What is the statutory legacy?

If someone dies without having made a will, they are said to have died intestate. In such a scenario the estate of the deceased passes in accordance with the intestacy rules. (These rules also apply to any property which is capable of being disposed of by a will, but has not been disposed of – a partial intestacy.)

At a glance, the rules impose a trust over all property. Following the payment of debts and administration expenses, the balance becomes the residuary estate. From this, the surviving civil partner or spouse receives all chattels and then a fixed sum, being the statutory legacy.

New Statutory Legacy from 26 July 2023

From 26 July 2023, the statutory legacy available to a surviving civil partner or spouse was raised to £322,000. This was an increase from £270,000, as set in February 2020.

This means that in the case of an intestacy, if the estate is below £322,000, or the deceased had no issue (children or grandchildren-see below), the civil partner or spouse will receive the entire estate. If the estate is above £322,000, the balance over is split equally as to half for the civil partner or spouse and half for issue of the deceased (to be further split as per statutory rules).

For many, this is a welcomed change which will see civil partners or spouses receive more from the estate in priority. For others, this change will heighten concerns that they will inherit less and/ or the wishes of a loved one are not met. In any event, this update to the law reaffirms the importance of having a will to ensure the estate is distributed as desired.

Considerations

It is unlikely that the intestacy rules accord with the wishes of the deceased. The rules derive from a 1925 statute and family dynamics are now considerably different a century later. Contrary to popular belief, there is no legal recognition of common law partners/ spouses. The statutory legacy is applied strictly and cohabitees are not included.

Moreover, the rules do not include stepchildren as issue of the deceased, or provide for other dependants to inherit.

Ultimately, whilst the statutory legacy has been increased, this may not be sufficient for a surviving or spouse to retain their standard of living. At the other end of the spectrum, insufficient funds may not be left for issue or others who are the ones really in need.

Why have a Will?

1. Without a will, the above rules have the potential to create inadvertent results.
2. A will provides certainty. A will can be drafted to meet the requirements of the testator’s circumstances and ensure they can benefit whomever they would like, and in whatever way.
3. A will also provides clarity. The personal representatives will have a clear document to work from, thus reducing the risk of disputes arising out of probate.

If you require further advice in relation to Wills, Intestacy or Estate administration, please contact Mercers

Article written by Oliver Clark – Trainee Solicitor – Private Client