The Impact Of New Intestacy Rules On Statutory Legacies
How Will Your Assets Be Distributed If You Don’t Make A Will?
The rules of intestacy are the legal guidelines governing the distribution of assets when someone passes away without a valid Will.
Recently, on 26 July 2023, the UK Government made noteworthy amendments to these rules, particularly concerning the statutory legacy for surviving spouses or civil partners.
While the increased statutory legacy offers enhanced financial security, it might not encompass the entirety of your estate, leading to unintended consequences for your heirs.
In this blog, we explore what these changes mean for you and your family and discuss essential steps you can take to ensure your loved ones inherit your assets according to your wishes.
What Are The Rules Of Intestacy?
Intestacy rules, also known as the rules of intestate succession, dictate how your estate will be distributed in the unfortunate event that you pass away without a valid Will.
These rules ensure that your assets are passed on to your surviving family members, but they may not align with your personal wishes.
On 26 July 2023, the UK Government introduced significant changes to these rules that could substantially impact your loved ones’ inheritance.
What Is The Statutory Legacy Under The Rules Of Intestacy?
One of the most significant changes to the rules of intestacy pertains to the statutory legacy for the surviving spouse or civil partner.
Before the update, this amount stood at £270,000. However, with the new intestacy rules, the statutory legacy has been increased to £322,000.
This adjustment provides the surviving spouse or civil partner with greater financial security. But it’s essential to understand that it may not encompass your entire estate, especially if you have children or more remote descendants you wish to include.
The statutory legacy essentially represents the fixed sum of money the surviving spouse or civil partner is entitled to inherit from the deceased’s estate when there is no valid Will.
It is meant to secure the surviving spouse’s or civil partner’s financial well-being and ensure they are not left without adequate resources.
What Does This Mean For You?
The increase in the statutory legacy is undoubtedly a positive development in providing financial security to your spouse or civil partner.
However, it may not necessarily reflect your wishes for the distribution of your assets.
The primary concern arises when you have children or more remote descendants who might have expected to inherit a portion of your estate.
Under the new intestacy rules, the statutory legacy might consume a significant portion of your estate, potentially leaving less for your children or other beneficiaries.
This outcome can be quite different from what you may have intended, and it highlights the importance of creating a well-thought-out and legally binding Will.
How Can You Ensure Your Loved Ones Inherit Your Assets?
To ensure that your loved ones inherit your assets according to your wishes and preferences, having a valid and professionally drafted Will is crucial.
Here are some key reasons why making a Will is essential:
- Distribution According to Your Wishes: A Will allows you to specify precisely how you want your assets to be distributed. You have control over who receives what, and you can make provision for loved ones who may not be included under the intestacy rules.
- Executor Appointment: You can choose who you want to appoint as your executor(s) in your Will. This ensures that the person you trust will manage your estate affairs efficiently and in accordance with your instructions.
- Funeral Arrangements: Your Will can include specific instructions about your funeral arrangements, providing peace of mind to your family during a challenging time.
- Guardianship for Children: If you have young children, a Will allows you to appoint guardians of your choice. This ensures that your children will be cared for by individuals you trust should anything happen to you.
Summary
In conclusion, the new intestacy rules, particularly the increase in the statutory legacy, can impact how your assets are distributed if you die without a Will.
To safeguard your loved ones’ inheritance and ensure your estate is distributed according to your wishes, creating a professionally drafted Will is crucial.
Whether you want to draft a new Will or require assistance with an intestate estate, our Private Client team at Bennett Griffin LLP is here to help.
Please do not hesitate to get in touch, and we will be pleased to discuss your specific requirements and provide the guidance you need.