Legal News | 23.04.20
Private Client Update
The importance of having a Will in place for unmarried and cohabiting couples during the Coronavirus pandemic
As is well known, the Prime Minister, Boris Johnson, recently suffered with Coronavirus and spent a period of time in intensive care. Thankfully, it appears that he is now recovering, however, if the worst had happened, it would have been important that a valid Will was in place for him, given that he is not married to his partner and they are expecting their first child together. Without a new Will, his partner would not be provided for from his estate as a matter of law.
It is essential that cohabiting couples have Wills in place to avoid their estates being subject to the intestacy rules or an out of date Will which, in some circumstances, could cause the surviving partner to be homeless. This is particularly true if there are children of the relationship; a Will also enables both partners to appoint guardians of any minor children via the Will.
For cohabiting couples, it may also be sensible to have a Cohabitation Agreement, these allow for increased financial security should the couple break up or sadly, if one were to die. These agreements can cover how the rent/mortgage is paid, how finances are managed, how assets are to be divided and what the arrangements are for the care of any children. When looking to enter into these agreements, both partners will need to seek independent legal advice and these agreements need to be in the form of a deed.
Coronavirus and Tax and Estate Planning
Due to the drastic measures the Government has had to take to provide financial assistance at this time, it is highly likely that the rules on inheritance tax and capital gains tax will be reviewed and possibly changed to increase the amount of tax brought in to the Treasury. Now might, therefore, be a good time to review your estate and tax planning to ensure you are taking advantage of the, no doubt more favourable, rules which are currently in place.
Inheritance Tax Relief for Frontline Workers
Meanwhile, the estates of doctors and nurses who die of Covid-19 will be exempt from IHT. Whilst this is only likely to affect more senior medical practitioners and/or those with valuable property, it is important to be aware of this relief as it has to be actively claimed by the executors on death.