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Legal News | 13.07.23

A Change to the Intestacy Rules

A change in the intestacy rules - Wills, Tax, Trusts and Estates - Wansbroughs LLP

In recent Private Client news, the government has announced that the statutory legacy (also known as ‘the fixed sum’) will increase to £322,000 with effect from 26 July 2023.

What is the statutory legacy?

The statutory legacy is relevant when an individual dies intestate (in other words, without a valid Will in place) and leaves behind:

  1. a surviving spouse or civil partner; and
  2.  children

In this scenario, the intestacy rules apply. These dictate that various personal possessions from the estate are passed to the surviving spouse or civil partner, together with a sum up to the value of £270,000. Where the net estate exceeds this amount, the excess is divided as to 50% for the surviving spouse or civil partner and as to the remaining 50% held on statutory trusts for issue (i.e. equally divided between children in most cases). Where the net estate value falls below the statutory legacy amount, this reduced figure forms the statutory legacy.

From 26 July 2023, the statutory legacy figure will change from £270,000 to £322,000, meaning that more will pass to the surviving spouse or civil partner on death.

The importance of a Will…

Many couples (whether married, in a civil partnership or unmarried) have specific wishes when it comes to the beneficiaries of their estate. Those wishes might be that their partner should receive their full estate, or it might be that their children should receive a significant share of the estate. In most cases, the intestacy rules do not fully reflect those wishes.

It is also important to note that unmarried partners have no entitlement under the intestacy rules, even if they lived with the deceased as if they were married. In this situation, an unmarried partner can bring a claim against the estate, but this can be a lengthy and expensive process. Whilst the statutory legacy has been reviewed and increased, there has been no change by the government to include unmarried partners in the list of beneficiaries entitled on an intestacy.

Having a Will allows you to decide what happens to your estate when you die and ensures that your estate passes to the people that you want to benefit.

This is a complex area and, unless the intestacy rules reflect your wishes, you should make sure that you have a Will in place to control what happens to your estate. If you require further information or assistance, please get in touch with your usual contact at Wansbroughs or email wealth@wansbroughs.com.