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.
Weddings today are notoriously expensive affairs. It has been stated that the average amount spent on a UK wedding in 2024 comes to around £20,775.
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.
Our financial and legal teams 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, or basic rate tax bands, 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.”
This also takes account of any co-owned properties. Not only can this impact the financial security of the partner and family, but inheritance tax can incur again on 2nd death. Very much the family wealth destroyer.
Myths of common-law marriage
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 does not necessarily have any rights to 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 do not have automatic legal rights to their deceased partner’s assets, unless this has been outlined in their Will or unless the assets were owned jointly and pass by survivorship to the surviving partner.
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. The exception to this is jointly owned assets which pass automatically to the surviving partner, however this does not necessarily apply to all jointly owned property and legal advice should always be taken to determine how assets will pass on death.
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.
We can help you plan ahead for those crucial life events so you can focus on enjoying them. If you or somebody you care about plan on tying the knot and you want to get your finances and estate plans in order to make that happen, please don’t hesitate to speak to our team today.
Important Note
The information contained within this document is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.
This article is distributed for educational purposes only and should not be considered financial advice.
If you are unsure about the suitability or otherwise of any product or service, we recommend that you seek professional advice.
The opinions stated in this document are those of the author and do not necessarily represent the view of Progeny and should not be relied upon to make a financial decision.
Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.
Tax treatment depends upon individual circumstances and is based on current UK tax legislation, that is subject to change at any time.
The Financial Conduct Authority does not regulate will writing and some forms of estate planning.
