Modern marriage

Modern marriage

Studies show that since the 1970s, we’ve been marrying later in our lives. More than half of Millennials are not married, which is around 40% less than the Silent Generation and 20% less than Baby boomers at the same age.

Today’s weddings are notoriously expensive affairs. In 2021 the average amount of money spent on the couple’s big day in the UK was £24,000 – around the average annual salary for young adults.

But, before anyone turns their back on marriage, there are some very practical benefits that anyone debating whether or not to tie the knot should consider.

We asked our financial and legal teams to share their insights on the topic.

What’s mine is yours? Inheritance and tax

For many young adults today, getting onto the property ladder and building up their savings and assets are their key priorities. However, as they increase their savings and wealth and their assets grow in value, being married could potentially work in their favour.

Chartered Financial Planner Victoria Ross explains: “When you’re moving assets between each spouse for tax efficiency, such as using Capital Gains allowances, being married can be beneficial.”

There is no Capital Gains Tax between spouses, and this can help mitigate the tax burden.

Furthermore, married couples (and couples in a civil partnership) benefit from Inheritance Tax (IHT) reliefs on death. Transfers between married couples and civil partners are not usually subject to IHT, so if the first partner to die leaves their entire estate to the other, no tax will be payable.

Senior Solicitor, Rebecca Best, confirms: “Assets inherited by a spouse on death are free of Inheritance Tax, whereas non-married couples, no matter how long they have been together, do not get this exemption and will be subject to a nil-rate band allowance. This means that inheritance tax might be payable if they leave everything to each other on death.”

Myths of common-law marriage

Additionally, many people still believe that cohabiting as a modern, unmarried couple with a mortgage and a family will be enough to secure the rights to each other’s assets upon death, but this isn’t the case.

Victoria Ross comments: “In the case of an unmarried/civil partnership couple, their partner has no rights to any of a deceased partners estate even if they live together and have children.

“The notion of common law marriage (that if you have lived together a significant time you have the same legal rights as the marriage) is still quite ingrained in society but is very much a myth, whether you have children or not.”

Will power

Unmarried couples have no legal rights to their deceased partner’s assets, unless this has been outlined in their will.

Cohabiting couples who choose to remain unmarried can draft their wills to stipulate what they want the other to receive. This can allow them to provide inheritance for their children if they have them, while also making sure the surviving partner is provided for.

Dying intestate

While it is always advisable to make a will, regardless of your marital status, when someone dies without a will – dying ‘intestate’ – there are different rules regarding who can inherit their estate depending on whether they were married or not.

Married partners without a will would inherit from each other under the intestacy rules on death, whereas when an unmarried/non civil partner dies intestate the surviving partner receives nothing at all under the intestacy rules.

Also on the topic, Chartered Legal Executive, Georgia Samardzija, adds: “If someone is making a claim that a deceased person has not reasonably provided for them under their Will/intestacy, spouses are treated more favourably in terms of the relief they may be granted.”

Weighing it up

There are many factors to consider when weighing up the pros and cons of marriage in the modern world.

While the debate often centres around the cost of the wedding day or the changing attitudes of successive generations to marriage as an institution, it’s important to remember the practical financial and legal considerations that are too often overlooked.

This article is distributed for educational purposes and should not be considered investment advice or an offer of any security for sale. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.

Past performance is not indicative of future results and the value of investments can fall as well as rise. No representation is made that the stated results will be replicated.

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