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Increase in Statutory Legacy
As of 26th July 2023 the Statutory Legacy upon intestacy is increasing to £322,000.
The Statutory Legacy is a specific sum of money given to the surviving spouse or civil partner of the deceased, who has died without a valid Will and with children.
Ordinarily when someone passes away their estate passes in accordance with their latest Will. When someone dies without making a valid Will they are said to have died intestate. When someone passes away intestate their estate will be passed in accordance with the Intestacy Rules.
Many people assume that when you die without a valid Will their estate automatically passes to their spouse or civil partner, this is incorrect.
When there are children of the family, the Intestacy Rules provides that a spouse receives a Statutory Legacy in the sum of £322,000 (as of 26th July 2023), all personal possessions and half of the residuary estate. The remainder of the residuary estate is shared equally between the children on statutory trusts.
Previously, the Statutory Legacy was set at £270,000. The significant increase to £322,000 aims to provide surviving spouses and civil partners with increased financial security. It also aims to reflect the increase in the cost of living. The statutory legacy sum is reviewed every 5 years or when the inflation rate rises by 15% or more which then triggers a review by the Government.
However, it is therefore important to consider the consequences of not having a valid Will in place and to understand what would form part of your 'Estate'. There may be tax implications if your entire Estate does not pass to your spouse or civil partner. It is also particularly important with second and blended families to consider arrangements for a current spouse or partner and children from a previous relationship.
Another key point is the Statutory Legacy only applies to couples who are married or have entered a legal civil partnership. The law does not recognised the concept of a 'common law spouse' and so if you are cohabiting, but do have not will in place your partner will not receive the Statutory Legacy and your Estate would instead pass to your legal next of kin, be it children, parents, siblings or other remote classes of family depending on who survives you.
The best way to ensure your estate passes in accordance with your wishes and your family are protected, is to create a Will with a qualified professional. Contact us to obtain further advice or to start the ball rolling with putting your Will in place.
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If you need legal advice regarding any Wills, Trusts & Probate matters please contact our specialist Wills, Trusts & Probate team