Statutory Legacy Increase: What will it mean for those without a Will?
Posted on 20th January 2020
Our team of Wills and Probate Solicitors in Lancaster have previously reported on what happens to your estate (so, all of your assets, such as your property and money) if you die without leaving a Will. You can read all about it on our blog, here.
Whilst the rules of intestacy haven’t changed, the amount that would first pass to your spouse before your children inherit any share of your estate, is set to increase in 2020. As of 6th February, rather than receiving the first £250,000.00, your spouse will receive the first £270,000.00 as their statutory legacy sum.
This may seem like a random increase, however our team of Wills and Probate Solicitors in Preston would explain that the statutory legacy sum is calculated by working out and applying the change in the Consumer Price Index (CPI) from the ‘base month’ (October 2014, when the statutory legacy sum was last set) to the ‘current month’ (the most recent CPI figure available at the time of fixing the sum, which was November 2019, as published by the Office for National Statistics on 18th December 2019). These figures work out as an increase of 8.1% from the figure of £250,000.00 (so, £20,250.00), which is rounded to the nearest thousand, as required by the Administration of Estates Act 1925.
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The Law Society President, Simon Davies, commented that this does not affect how the rules of intestacy work, except for the amount that the family will receive. Anything above £270,000.00 of the estate will be split equally between the spouse of the deceased (50% of the remainder), and their children (50% of the remainder).
As an example, if a person’s estate is worth £275,000.00 (after inheritance tax, any liabilities and estate expenses) the whole estate will pass to their spouse.
If a person’s estate is worth £1,000,000.00 (again, after inheritance tax, any liabilities and estate expenses) the first £275,000.00 of their estate will pass to their spouse.
The remaining £725,000.00 of the estate will be divided as to £362,500.00 to the spouse (in addition to their £275,000.00), and £362,500.00 to be divided between any children of the deceased. This means that if there are four children, the amount due to each of them will be £90,625.00.
If the deceased has any children who have predeceased them leaving their own children, so the deceased’s grandchildren (or great-grandchildren, and so on), then they will be entitled to the share of the estate which their parents would have inherited.
The grandchildren’s share would be divided equally by how many there are. So, if the parent of the children would have been entitled to £90,625.00, and they died leaving 2 children, each child would inherit £45,312.50.
Whilst Simon Davies explains that the increase is welcome, he also explains that many people remain unaware that under the intestacy laws, any unmarried partners or their close friends cannot inherit.
Our team of Wills and Probate Solicitors in Lancaster cannot stress enough how important it is, to ensure that your wishes are met following your death, that you make sure you have your Will in place. In your Will, you could choose to leave specific gifts to your loved ones (you can read about the types of gifts you can leave, here), or you may decide to leave a pecuniary legacy (or a sum of money) to a charity. Whatever your choice, make sure that you put it in writing in your Will so that your wishes are put into effect when your executors are dealing with your estate.
Our fixed-fees for Will writing are £110.00 plus VAT for a single Will, and £195.00 plus VAT for mirror Wills (normally the term used when a married couple or partners make a Will).
You can contact our team on 01772 783 314 or email wills@mglegal.co.uk to get the balling rolling.
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