Changes to Intestacy Rules: Increase in Statutory Legacy in 2023
On 26 July 2023, the Intestacy rules were updated in England and Wales. Due to the high inflation, the Government has implemented the increase in statutory legacy. This has now increased from £270,000 to £322,000.
What does ‘Intestacy’ mean?
The principle of intestacy is when a person dies without leaving a valid Will. This means that their estate must be shared out according to certain legislative rules – rules of intestacy. These rules identify who will be responsible for administering the estate and who will inherit from the estate.
The order of priority is set out in Section 46 of the Administration of Estates Act 1925 (AEA 1925), as amended. The Rules of Intestacy provide a strict structure for how an estate is divided and distributed which is dependent on whether the deceased was married and had children.
What is Statutory Legacy?
Statutory Legacy is the sum to which a surviving spouse/civil partner is entitled from the estate when the deceased has died intestate (without having made a valid Will) with children. A common misunderstanding is that the spouse will simply inherit everything.
The Statutory Legacy has now increased from £270,000 to £322,000. This means that a spouse will receive the first £322,000 of the estate. Therefore, if an estate has a value equal to or less than the statutory legacy, the spouse will essentially receive the estate in its entirety. However, if the estate has a greater value than £322,000, any value above this will be divided equally between the children and spouse. Therefore, 50% to the spouse and 50% to the children equally if more than one child. The Rules are complicated and therefore, it is important you seek legal advice accordingly.
Are there any other changes to the Intestacy Rules?
There are a few other changes that have come into play from July 2023. Although these are minor amendments, they will affect the estate of those who die intestate from July 2023 onwards. These are:
• Age at which children become entitled to inherit from the estate has increased from 18 to 19;
• Simplification of how stepchildren will inherit from the estate; and
• Further clarification of how half-siblings inherit from the estate.
What does this mean for you?
Due to the increase in the statutory legacy, a surviving spouse or civil partner will now receive an additional £52,000 if their spouse or civil partner passes away without leaving a Will in place. Whilst the increase certainly provides greater financial security for a surviving spouse, it may not accurately reflect the wishes of the deceased person. Therefore, to ensure that your wishes are accurately reflected and your property distributed how you want it to be. To facilitate this, it is therefore important to make a Will.
Why should I make a Will?
The most effective way to protect your family’s future and your own wishes is to make a valid Will. A Will enables you to appoint your own beneficiaries and to specify how you want your property to be distributed amongst them. You can also set out any gifts of money or funeral wishes in your Will and appoint an executor to manage your estate after your death and abide by these wishes accordingly.
If you do not have a Will in place, it is important to make one as soon as possible. This will ensure that your estate is distributed how you want it to be. Our specialist Private Client team at Lennons can offer advice on this and prepare your Will accordingly. Once your Will has been validly executed, here at Lennons, we offer safe storage of your Will at no extra cost. It is also possible to make amendments to your Will at any point in time which is known as a codicil.
Contact us on 01494 773377 or email@example.com if you would like advice regarding an intestacy or would like to make a Will.
Our Wills, Probate and Life Planning team would be more than happy to assist you with this.
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