New Statutory Legacy Rules from July 2023
When someone dies who has not made a valid will their estate is dealt with in accordance with the
Law of Intestacy. These rules set out how estates are to be distributed and ranks various parties into an order for inheriting from an estate. The current law sees that spouses and civil partners are the first to inherit from a deceased’s estate, where applicable, followed by any children, parents, siblings, and so on.
In July 2023 the Statutory Legacy sum for spouses and civil partners was increased from £270,000 to £322,000. This will be relevant for anyone who dies intestate, who is married or in a civil partnership, and who also has children (whether these are of the current marriage/partnership or not). The new changes mean that spouses and civil partners will now be entitled to the first £322,000 of their deceased partner’s estate.
What does this look like in practice?
- For an estate worth more than £322,000 à the spouse/civil partner will inherit the first £322,000, with the remaining sum being divided into two with one half also going to the spouse/civil partner and the remaining half being for the child/children.
- For an estate worth less than £322,000 à the spouse/civil partner will inherit everything.
*Where there are no children to inherit then the spouse/civil partner will again inherit everything.
*Where there is no spouse or civil partner but there are children the estate will be split equally among the children.
What does this mean for families?
- A surviving partner may inherit the vast majority, if not all, of an estate and leave any children with potentially minimal, if not no, inheritance.
- Disputes and claims from children seeking a share in their deceased parent’s estate can lead to increased, considerable, and unnecessary stress, delays and costs for all parties involved.
- Where a deceased’s estate is comprised primarily of the value of their property the surviving partner may end up having to sell the property in order to release sums due to children.
- Alternatively, any children may instead be added onto property deeds which could then limit what the surviving partner can do with the property down the line.
- Avoidable Inheritance Tax may arise and become owed out of the estate, which could significantly impact on the inheritance of any children.
- The Law of Intestacy does not provide for blended families, meaning any stepchildren would in no case inherit anything.
- What can you do?
- The best way to avoid the Law of Intestacy is to ensure you have an accurate and representative Will which deals with your estate in a manner with which you are happy and content.
- This can be further protected by enacting Lasting Powers of Attorney which ensure that the people you trust most are the ones to assist you and keep control of your estate if you were to ever lose the mental capacity to do so yourself.
To see how the Law of Intestacy may affect you, please see the following Government webpage for an informal and interactive way of assessing your circumstances -
www.gov.uk/inherits-someone-dies-without-will
If you would like to know more about how best to protect yourself from the Law of Intestacy, or about Wills and/or Lasting Powers of Attorneys more generally, please contact the office on 01692 581231 or 01603 783818 or by email enquiries@capronandhelliwell.co.uk.
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Note – Cohabitees, sometimes referred to as ‘common law husbands/wives’, have no entitlement under the Law of Intestacy.
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Note – This article aims to supply general information but is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy.
Always seek specific advice.