Unmarried and cohabiting with children of your own?

Published by Sophie Fillmore on 2019 11 26

Unmarried and cohabiting with children of your own?

The modern structure of families means that more and more unmarried couples are co-habiting with each partner bringing children from a previous relationship. If this sounds familiar, you should need to consider what happens if you or your partner dies, as what you think may or should happen may not come to pass.

If we start with the basics.  There is no such thing as “common law marriage” so you will need a Will and a plan.  Let’s assume that the Will leaves your assets to your children.

Let’s also assume that you and your partner buy a house together as Tenants in Common. This means that you can Will YOUR half of the house to YOUR children.  So far so good.  You take out joint life cover so that if either of you die the life cover pays out to the survivor, the mortgage is cleared by the surviving partner and your children inherit with no mortgage. 

But what happens if you die simultaneously say in a car crash?  In this scenario the youngest partner is deemed to have died last.  This means that the life cover will pay out to the estate of the youngest partner and their children receive the entire pay out of the life assurance.  The house would be sold and they would also receive half the proceeds of the house (after the mortgage is cleared by the sale of the house). This was probably not in the plan and possibly not even considered as an outcome.

The solution is to put the joint life policy in a Survivorship Trust. A Survivorship Trust is structured so that the life assurance is only paid out if the partner survives for 28 days after the death of the first life assured.  If both die simultaneously the life assurance is paid into the Trust and not to the estate of the youngest person. The Trust will then pay out to the nominated beneficiaries which can be your children in equal proportions.

Simple solutions are available.  Come and talk to one of the experts at KDW and make sure what you want to happen, happens.

01727 85 22 99 | help@kdw.co.uk