Increase to statutory legacy

When somebody dies without leaving a will, or they have made a will but it is not legally valid, their estate is distributed in accordance with the rules of intestacy.

On the 5^th July 2023, the government introduced changes to these rules, which could have a significant impact on bereaved spouses/civil partners and children, emphasising the importance of having a will in place so that these rules are not imposed on your own estate.

The rules of intestacy divide an intestate estate based on a fixed order of relationships, initially prioritising the interests of surviving spouses/civil partners.

If the deceased was married or in a civil partnership (or indeed separated but not divorced/dissolved at the time of death) and left no children, the surviving spouse/civil partner will inherit their estate in its entirety.

However, if the deceased passes away leaving a surviving spouse/civil partner and a child or children (including adult children), the surviving spouse/civil partner will now inherit:

• all the personal property and belongings of the person who has died; and
• the first £322,000 of the estate (this increased on the 26th July 2023 from £270,000); and
• half of the remaining estate.

The child or children of the deceased will be entitled to the other half of the remaining estate.

Ultimately, this means that surviving spouses/civil partners will now inherit a greater proportion of their partner’s intestate estate.

What does this all mean?

Whilst an increase to the statutory legacy is beneficial for some, it does not solve the problems of intestacy entirely. Although the rules try to create a system of fairness, they cannot take into account the varied relationships of everyday life like a will.

Why should I have a will?

• The rules do not apply to couples who are not married or in a civil partnership, as cohabiting partners cannot inherit under the rules of intestacy despite the likely wish to leave your estate to your significant other. This is easily resolved by having a will in place that names your partner as a beneficiary.
• You can ensure that those who you wish to inherit from your estate do so, and those you do not wish to inherit do not!
• You can make provision for wider family members such as stepchildren, friends and charities.
• The rules of intestacy do not always lead to the most efficient Inheritance Tax position. Although Inheritance Tax cannot always be avoided, there are ways in which your estate’s liability can be minimised through a well-prepared and properly drafted will.

For more information about how we can help you prepare your will, or if you need advice about a person who has died without leaving a will, please contact us on 01603 620508 or email us directly.

For details of all our bereavement and later life planning services, please follow the link.