Government increases the Statutory Legacy to £270,000 so do I still need a Will?
What is the Statutory Legacy?
Intestacy rules decide how the value of your estate is distributed on death if you die without leaving a Will. The Statutory Legacy is an important part of these rules.
Whilst the increase is positive news, our advice is always going to be the same, get a Will in place, to make sure your choices and instructions are followed.
And what about the children?
It isn’t just about the money, if your children under 18 survive you (and if you haven’t appointed Guardians) then the Courts will decide who will bring them up and that usually means foster care. Getting Wills in place is therefore the right decision, a Will deals with the money and the children in one go. If nothing else, you owe it to your children to have a plan in place.
What is the Statutory Legacy and how does it work?
The Intestacy rules set out the order in which the family inherits, and the Statutory Legacy is a relevant part of this depending on your circumstances.
- If the deceased was married or in a civil partnership but didn’t have any children, then the whole of their estate will pass to their surviving spouse/civil partner.
- Where the deceased died leaving children then the statutory legacy becomes relevant. Now, the first £270,000 of the deceased’s estate will pass to the surviving spouse/civil partner together with all their personal belongings, and the remainder of their estate is split with 50% going to the surviving partner and the other 50% being split equally between any surviving children. Think about this for a moment.
What’s wrong with that?
- Foster children and stepchildren do not fall within the definition of children under the intestacy rules and would therefore be excluded from inheriting;
- Cohabiting and unmarried couples are extremely vulnerable if they do not have valid Wills. If one partner dies, the other will not inherit anything under the intestacy rules. Instead the deceased’s relatives will inherit in a certain order;
- There is no provision for friends or charity where you would have otherwise made such gifts in a Will;
- If you are getting divorced, until the decree absolute has been granted, your estranged spouse will inherit some or all of your estate, depending on whether there are children.
Is getting a Will in place difficult and expensive?
Neither really. Yes, there’s a Q&A process and getting some good practical advice from a seasoned practitioner is recommended for obvious reasons.
Having a valid Will allows you to decide who is to benefit from your estate when you die and also allows you to appoint the executors you trust to administer the estate. It can also be a useful tax planning tool, minimising exposure to inheritance tax and if appropriate, protecting a beneficiary’s inheritance from separation or divorce, and protecting a vulnerable beneficiary’s eligibility for state benefits.
A final point, implementing the intestacy rules after death can be complex and time consuming to work out who the beneficiaries are. Dying without a valid Will can make an already difficult situation much more distressing for those left behind, so keep it simple and straightforward, make a Will.
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