An unmarried couples rights are not the same as a married couple, your partner can inherit from you but only if you pro-actively take steps to create a proper Will and Estate Plan. If you do not have a Will in place, the laws on intestacy will determine who will receive your estate, assets, money, and property as well as the amount each heir will receive.
Because the laws on intestacy are very specific, your money, assets, and property will go first to your surviving spouse (if you were previously married), then to your surviving children or grandchildren, parents, siblings, and/or your siblings’ children depending on who survives you.
If the laws on intestacy govern your estate plan, your partner will receive nothing because intestate succession does not include unmarried partners in their plan.
To protect your partner on your death, a Will must be put in place, and consideration given to any tax consequences.
Unmarried Couples Rights – Did you know that as an unmarried couple/cohabitee, you may face a huge inheritance tax when you inherit from your partner?
In the eyes of the Revenue, cohabitees and unmarried couples are regarded as ‘strangers in blood’ under tax law and are assigned the lowest tax-free threshold in the sum of €20,000. Any inheritance received over and above that amount will be taxed at 33%.
With proper estate planning, you and your partner can take practical steps now to assist in alleviating the financial burden of inheritance tax consequences.
One such method is by taking out a Section 72 Insurance Policy. This is a Revenue approved policy, whereby the proceeds are paid tax-free if used to pay an inheritance tax bill. This type of policy allows couples to plan for the payment of inheritance tax efficiently and in advance.
Unfortunately, many couples who would benefit from taking out a Section 72 Life Insurance Policy, are not even aware of its existence and how it can assist them.
In fact, these policies are available to anyone who wishes to safeguard their loved one from the tax consequences of inheriting in their estate.
Another option for unmarried couples is the ‘Life of Another’ Insurance Policy. Each party will take out a life insurance policy which on the life of the other and each party pays the other’s premium from their own bank account.
On the death of either or, the lump sum insured is paid tax-free to the survivor, which can then be used to discharge any inheritance tax that might arise, as well as provide a financial safety net to assist in rearing young children throughout their education and care needs.
Losing your partner is a life-changing event and one that needs proper consideration to prepare for that eventuality. To ensure they inherit your estate, you must make a Will.
The financial burden and tax consequences need not add to this painstaking event. With the assistance of your solicitor, financial advisor, and proper tax advice, you can take practical steps now to safeguard your future interest.
Speak to our expert team today by contacting McElhinney & Associates Solicitors today at (074) 9175989 or emailing admin@mcelhinneyassociates.com
*In contentious business a Solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.
**This information is for guidance purposes only. It does not constitute legal or professional advice. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. No liability is accepted by McElhinney & Associates for any action taken in reliance on the information contained herein. Any and all information is subject to change.
