The Government has announced that the statutory legacy will increase from £270,000 to £322,000 with effect from 26 July 2023.
What is the Statutory Legacy?
If a person dies without a Will (known as dying ‘intestate’), their estate will be divided according to the rules of intestacy. A significant component of these rules is the ‘statutory legacy’, which may not reflect one’s personal wishes.
In simple terms, the statutory legacy is a fixed sum of money that a surviving spouse or civil partner is entitled to when their partner dies intestate, and they have surviving children. The amount of the statutory legacy can change over time, being updated to reflect inflation and other economic factors.
The remainder of the estate, after the statutory legacy has been paid, is then divided according to the rules of intestacy. This often means that the remaining assets are shared between the surviving spouse and the children.
While the statutory legacy might offer a degree of protection, and the increase to £322,000 is certainly welcome, it’s a blunt tool in the nuanced world of personal relationships and individual wishes, and can have many unintended and negative consequences.
Potential pitfalls of not having a Will
- Unintended beneficiaries: The rules of intestacy are generic, so they might not reflect your personal relationships or your wishes for your assets. Close friends, unmarried partners, and even certain relatives might not receive anything from your estate.
- Delayed access to assets: The process can be time-consuming, causing additional stress for your loved ones during an already challenging period.
- Additional costs: dying intestate may lead to increased legal fees and potential court proceedings, diminishing the assets available to beneficiaries.
- Lack of control over children’s inheritance: Without a Will, children automatically inherit at the age of 18. This might not align with your wishes or the maturity level of the child.
You can avoid leaving the division of your assets to a one-size-fits-all system by drafting a Will to protect your loved ones, ensure your wishes are respected, and potentially save on taxes and legal fees.
Our team is here to help. For professional advice about drafting a Will that reflects your personal desires and safeguards your family’s future, contact Emma Howlett or a member of the Private Client team on 0808 256 2917.