When a person dies without leaving a valid will, there is a set order in which relatives will inherit their estate which is set out in the Intestacy rules.
There has been a small but significant change made to the Intestacy rules which came into effect on 26 July 2023.
The change affects the position where a person dies and leaves a spouse/civil partner and children.
In that scenario:
- The personal possessions of the deceased pass to their spouse/civil partner;
- A sum called the statutory legacy also passes to the spouse/civil partner; and
- Any remainder of the estate over and above the statutory legacy passes 50% to the spouse/civil partner and 50% on statutory trusts in equal shares for the deceased’s children (or the children of any child who has predeceased the deceased).
The change increases the amount of the statutory legacy from £270,000 to £322,000, meaning that more of a person’s estate will go to their spouse/civil partner if they die without a valid will.
The important points to note from this are:
- Whatever your personal circumstances, it is always advisable to make a will setting out how you wish your estate to be divided when you die. You may not feel that the intestacy rules set out above provide adequately for either your spouse/civil partner or your children.
- The need to make a will is even more important if you are not married but you are cohabiting with a partner. Under the intestacy rules, cohabitees get nothing. Contrary to popular belief, English law does not recognise the concept of “common law” husbands or wives, however long the parties have been together and regardless of any children they may have. If you want your cohabitee to inherit any part of your estate, you need to make a will. The same goes for stepchildren (unless they have been adopted by you).
- It is also key to note that some assets will pass outside of your estate and not be caught by the Intestacy rules. Examples include property which is owned as joint tenants with another person, some joint bank accounts and some pension policies where there has been a non-binding nomination of who is to receive the pension in the event of your death. Legal advice should always be sought on what does and does not form part of a deceased’s person’s estate as it is not always straightforward.
- It is also useful to understand that certain categories of person – most notably spouses/civil partners, children, and cohabitees – can make a claim under the Inheritance (Provision for Family and Dependents) Act 1975 if either an intestacy or a will does not make reasonable financial provision for them.
Read our article, Making a claim against a will, to find out more about making a claim for reasonable financial provision, or contact Clare Mackay on 01727 798025.
