Change to Intestacy Rules See a Rise in the Statutory Legacy

                      Josh Dunstone

Written by Josh Dunstone, Solicitor at Spire Solicitors LLP.

What is intestacy?

When someone dies without having made a Will, there are laws in place that dictate which blood relatives can inherit from the estate. These laws are more commonly known as the Intestacy Rules and are a rigid set of provisions that work through the bloodline of the deceased in a strict hierarchy to find a beneficiary.

Many people presume that their next of kin will automatically receive the whole of their estate, however this is not always the case. The order is currently as follows:

  1. Spouse
  2. Children
  3. Parents
  4. Brothers and sisters of the whole blood
  5. Brother and sisters of half-blood
  6. Grandparents
  7. Uncles and aunts of the whole blood
  8. Uncles and aunts of half-blood
  9. The Crown

These provisions are complex but as a rule of thumb, if no one exists in a category then you move on to the next category until a blood relative is found. If no blood relative exists, the Crown will ultimately inherit an intestate estate. From March 2018-March 2019 the Crown received over £12m from estates where no known blood relatives existed.

What has changed?

On the 6th February 2020, the government increased the statutory legacy from £250,000 to £270,000. This is the first increase since October 2014 and the government has undertaken to update the statutory legacy every 5 years in line with inflation. The statutory legacy affects those who have not made a Will and die leaving a spouse/civil partner and children.

How does the statutory legacy work?

If you die leaving a spouse or civil partner but have no children, your spouse or civil partner will inherit everything. If you do have children, your spouse or civil partner will inherit all personal possessions, a “statutory legacy” of £270,000 and 50% of any remaining assets. The other 50% would be shared between your children.

What do the Intestacy rules not cover?

While this change updates the statutory legacy in line with RPI, it does not address the fact that the Intestacy Rules do not:

  • appoint Legal Guardians for children under the age of eighteen if they are unfortunate enough to lose both parents before becoming an adult;
  • allow gifts to friends or charities regardless of how close they may be to your heart;
  • make provision for partners that are not married or in a civil partnership. The concept of a “common law marriage” has not existed since the mid-1700s so a co-habitee or unmarried partner will not inherit anything unless they are named in a Will;
  • account for family disputes, estrangements or blended families from second relationships/marriages; or
  • allow you to conduct any tax or care fee planning to protect your estate and look after your family.

The importance of making a Will

The list above covers only the more common issues with relying on the Intestacy Rules to determine who inherits from you. The only way to ensure that you have control over what happens on your death is for you to make a Will. As well as providing you with peace of mind, a Will can alleviate stress and worry for your family at an already difficult time.

If you have a Will in existence, we strongly recommend reviewing it at least every five years to ensure it still accords with your wishes.

If you would like to discuss any points in the article, please call Spire Solicitors LLP on 01603 677077 for all your legal needs.