Getting married or entering a civil partnership

Marriage revokes your will

In England and Wales, getting married automatically cancels any will you already had, unless it was specifically written in contemplation of that marriage.

Almost nobody knows this. The consequence is that someone who made a careful will, then married, dies intestate — with their estate distributed under statutory rules that may leave it in entirely the wrong hands, particularly where there are children from a previous relationship.

If you have a will, it needs remaking. If you don't, this is a good moment to make one. Either way, mention the wedding to whoever draws it up so it can be written in contemplation of the marriage if you're doing it beforehand.

Divorce works differently — it doesn't revoke a will, it treats your former spouse as having died before you, and only once the divorce is final.

The tax position improves considerably

Transfers between spouses are free of capital gains tax. No gain, no loss. This is quietly one of the most useful planning tools available to a couple: moving an asset to whoever will pay less tax on the eventual sale, or splitting an asset so both annual exemptions can be used. See Capital Gains Tax basics.

Transfers between spouses are free of inheritance tax, without limit. And unused nil rate bands transfer to the survivor, which is why a married couple can often pass on up to £1 million between them where a cohabiting couple cannot.

Marriage Allowance lets a non-taxpaying spouse transfer £1,260 of Personal Allowance to a basic-rate taxpaying partner, worth £252 a year. It can be backdated four years. It doesn't work if the higher earner pays 40%.

Income-producing assets can be moved to whichever of you pays less tax, using both sets of allowances rather than one. Savings interest, dividends and rental income are all worth looking at jointly rather than individually.

What changes if one of you dies

This is the part that most distinguishes marriage from living together, and it's the reason the difference matters more than the paperwork suggests.

A surviving spouse or civil partner gets:

• Everything free of inheritance tax, and the transferable nil rate band
• An additional permitted ISA subscription equal to their partner's ISA value, preserving the tax shelter
• Bereavement Support Payment, which unmarried partners don't receive however long they were together
• Better treatment under most pension schemes, particularly defined benefit ones, many of which pay a spouse's pension automatically but require an unmarried partner to be nominated and sometimes to prove financial dependency
• Automatic inheritance under intestacy if there's no will

A cohabiting partner gets none of this. There is no such thing as common law marriage in England and Wales, and the gap is much wider than most couples assume.

The paperwork to update

Marriage is a good prompt for the admin nobody does:

Pension expression of wish forms on every scheme, including old ones. These aren't governed by your will, and trustees follow whoever is named — which may be a parent or a previous partner.

Life insurance beneficiaries and any trusts.

Death in service nominations at work.

Your will, as above.

An hour on this list is worth more than most financial decisions you'll make this year.

Combining money, or not

There's no right answer and it's mostly not a financial question. Joint, separate, or a joint account for shared costs with individual accounts alongside — all work.

Two practical points that are financial:

• Joint accounts create joint liability, including for any overdraft, and they link your credit files.
• Joint accounts pass automatically to the survivor on death, outside the will, which is sometimes what you want and sometimes not.

Protection, again

If you're now financially interdependent, one income disappearing matters in a way it didn't before. That's true even without children, and especially if you have a mortgage together.

Two single-life policies are often better than one joint policy — they pay twice rather than once, they survive a separation cleanly, and each can be written in trust separately. See Life insurance.

Pensions

Worth looking at together rather than separately. If one of you has a large pension and the other very little, contributing to the smaller one uses a second Personal Allowance in retirement, which can be worth a great deal — see Which pot do you spend first?.

A non-earning spouse can contribute £2,880 a year and receive £720 in tax relief, which is free money that goes unclaimed by a lot of single-income households.

This page is for general education only and isn't personal advice. Will and intestacy rules differ between the nations of the UK.