The latest Office for National Statistics (ONS) on ‘Families and Households in the UK: 2019’ make insightful reading for the Wills community which highlights the changing trends in Brits’ living arrangements, including families.
The most interesting factors emerging from the latest Families and Households in the UK which could impact on the Wills sector are multi-family households (consisting of two or more families) is the fastest growing household type over the last two decades to 2019.
Furthermore, over the last 10 years the proportion of families containing a cohabiting couple increased from 15.3% to 18.4%.
In addition, same-sex families are up by 40% since 2015, plus the number of people living alone has increased by a fifth over the last 20 years.
Looking at the statistics, we asked professionals in the industry to give their views on how changing household composition could impact on Will making.
Emily Deane, Technical Counsel at STEP, and an experienced Trust and Estate Practitioner (TEP) commented on the latest ONS figures. She said:
“While multi-generational or multi-family living may provide cheaper living costs for clients due to combined rent and utilities, it could be costly in other ways. If you have clients who have structured their living arrangements in this way it would be prudent to provide legal advice on the family’s inheritance tax planning so that anti-avoidance laws do not trip them up later on. In particular, the Gift with reservation of benefit rules (GROB) and Pre-owned assets tax (POAT) in relation to the family home should be carefully considered. We anticipate that this kind of living arrangement will lead to a greater demand for advice around inheritance tax planning and it is essential that advisors ensure their knowledge is up to date.”
Meg Abdy, Development Director at Legacy Foresight gives her thoughts on what she thinks is the most thought-provoking stats. She said:
“According to the NOS report, in 2019 there were 212,000 same-sex families in the UK, up by 40% since 2015. The Marriage (Same Sex Couples) Act 2013 legalised same-sex marriage in England and Wales from 13 March 2014 and from 16 December 2014 in Scotland. Married couples now account for 27% of all same sex family households, compared to just 9% in 2015. According to the Citizens Advice Bureau married same sex couples have the same legal rights as other married couples when it comes to inheritance – i.e. if your spouse dies without leaving a will, you will usually inherit the home, contents, and part of the remaining estate. If your spouse does leave a will which leaves little or nothing to you, you can claim legal rights to part of the estate.
“The number of people living alone has increased by a fifth over the last 20 years, from 6.8 million in 1999 to 8.2 million in 2019. By far the fastest increase has been among people aged 45-64 – up by 55% over the past 20 years. And within that, its men living alone which accounts for most of the change (men aged 45-64 living alone has risen by 73%, while women aged 45-64 living alone is up by just 37%). The ONS believes that there are three possible reasons for this gender difference: higher proportions of men than women never marry, men tend to marry at older ages than women and marry women younger than themselves, and partnership dissolution, leading to men living alone while women may live with any children from the relationship. Whatever the reason (I suspect 1 and 3 are the most important) the number of conventional wills read where the man leaves the estate to his spouse is likely to fall over the next 20 years as these lone males reach old age.”
Eleanor Evans, partner trusts and estates administration at Hugh James Solicitors, commented. She said:
“Whilst everyone should make a will, this is particularly important for those who co-habit with their partners or live in multi-family households. The intestacy rules presently do not provide any protection for co-habitees or surviving occupants of the deceased’s property who are not the immediate beneficiaries under intestacy. This could result in surviving co-habitees or family members needing to bring claims against estates to ensure they can keep a roof over their head.
“To try and avoid the prospect of costly litigation after death, suitable wills should be put in place. Such wills may be more complex than standard single or mirror wills and may include trusts to protect the living arrangements of surviving co-habitees or other family members. By taking proper advice from a specialist lawyer, those who co-habit or live in multi-family households will be able to ensure that their loved ones are looked after in their will. People in co-habiting couples or multi-family households should also make sure they receive tax advice when making their wills, as a well-drafted will may also assist with minimising their inheritance tax bill.
Charlotte Ponder, Legal Director at Countrywide Tax & Trust Corporation Ltd added:
“It certainly means that making a Will becomes even more important! With an increase in ‘blended’ families and more people cohabiting, as an industry we need to continue to raise awareness of the importance of having a valid Will. It’s even more important for consumers to seek advice from those with expertise across the area – as part of making a Will they need to understand the implications of joint ownership of properties and bank accounts and what will happen to assets such as life assurance and pensions on death. Without this knowledge and understanding, any Will or plan they make may not be sufficient.
“We really need to start talking about it! With a huge amount of added complexity in family structures, and a rise in claims due to increasing expectations and needs of younger generations (who will not accept a legacy of an inability to get on the housing ladder) we need to keep on raising awareness of the importance of planning for the inevitable.”
Ryan Taylor, a contentious probate solicitor at Anthony Gold further adds:
“The changing nature of modern families presents new dilemmas for estate planning professionals and the courts in determining disputes that arise. The rise in numbers of cohabiting couples means that more attention needs to be paid to estate planning documents. Utilising wills to fill the gaps in coverage under the intestacy rules and advising on the inheritance tax implications of remaining unmarried are imperative to couples in this situation. This is particularly so where there is no recognition of de facto relationships here, as has developed in other common law jurisdictions.
“Blended families are an increasingly common feature of litigated estates and properties. Making will and trust mechanisms that can recognise a couple’s respective families and children are important but require careful consideration. Sound advice and planning, particularly when jointly owned property is involved, can help take care of both families when the time comes – while providing for a surviving spouse or partner.
“As we see in the law reports regularly though, the make-up of families has changed more rapidly than the law. The testator’s themselves have not in all cases kept their documentation and legal advice updated to suit their circumstances. At this point the courts are often called upon to try and resolve these planning shortfalls, usually at great expense and risk to the families and surviving partner.”
