Increase In The Statutory Legacy On Intestacy

As you may be aware, the Government has recently announced that the statutory legacy a spouse or civil partner receives under intestacy will increase. Head of Wills and Probate Jo Robinson discusses this recent news in her latest blog…

The Government has confirmed that on 26^th July 2023 the statutory legacy that a spouse or civil partner receives under the intestacy laws will increase from £270,000 to £322,000. This is the amount that a surviving spouse or civil partner is entitled to first, before the remainder is shared, if the deceased also left children.

The previous rise in the statutory legacy took place in January 2020 and legislation provides that the legacy must be reviewed every 5 years. However, the legislation also provides that if inflation increases by 15% or more from the base rate applicable to when the statutory legacy was previously set, the government must review the sum and take steps to amend it.

How Does An Individual Die Intestate?

A person will be known to have died intestate if:

They did not make a will.
They had a will but it was revoked by an action such as:

- Physically destroying the will with the intention of revoking it.
- Marrying or entering into a civil partnership after making a will, unless the will states that the testator is making it with the intention of marrying or entering into a civil partnership with a particular individual.

They made a will that was invalid.

The Intestacy Rules

When someone dies intestate, the intestacy rules apply. These rules are found in the Administration of Estates Act 1925 and were reformed by the Inheritance and Trustees’ Powers Act 2014.

Total Intestacy

A total intestacy occurs when a person dies without leaving a valid will.

Partial Intestacy

A partial intestacy happens when someone dies leaving a valid will, but the will fails to deal with all of the estate. The intestacy rules apply to the part that the will does not cover.

For example, a person makes a will (the testator) leaving their estate to two beneficiaries in 50% shares. If one of the beneficiaries dies before the testator then that share lapses and passes under the intestacy rules unless:

The will includes a substitutional gift of that share – so that another beneficiary receives the gift instead.
The will includes ‘accrual’ wording so that the share automatically passes to the other beneficiary.
The will includes a ‘class gift’ – for example “to such of my children as shall survive me and if more than one in equal shares”.
The gift is to a child – in which case, section 33 of the Wills Act 1847 applies meaning that the gift passes to the child’s children or issue (direct descendants), unless there is a contrary intention in the will.

What Property Can Pass By Intestacy?

The intestacy rules only apply to property that the deceased could have left by will. The rules do not include:

Assets that the deceased held jointly with another person which pass automatically by joint survivorship. For example, a house.
Assets held on trust for the deceased, that pass under the terms of the trust on their death.
Life insurance policies taken out for the benefit of named individual. For example, a policy taken out for the benefit of a spouse and/or children.
Pension benefits paid by the trustees of the pension fund at their discretion to members of the deceased’s family.

Distribution On Intestacy

The order of entitlement under the intestacy rules is set out in section 46 of the Administration of Estates Act 1925 and can be summarised below:

Is the client married or in a civil partnership?
		Yes ↓	No ↓

Spouse / civil partner gets everything	No ←	Is the estate worth more than £322,000 (from 26/07/23)?	Do they have children?	Yes →	Their estate is shared equally between them
		Yes ↓	No ↓

Spouse/civil partner gets personal chattels^*, £322,000 (from 26/07/23) and half the remainder. Children get the other half share which is held in trust for them until they reach 18		Does the client have children?	Do they have parents?	Yes →	Their estate is shared equally between them
	Yes ←	No ↓	No ↓

		Everything goes to the spouse/civil partner	Do they have brothers and sisters?	Yes →	Their estate is shared equally between them
			No ↓

			Do they have nephews and nieces?	Yes →	Their estate is shared equally between them
			No ↓

			Do they have grandparents?	Yes →	Their estate is shared equally between them
			No ↓

			Do they have uncles and aunts?	Yes →	Their estate is shared equally between them
			No ↓

			Do they have cousins?	Yes →	Their estate is shared equally between them
			No ↓

() Personal chattels are items of personal property that may include, for example, furniture, jewellery and clothes.*			Everything goes to the Crown (Government) or the Duchy of Cornwall or to the Duchy of Lancaster, if resident in those areas