Despite being three months late, the Government has kept its promise to update the intestacy rules every five years. The recent changes have increased the statutory legacy for spouses and civil partners who die intestate from £250,000 to £270,000 in line with the Consumer Price Index.
An individual may die intestate if they:
a. did not make a Will;
b. revoked a Will that they had made, for example by:
c. made an invalid Will.
Where someone dies intestate, the way in which their estate passes is governed by the intestacy rules. This means that the intestate’s Personal Representatives hold on trust all the assets that the Deceased did not dispose of in their Will.
Where the intestate is survived by their spouse or civil partner and their issue (i.e. their direct descendants) their spouse or civil partner will now be entitled to the first £270,000 of the deceased’s estate (the statutory legacy). This has increased from £250,000 for deaths on or after 6 February 2020. The rest of the residuary estate is split equally into two halves – the spouse or civil partner takes one half of the residuary estate and the issue take the other half.
If there are no children, or the estate is worth less than £270,000 then everything passes to the surviving spouse or civil partner.
In certain situations, the consequences of the intestacy rules may be unfair. Whilst the increase in the statutory legacy will be a welcome increase for those facing the unexpected death of a spouse or civil partner, the increase has implications for children and other dependants; this should by no means stop you from making a Will or reviewing any Will you currently have in place.
Making a Will is the best way to combat any unintended consequences of the intestacy rules, as at present, they do not take into account modern relationships and make no provision for cohabitees, step-children or close friends.
For more information on any of the above, or how we can help you, please contact Tom Bridge, or call 0191 232 8345.