Recent increase to the Statutory Legacy on intestacy


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The Statutory Legacy increased in England and Wales from £250,000 to £270,000 for deaths on or after 6th February 2020.

The Statutory Legacy is the amount a surviving spouse or civil partner is entitled to receive when a person dies either wholly or partially intestate (i.e. without an entirely valid will) and with children.
How do the rules work?
The rules set out by the Government establish a strict order as to who may benefit and by how much when an individual dies intestate. The amount an individual receives may depend on how many individuals there are.
The rules can be complex but in essence the rules favour spouses, children, parents, siblings, nephews/nieces, grandparents and aunts/uncles.
The rules are not subtle and take no account of cohabitees, step-children or other friends.
Example 1 – Married but with no children
Richard and Elizabeth are married. Richard dies without having made a will and leaves an estate worth £1,000,000.
As Richard and Elizabeth were married Elizabeth inherits the entire estate and no inheritance tax (IHT) is payable.
Example 2 – Cohabiting with young children
Richard and Elizabeth cohabit and have two young children of school age. Richard dies without having made a will and leaves an estate worth £1,000,000
As Richard and Elizabeth were unmarried, the whole estate passes to Richard's children who will receive their inheritance at 18. Inheritance tax will be payable of at least £200,000
Elizabeth may need to make a claim against the estate and her own children for appropriate financial support.
Example 3 – Married but with children
Richard and Elizabeth are married and have two young children of school age. Richard dies without having made a will and leaves an estate worth £1,000,000
Elizabeth receives £270,000 by way of statutory legacy, of the balance, half passes to Elizabeth and half passes to the children who will receive their inheritance at 18. The children's share may be subject to inheritance tax depending on how the estate is constituted.
Elizabeth may need to make a claim against the estate and her own children for appropriate financial support.
Changing how the estate passes by agreement
If the affected parties are over 18 and have capacity, they can enter into a deed of variation which is a legally binding agreement to vary how the estate passes.
Strict time limits apply for such variations and this is not a stand alone solution where there are minor beneficiaries who are unable to agree such documents.
Changing how the estate passes when agreement cannot be reached
Certain categories of people can qualify as being entitled to make a claim under the Inheritance (Provision for Family Dependants Act)1975 (the Act).
Typically this can be spouses and those who are financially dependent such as co-habitees. Such claims can be very complex, stressful, time consuming and costly but, unfortunately they can be necessary where adequate provision for dependants has not been made or Wills are not up to date. It is also important to note that any application for a financial provision from the Estate under the Act must be made within 6 months of the grant of probate so you need to move quickly.  
Much of the success of any claim will be dependent on what evidence can be presented to persuade the executors and other beneficiaries, or if agreement cannot be reached, the Courts as to the merits of such a claim.
Should you make a Will?
Although the increase to the statutory legacy is overdue, for many this will represent only small change to the present situation.
Having no will or an out of date will can not only mean that those you care about may not be provided for in full, or indeed can mean that those you do not wish to benefit (estranged family members) do.
In addition, not only can additional IHT be payable but individuals may be forced to seek redress through the court system just at a time of great stress and bereavement.
All of this can be avoided by the use of a professionally drafted will which is regularly reviewed.
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