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Unmarried couples must consider life insurance

Date: Wed, 29 Mar 2006

Many unmarried couples are not considering the impact of inheritance tax on loved ones as well as failing to take out adequate life insurance.

Current tax laws allow married couples or civil parents the ability to inherit their partner's estate without having to pay inheritance tax. However, the same is not true of unmarried couples living together.

The government is hoping that a new campaign will encourage more unmarried couples to consider the issue, especially as house prices continue to push many estates above the inheritance tax threshold.

The Living Together Campaign being run by Advicenow.org.uk hopes to ensure that couples are aware that if an estate is worth more than £275,000, then it is subjected to a 40 per cent tax.

Antonia Murfin, cohabitation expert at Advicenow explained: "If you die leaving your partner with a bill, he or she will be liable to pay the inheritance tax bill before they receive anything, which could cause serious difficulties."

In addition, unmarried couples do not automatically inherit each other's possessions, unless a will is in place. Therefore it is vital, that such couples consider taking out a life insurance policy that would help to cover any tax bills as well as provide a sufficient level of income if the worst was to happen.


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