Laws in the UK permitting civil partnerships bring with them the painful but unavoidable issue of planning in the event of a spouse's death. Law firm Lane-Smith & Shindler examines the issues.

Imagine unexpectedly losing a partner and then finding that you have no entitlement to the home you shared for many years.  It is a frightening prospect. Many LGBT (lesbian, gay, bisexual and transgender) couples are potentially putting themselves in just such a position. Yet, such a predicament is quite avoidable. 

Paul Davies, a partner at specialist wills, trusts and inheritance tax practice Lane-Smith & Shindler simply explains the legal issues and what actions need to be considered to fully protect surviving partners and loved ones.

The popularity of civil partnerships is on the wane. 

The initial enthusiasm provided by legal recognition for gay couples enshrined in the Civil Partnership Act 2004 has declined from over 16,106 registrations in 2006 to 8,728 in 2007; in 2009 the numbers fell further to 6,281.  At the same time the number of dissolutions, according to The Office of National Statistics, the UK official data organisation, has been increasing markedly: in 2009, 351 partnerships were dissolved; in 2007 it was a mere 41.

Civil partnerships afford the same protection as straight married couples enjoy, so the current trend has real implications for the gay community. But even if civil partnerships were on the rise, it would still leave many lesbian, gay, bisexual or transgender couples in a vulnerable position should the worst happen because of their failure to make a will or to register their relationship under a civil partnership.

In addition, there are still those who believe that long-term (unregistered) partnerships have some recognition in law. On the whole, they are mistaken.

It is wills that offer the best financial protection. Yet up to 70 per cent of the general adult population do not have a will, according to The Society of Will Writers. I have no reason to believe such figures are not reflected in the gay community.

It will not come as a shock after I have put forward these facts, if I say do not put off your estate planning until tomorrow. Like all legal professionals I will say that your will is probably the most important document you will ever sign.

The essential things you need to know – and to do

The key piece of advice is to have a current, up-to-date will that reflects your wishes, whatever your circumstances.

If you have not registered as civil partners, and do not have a will, your partner has no-rights to your estate on your death. Likewise, you will have no claim on your partner’s estate.  Even the act of remembrance, such as arranging the funeral in accordance with you and your partner’s wish could be given to the deceased person’s family – potentially a highly stressful situation. 

Even if you have become registered as civil partners, it is highly advisable to have a will: the intestacy law states that the surviving partner can receive up to £200,000 of the estate. The remainder will be divided between the surviving partner and other family members of the deceased. This might leave the surviving partner in a difficult position. Conversely, it might mean other family members will get less than you would have liked.

Please note that if you do become registered civil partners any previously made will is revoked (just as for marriage) unless the will was made specifically in contemplation of the civil partnership being formed.  It is advisable to write a new will as soon as possible after registering your relationship.

Same sex partnerships

Entering into a civil partnership is a big step.  But in terms of financial well being it is worth considering that same-sex partners do not have the same rights as civil partners. The legal protection in the event of a passing can be limited.

It is possible to go to court to make a case that the surviving partner was dependent on the deceased partner and that provision should be made.  However showing that this is the case in court can turn into a costly and stressful legal battle, with no guarantee of success and all for an issue that could have been avoided with an up-to-date will. Hindsight is a wonderful thing, and not something you want to be engaged in.

Same sex partnerships and property

The most important and valuable asset that will be affected by a death will usually be property. If a long-term partner is not protected by a will, then it is quite conceivable that the surviving partner will be without a roof over his or her head. It is the last situation anyone wants to be facing at a difficult time.

Many same sex couples have joint ownership over the property they live in. However this may not offer the protection it would seem to on the surface. Property that is jointly owned is owned either as “joint tenants” or as “tenants in common”.

As joint tenants the surviving partner, as the joint owner, will automatically inherit the property. However, if the joint owners are “tenants in common”, the deceased partner’s share of the property will form part of their estate. If they have not made a will, their share of the property will pass to their relatives: same sex partners will not be included.

It is worth noting that joint tenancy status is not irrevocable. Either of the joint owners can turn the joint tenancy into a tenancy in common by giving a "notice of severance" to that effect. 

A note about being north of the border

The issues outlined above are with reference to the law in England and Wales. Scottish law has certain provisions that differ from what is outlined above and should be investigated accordingly. However, the need to make a will is an issue that should concern everyone.

Changes in circumstances

If your situation changes, maybe you decide to live abroad with your partner, you will need to re-examine your legal arrangements. Unlike marriage, a civil partnership registered in one country will not generally be recognised in another country.

If your civil partnership is dissolved, any will you made prior to dissolution will remain valid, but your civil partner will be deemed to have died and will not therefore benefit. You should nevertheless review your will to ensure it remains appropriate.

Concluding remarks

The key message about estate planning is that last word – “planning”. Anyone who has not done so, or not considered it for a long time, needs to prepare for situations that none of us wish to contemplate: do not put it off.

Paul Davies is a partner at Lane-Smith & Shindler and can be contacted for an informal discussion at pdavies@lanesmithshindler.com or directly on 0161 245 11 31