On 5thJuly 2023, due to the recent high inflation, the government has updated the Statutory Legacy (Fixed Net Sum) to £322,000; this applies to deaths on or after 26thJuly 2023.
The Statutory Legacy is the sum which a surviving spouse or civil partner is entitled to from the estate when the deceased died without leaving a Will, also known as 'dying intestate'. The last Statutory Legacy rate was set on 6 February 2020 at £270,000 and continues to apply to any deaths after 1stOctober 2014 and up to 25thJuly 2023.
If you have a valid Will, your appointed executors administer your estate according to your wishes. However, should you die intestate, the Intestacy rules of the Administration of Estates Act 1925 will apply. These rules set out the order of entitlement to the assets in the intestate's estate depending on the value of the estate and which member of the intestate's family survive the intestate.
A deceased may die intestate if they:
- did not make a Will
- revoked a Will by physically destroying the Will with the intention to revoke it
- married or entered a civil partnership after making a Will
- made an invalid Will
Who gets the estate on an intestacy?
If the intestate leaves a surviving spouse or civil partner
If the intestate dies leaving a spouse or civil partner and issue (all direct descendants), the residuary estate passes as follows:
- spouse or civil partner receives all chattels absolutely
- spouse or civil partner receives the Statutory Legacy free of inheritance tax. If the residuary estate is worth less than the Statutory Legacy, the spouse or civil partner receives everything, and the issue receive nothing.
- The remainder of the estate is divided into two halves; the spouse or civil partner receives half, and their children receive the other half.
Should the intestate die leaving a spouse but no children or grandchildren; the spouse inherits the whole estate.
If the intestate leaves no surviving spouse or civil partner
Where there is no surviving spouse or civil partner, but the intestate dies leaving blood relatives, the residuary estate passes in the following order:
- Children or grandchildren
- Parents equally if both survive
- Siblings and issue of siblings who predeceased the intestate
- Surviving half siblings and issue of surviving half siblings
- Surviving grandparents equally if both survive
- Surviving aunts or uncles or surviving issue of aunts and uncles
- Surviving half aunts and unless or surviving issue of half aunts and uncles
- If there is no surviving blood relation, the estate passed to the Crown.
The effect of the Intestacy rules may be unfair as surviving dependants such as a cohabitee or unmarried partner of an intestate will not be provided for. Making a Will is the simplest way to avoid any unintended consequences of the intestacy rules, provides certainty for your loved ones and ensures your wishes are carried out.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.