Increase in Statutory Legacy

25 February, 2020

When a person dies without a Will their estate will pass under the rules of ‘intestacy’. These rules govern who will receive an entitlement from the Deceased’s estate and how much they receive.

 

For example, where a person dies leaving a spouse and children, the  spouse will receive all of the deceased’s personal chattels (these are the items they owned), a statutory legacy free of tax (this being a sum of money determined by law) and a life interest in one half of the residuary estate. The other half of the residue passes to the children absolutely on statutory trusts. The sum in the life interest trust will then pass to the children once the spouse dies.

 

The statutory legacy has recently increased to £270,000 and will apply to estates where a deceased died on or after 6 February 2020.

 

While this increase is welcomed by many, it can still result in situations which individuals might not expect or want following their death. For example, under these rules, unmarried partners (or partners who’s marriage is not recognised under English law) cannot inherit, which may surprise many. Alternatively, if they are married and their estate is worth more than the statutory legacy, these rules can leave the surviving spouse in a difficult position where the Deceased’s estate must be divided. The survivors may have a claim against the estate in these circumstances but this can be a time intensive and costly process, one which may have been avoided through the preparation of a Will.

 

If you have concerns as to how your estate will pass following your death, concerns as to how to administer an estate or if you believe that an estate has not been distributed correctly, please get in touch with a member of the will disputes team