Estate planning considerations for LGBTQ+ individuals

Ryan Taylor, Partner in our Private Wealth Disputes team in London, takes a look at wills and estate planning considerations for the LGBTQ+ community.

Estate planning serves to protect personal wishes, preserve financial stability, and ensure loved ones are provided for. While this is important for everyone, certain aspects can present unique challenges for LGBTQ+ individuals. This is because LGBTQ+ family structures may not align with legal norms, and relationships may lack formal recognition under the law.

Figures show that over two-thirds of same-sex couples are neither married nor in civil partnerships, compared to fewer than a quarter of opposite-sex couples. Further, a 2023 survey by Just Like Us reported that 46% of LGBT+ young adults aged 18 to 25 were no longer in contact with one or more family members. These realities make proactive estate planning essential to avoid unintended and potentially distressing outcomes.

The risks of dying without a will

When someone dies without a valid will, their estate is distributed in line with the statutory intestacy rules. These rules give priority to legally recognised family members starting with spouses or civil partners, and then children, parents and siblings, and then on to more distant relatives.

Unmarried partners have no automatic entitlement to inherit under these rules, regardless of the strength or length of the relationship. This can leave surviving partners in a vulnerable position, particularly where the deceased had strained or distant relationships with their legal next of kin.

A will really is an important document for every adult to have, and yet at least half of adults in the UK do not have a will in place.

A will provides clarity. It enables individuals to decide who should benefit from their estate and to leave directions for matters such as funeral arrangements and guardianship of children. It also appoints trusted parties to administer the estate as executors. Without a will, those left behind may face not only legal hurdles but emotional distress, dealing with inheritances that do not reflect their late loved one’s wishes.

Understanding property ownership and succession rights

The legal structure of property ownership has significant implications for succession. Joint owners in England and Wales typically hold property either as joint tenants or as tenants in common.

Joint tenants each own the entire property collectively, and on death, the surviving owner automatically inherits the other’s share. In contrast, tenants in common each own a distinct share of the property, which forms part of their estate and passes under the terms of their will or intestacy rules.

In practise, some couples may not realise how their property is held. One such case I have worked on involved a same-sex couple who purchased their home as tenants in common and did not make wills. After one partner died, the survivor had to engage in complex and costly negotiations with relatives to recover the other half of their property. This could have been avoided with early legal advice and careful planning.

Reviewing joint accounts and investment arrangements

Estate planning extends beyond real property. Financial assets such as joint bank accounts and investments can also affect how wealth is passed on and accessed after death.

In many cases, joint accounts pass automatically to the surviving account holder through the principle of survivorship, without the need for probate. This can be especially beneficial where prompt access to funds is needed, such as covering funeral expenses or day-to-day living costs. However, not all financial arrangements offer this protection, and assumptions about account structure should be carefully reviewed.

Ensuring that your accounts and investments are held consistently with your broader estate planning objectives, is an important part of safeguarding financial stability for surviving partners.

Inheritance tax planning for unmarried couples

Inheritance tax (IHT) represents a key area of risk for couples who are not married or in a civil partnership. Unlike married couples, who can generally pass assets between themselves tax-free, unmarried partners may face a significant inheritance tax charge on death.

Owning a property jointly does not guarantee tax efficiency. If the value of the estate exceeds the available allowances, the survivor may be liable for tax on their partner’s notional share, even if they already jointly owned the home. This could place them under financial pressure at an already difficult time.

The position becomes more complex where property is passed to children. Additional allowances are available in some cases, but typically only apply to biological or adopted children. Families that fall outside these parameters will not benefit from the same reliefs, which underlines the need for tailored legal and tax advice.

Planning strategies may include life insurance to cover any tax liability, or considering formal legal ties that attract exemptions. These decisions, although sometimes made for practical rather than personal reasons, can provide vital protection.

Why powers of attorney should not be overlooked

Powers of attorney allow trusted individuals to step in and make decisions on behalf of another when they are unable to do so themselves. These documents are divided into two categories: property and financial affairs, and health and welfare.

Despite their importance, 78% of adults in the UK have not registered a Lasting Power of Attorney (LPA). For LGBTQ+ individuals, this creates a particular vulnerability. If no LPA is in place, decision-making authority may fall to a legal relative, even where the relationship is strained or no longer exists.

LPAs enable individuals to nominate the people they trust most, whether a partner, close friend, or chosen family member. They offer assurance that, should capacity be lost, the person making decisions will reflect their values and wishes.

Seeking advice and putting plans in place

The process of estate planning does not need to be daunting. Often, a carefully drafted will and a review of key property and financial arrangements are enough to provide peace of mind. Additional steps such as inheritance tax planning and creating LPAs, can add further protection and clarity.

Early legal advice ensures that any planning is appropriate to an individual’s personal circumstances, reflects their relationships, and avoids unexpected legal or financial consequences. The right support can simplify the process, reduce long-term costs, and most importantly, protect those who matter most.