Intestacy: The statutory legacy increase
From 6 February 2020 the statutory legacy has increased from £250,000 to £270,000.
This is the amount a surviving spouse or civil partner is entitled to receive when a person dies without making a valid will (known as intestacy) leaving children.
The rules of intestacy provide that the estate is distributed in a particular way depending on the surviving family and the amount of the estate.
If the deceased had no children the whole estate will still pass to the surviving spouse or civil partner. The statutory legacy will not apply.
If the deceased had children, the surviving spouse or civil partner will inherit the deceased`s personal property, the statutory legacy of £270,000 and 50% of the remainder. The remaining 50% passes to the children equally.
If the deceased is unmarried, with no children, the intestacy rules provide for the estate to pass in a particular hierarchy: parents first, and if no surviving parents, to brothers and sisters (or remoter descendants). There is no provision for cohabitees, step-children or close friends.
The increase in the statutory legacy is in line with the consumer price index and is generally welcomed but is no substitute for making a valid will.
Relying on the intestacy rules may result in your estate passing to different beneficiaries and not in the way you intended, could lead to additional inheritance tax being paid (if part of the estate passes to children and is not covered by the spouse exemption), and increases the risk of a claim against the estate by disappointed beneficiaries.
If you wish to discuss how the intestacy rules could affect your estate, the importance of estate planning to ensure your wishes are followed and how to minimise inheritance tax, please contact our probate lawyers today https://www.rutherfordslegal.com/wills-probate/