Inheritance law for de facto and legal cohabitants: how to protect each other?

In Belgium, there are three forms of cohabitation: de facto cohabitation, legal cohabitation and marriage. Although the cohabitation forms are similar in many ways, there are important differences when it comes to inheritance law and the protection of the partner in case of death. Marriage offers the best protection, but what if you do not want to marry? For de facto and legal cohabitants, it is especially crucial to consider what happens when one of the partners dies. What measures can be taken to protect the remaining partner financially? We are happy to shed some light on the matter!

Legal vs de facto cohabitation: inheritance law

Legal cohabitation offers some protection in terms of inheritance law. Here, the surviving partner automatically inherits usufruct on the family home and its contents. This means that the surviving partner has the right to continue living in the family home, but does not get ownership of the deceased partner's home or other possessions, unless this is stipulated in a will.

In contrast, de facto cohabitation does not provide any legal protection in case of death. De facto cohabitants do not inherit anything from each other without a will. This can lead to difficult situations, where the deceased's family is the legal heir, rather than the partner he or she has lived with for years.

Building in protection: will and gifting

Cohabitants can take certain legal steps to better protect each other in case of death.

Will

One of the simplest and most direct ways to protect your partner is by making a will. In a will, you can explicitly stipulate that your de facto partner (or a legal cohabitant) inherits certain assets, such as the family home or part of your assets. For de facto cohabitants, this is essential because without a will, they legally inherit nothing from each other.

It is important to note that even with a will, legal cohabitants are limited by the reserve that accrues to the children (if any). This means that as a parent, you are not free to gift your entire estate to your partner if you have children.

Gift

Another option is to already transfer certain assets to your partner during your lifetime via a gift. This could be money, property or other valuable assets. Gifts are subject to gift tax, depending on the value of the gift and the family relationship between the parties. Gifting can be a good way to ensure that your partner has sufficient funds after your death.

Providing your partner with extra protection through death or debt balance insurance

Besides making a will or gifting, taking out death insurance or debt balance insurance can provide an extra financial cushion and further reduce financial uncertainty in the event of your death.

Death insurance

Death insurance is an excellent way to protect your partner and any heirs from the financial consequences of your death. The principle is simple: upon death, your designated beneficiary receives a pre-determined capital. This amount can be used to cover expenses such as mortgage repayments, everyday expenses, or inheritance tax.

How does it work? You choose the sum insured and who the beneficiary is. This means that even if you are actually cohabiting, you can designate your partner as beneficiary, something that is not automatically possible through inheritance law. The premium you pay depends on your age, health and the insured amount. The advantage is that you can have the insurance fully tailored to your specific situation.

Benefits of death insurance:

• Protection of your partner and family from financial uncertainty.
• Flexibility: you decide who the beneficiary is and what capital is paid out.
• Peace of mind: you know your loved ones are financially protected, even if the unexpected happens.

Debt balance insurance

Debt balance insurance is a specific insurance that is mainly applicable when you take out a loan together, for example for a house. This insurance ensures that all or part of the outstanding debt (usually a mortgage) is repaid upon the death of one of the borrowers.

How does it work? When taking out a mortgage loan, you can take out debt balance insurance. This insurance can cover all or part of the debt, depending on the cover chosen. If one of the partners dies, the insurance takes over the repayment, so the remaining partner is not left with the full debt. This is especially important for de facto cohabitants, as without debt balance insurance, they may not be protected against the loss of their partner's income.

Advantages of debt balance insurance:

• Assurance that the loan will be (partially) repaid on death.
• Avoids the surviving partner suddenly having to face heavy financial burdens.
• For legal cohabitants, the usufruct on the home can be protected, while for de facto cohabitants the insurance can prevent the home from having to be sold to repay the debt.

Conclusion: extra financial protection is not a luxury

Whether you cohabit de facto or legally, it is important to think about your partner's financial protection in case of death. Besides making a will or considering gifts, death insurance or debt balance insurance can provide crucial protection. These legal steps and insurance policies ensure that your partner does not have to face unexpected financial challenges and offer peace of mind during difficult times.

At S.W.I.S. Insurance, we are ready to advise and help you find the insurance that best suits your situation. Feel free to contact us for more information or a no-obligation consultation.