Statutory legacy increase: partners to receive more on intestacy

Recently the Lord Chancellor announced a new fixed sum that a surviving spouse or civil partner is entitled to when their partner has died intestate but has surviving children. The change increases the sum, known as the statutory legacy, in line with the Consumer Price Index from £250,000 to £270,000 and takes effect from 6 February 2020. 

What does it mean to die intestate?

To die intestate means without having made a valid Will. This may occur for a number of reasons, for example:

1. The deceased didn’t make a Will;
2. The deceased made a Will but it was revoked, for example by destruction with an intention to revoke or by subsequent marriage/civil partnership; or 
3. The Will failed to dispose of all of the Estate giving rise to ‘partial intestacy’.

What is the effect of the rules of intestacy?

The intestacy rules contained in Administration of Estates Act 1925 governs who is entitled to an individual’s property when someone dies without disposing of it by Will, depending on their circumstances. 

Married or in a registered civil partnership with children

If the deceased and their spouse have children, spouse will inherit:

• All of the deceased’s personal property;
• The first £270,000 of the Estate (the statutory legacy); and
• Half of the remaining Estate. 

The remaining half of the Estate then passes to the deceased’s children at 18 years of age. 

Married or in a registered civil partnership with no children

Under the intestacy rules, if the deceased has no children, their spouse will inherit the entire estate. 

Not married or in a registered civil partnership

If there is no surviving spouse or civil partner, the estate is shared equally between relatives in the highest category of those listed below: 

• Children (at 18 years of age) 
• Parents
• Brothers and Sisters (or their descendants) 
• Grandparents
• Uncles and Aunts (or their descendants) 
• The Crown (otherwise referred to as ‘bona vacantia’) 

Comment

Whilst the increase is welcomed, relying on the intestacy rules can still fall short of ensuring an estate is inherited how a person intends it to be. Whilst most people would expect that their spouse would receive their entire estate, this may not be the case if they have surviving children, as demonstrated above.

For instance, many are not aware that the rules of intestacy still make no provision for unmarried couples or step-children. In such instances, the only course of action for the deceased’s partner would be to claim that reasonable financial provision was not made for them under the Inheritance (Provision for Family and Dependents) Act 1975. The consequences of making such a claim can be very costly financially and emotionally especially during a time of grief, and without guarantee it will be successful.

In addition, choosing not to put a Will in place can have tax implications. There are various Inheritance Tax and estate planning opportunities which are available where a legally valid Will is made with assistance of an expert solicitor, and which are not applicable upon intestacy.