autumn Budget, Chancellor Rachel Reeves announced that the rules about pensions and IHT will change from this date.
Currently, defined contribution pensions, where you build up a pot of money to give you an income when you retire, don’t normally form part of your estate and so are not subject to IHT. But from April 2027, pension savings will count towards a person’s estate for IHT purposes.
Calculations from wealth manager Quilter show if a working-age legally-single homeowner in England with an average-priced home (£290,395) and a pension pot of £415,000 died, their beneficiaries would pay £82,158 in IHT from 2027. Under current rules, they would pay nothing.
Many cohabiting couples own property jointly as joint tenants. In this situation, only half the value of the property would count toward the estate. Even then, the family in the above example would face an IHT bill of £24,079.
Jon Greer, head of retirement policy at Quilter, said: “Charging inheritance tax on a pension someone could not access is optically terrible for the government. It is even more unjust for cohabiting families, who have no spousal relief or transferable allowances. Policymakers should consider carve-outs or transitional reliefs for working-age deaths, particularly when young children are involved. Without change, this policy risks compounding the emotional toll of bereavement with a financial hit.”
How to write a will
You can write a will through a solicitor or an online will-writing service.
Alternatively, Will Aid is an annual fundraising campaign where participating solicitors offer to write a basic will in exchange for a voluntary donation to one of the campaign’s eight partner charities which include Age UK, NSPCC, Shelter, and Crisis.
Peter de Vena Franks, Will Aid campaign director, said: “It’s a chance for unmarried and cohabiting couples to ensure their wishes are clearly documented. Without a will, surviving partners are left vulnerable. Will Aid gives peace of mind that loved ones are protected.”
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