Unmarried couples face extra pain after a death

THE DEATH of a partner always comes as a huge blow, but the impact is even worse if it leaves you in financial disarray as well. Yet too many couples do not realise the risk until it is too late, especially the UK’s growing army of cohabiting couples.

- Harvey Jones

They have few legal and financial rights if their partner dies and could end up losing their home, as one woman discovered when her beloved partner and father of her son Theo, 10, died suddenly in May.

Michelle Tucker, 53, and long-term partner Steve Douglas lived together for 11 years but were not married when he died suddenly of atherosclerosis aged just 57. Heartbreakingly, their wedding was planned for August.

Michelle, who works in the public sector, had no idea just how many difficulties this was going to cause.

Michelle and Steve bought a house in north London in 2016 and had a different amount of shares in the property to reflect how much capital they put in. They even drew up a legal document, a Declaration of Trust, to protect themselves. “If one of us died the other person could reside in the house rent free until their death, with the respective shares distributed according to our wills,” said Michelle.

Yet even that has not spared Michelle from the alarming prospect of being forced out of her home.

TAX MESS

Inheritance tax is the villain of the piece, as it so often is. It is charged at a punitive rate of 40 per cent on assets above £325,000.

When a spouse or civil partner dies, their partner can inherit their £325,000 nil-rate threshold, plus the £175,000 main residence allowance for family homes.