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Unmarried couples are being warned they could be set for an inheritance nightmare, due to a “common law” myth. Perhaps most importantly is the rule that states there is normally no inheritance tax to pay if a person leaves everything above the threshold to their spouse or civil partner.

However, this is not extended to those who have been in a relationship but not married – even if they have cohabited for years.

The same goes for the issue of inheritance itself, as a person will not be able to automatically inherit on the death of their partner.

This is known as the “common law myth”, lawyers have warned, with many unmarried couples believing they have the same rights are married couples.

Therefore, many do not realise they have to actively make a claim for inheritance when their partner passes away. 

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Claire Chisnall, Solicitor at Stowe Family Law, said: “Our survey results have highlighted that there is still a belief that if you have been in a cohabiting relationship, specifically over a long period, you would have the same legal rights as if you had been married.

“This is a myth and has no legal basis.

“It leads to many cohabiting couples thinking they don’t need to look at alternative ways of financially protecting themselves, when in fact they do.”

Ms Chisnall suggested individuals may wish to consider a cohabitation agreement.

This allows couples to set out their intentions when they first move in together and would cover what would happen to any property if they separated.

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Having a water-tight agreement is likely to help later down the line if disagreements occur.

Ms Chisnall continued: “These agreements can be persuasive in disputes over property in the future if they are prepared properly.

“It may help in an inheritance act claim in the event of the death of one party, if the agreement clearly sets out what the intentions of the parties were in life, and the financial provisions available to them.”

However, if a person wants to make sure their wishes are carried out in the event of their death, a Will is considered the best way to do so.

A Last Will and Testament clearly lays out a person’s desires for what happens after they have passed away.

This is particularly important for cohabiting couples, as they do not have the same rights in life or death as married couples. 

Ms Chisnall explains without a Will in place, a cohabitee would be able to claim under the Inheritance Act 1975.

This would be possible if they have been in a relationship for at least two years up to the point of their partner’s death, and they were living in the same household as if they were a married couple.

These claims, however, are complicated and can be expensive to progress.

Consequently, any outcome is extremely difficult to predict, and Britons may be unnerved by this uncertainty.

Ms Chisnall highlighted change is unlikely to happen soon regarding cohabitation.

As a result, she urged cohabiting couples to take steps to protect themselves financially.