Understanding the new Statutory Legacy: Intestacy

In the realm of estate planning and inheritance, intestacy laws play a crucial role in determining how a deceased person’s assets are distributed when they pass away without a valid Will. These laws are in place to provide a framework for inheritance when the deceased did not express their wishes through a Will. In this context, the concept of a “statutory legacy” has gained prominence, representing a fixed amount or portion of the estate that is guaranteed to be passed on to certain beneficiaries, usually the surviving spouse or civil partner. Recently, there have been discussions and changes to the intestacy statutory legacy, aiming to ensure a fair distribution of estates.

Defining the Intestacy Statutory Legacy

The intestacy statutory legacy is the minimum amount or share of the deceased’s estate that is protected by law to be given to certain individuals, even if there is no Will in place. This amount is reserved for the spouse or civil partner of the deceased, recognising their rights and needs in the absence of explicit testamentary instructions.

The Need for Change

Over time, societal norms, family structures, and economic conditions evolve, necessitating updates to these laws to reflect the changing landscape. One common issue that has arisen is the sufficiency of the statutory legacy, particularly in scenarios where the value of the estate is high or when the surviving spouse or civil partner faces financial challenges. In response, lawmakers have revisited these laws to ensure they adequately address modern concerns.

Recent Reform

Following a recent review, the statutory legacy has increased to £322,000 for deaths which occurred on or after 26^th July 2023. For deaths prior to this date, but between 6^th February 2020 to 25^th July 2023, the statutory legacy remains at £270,000.

In essence, this means that should you pass away without a Will in place from 26^th July 2023 onwards, the first £322,000 (the statutory legacy), together with all personal possessions, will pass to the surviving spouse or civil partner and then the remainder of the estate will pass as to 50% for the surviving spouse or civil partner and the remaining 50% will be divided between any children equally.

It is important to note that if there are no children, then the entire estate will pass to the surviving spouse or civil partner, which remains unchanged.

Is a Will still needed?

Despite this recent change, it is still important to have a Will in place as the intestacy rules still do not take into account more complex situations. For example, the intestacy rules do not provide for cohabiting couples so, for illustrative purposes, if you own a property as tenants in common with your partner, and you pass away without a Will in place, your share of this property will not pass to the survivor of you but instead via the intestacy rules which may mean that the survivor has to sell the property to release the equity, leaving them in a vulnerable position.

A Will also does a lot more than allow you to decide who is to benefit from your estate. It will allow you to appoint guardians of any minor children, leave specific gifts to certain individuals or charities and allows you to appoint individuals or organisations you trust to administer your estate effectively.

For further advice and assistance please contact our Wills, Trusts and Probate team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk