On 26th July 2023 the Statutory Legacy upon intestacy was increased to £322,000.
This is important information for anyone who is yet to write a will or has previously written a will which is now invalid.
When making plans for the future, it's essential that you are aware of what happens to your estate should you pass away without a valid will.
What is intestacy?
Currently, when an individual passes away without a valid will, they are said to have died intestate. When an individual dies intestate their estate must be distributed following the rules of intestacy as set by government.
What are the rules of intestacy?
The rules of intestacy set out how the estate of the deceased must be distributed. Various factors are considered, such as whether the deceased has a spouse, children, or grandchildren.
The rules are not straightforward, however, they generally prioritise the spouse, then children, or alternatively if there is no spouse the estate will be shared between the deceased's children or parents.
It is important to note that the rules do not take into account modern 'blended' families including partners who co-habit, stepchildren or ex-partners. Therefore, if you intend to leave your partner, close friend, or stepchildren part of your estate, you must write a valid will so that your testamentary wishes are respected.
What is the statutory legacy?
The statutory legacy is the sum to which a surviving spouse or civil partner (for ease of reference I will refer to both as the spouse) is entitled from the estate when the deceased died intestate with children. The remainder of the estate will be shared.
The Intestacy Rules provide that, after the Statutory Legacy and the deceased's personal belongings and any remainder of the estate is shared between the spouse and the children. Half of this sum will go to the spouse and the other half will be shared equally amongst the children.
The effect of the increase in the statutory legacy is that a spouse will receive a higher sum from the estate before the deceased's children receive a share. A taxable intestate estate will invariably incur a greater liability to inheritance tax.
Why should I write a will?
Without a valid will your wishes are unlikely to be mirrored by the rules of intestacy. It is particularly important to write a will if you are cohabiting with a partner whom you wish to benefit under your will, or if you have remarried and want to leave over 50% of your estate to children of a previous marriage.
Further, as already stated, if you wish to leave part of your estate to charities or close friends you will also need to consider writing a will.
Lastly, a will can include provisions which help to mitigate inheritance tax, an unpopular tax affecting an ever-increasing proportion of bereaved families. There may also be a greater chance of financial claims to your estate under the Inheritance (Provision for Family and Dependants) Act 1975 if relying on the intestacy rules rather than disposing of your estate by valid will.
To find out more or to discuss your individual requirements in further detail, our dedicated Probate and Estate Administration solicitors are on hand to help. Contact us today on 01603 693510 or email us at email@example.com. Appointments are available at our Norwich, North Walsham and Sheringham offices.