Under the current intestacy rules, if you die with no children your spouse or civil partner will inherit your entire estate. If you die leaving children, your surviving spouse or civil partner will receive a legacy of £250,000 plus one half of the residue of your estate with your children inheriting the remaining half.
The Lord Chancellor is required to review the statutory legacy at least every five years and on 15 January 2020, he announced an increase of the statutory legacy figure from £250,000 to £270,000 in line with the consumer price index.
The new statutory legacy sum of £270,000 will come into force on 6 February and while the increase is welcomed, the intestacy rules are intended to be a default position. Relying on them can not only lead to your estate passing in an unintended way, but you can lose out on various Inheritance Tax and estate planning opportunities that might be available if you had a considered putting a Will in place.
Further, many people aren't aware that unmarried, cohabiting couples do not inherit at all under the intestacy rules. In these circumstances, the deceased's surviving partner would have to make a claim for maintenance under the Inheritance (Provision for Family and Dependents) Act 1975. There are certainly no guarantees that a claim would be successful and it can be an expensive and stressful process.
As The Law Society President, Simon Davies, commented:
“ This increase is very welcomed, but many people are unaware that under intestacy laws, unmarried partners and close friends cannot inherit.
Writing a legally valid will with the help of an expert solicitor ensures people’s estate is inherited exactly as they would choose and can prevent a whole raft of problems landing on loved ones when they are grieving.”
The New Year is an ideal time to get your affairs in order so if you have been thinking about making a Will or revisiting your estate plan then please do not hesitate to contact a member of our friendly Private Client Team.
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