An increase to the statutory legacy amount granted to spouses and civil partners under the rules of intestacy was announced in the House of Commons in January.
There had been widespread speculation that the government might fail to keep its promise to update intestacy rules every five years as an update was due last October, but, as of February 6 the amount will be £270,000 – a £20,000 rise.
The increase, which keeps statutory legacy amounts in line with the Consumer Price Index, means that a surviving spouse or civil partner will now stand to inherit all of a deceased’s personal property, as well as the first £270,000 of their sole estate in the event of intestacy. In the event there are children, the remainder of the estate will be split 50/50 between the children and the surviving spouse.
Further changes to the intestacy rules announced aim to protect adopted children so as to ensure their position in inheritance claims, while the definition of who can make a claim to an estate has been expanded to include any person ‘treated as a child of the family’.
What next?
The Inheritance and Trustees’ Powers Act 2014 was a response to a Law Commission Report called ‘Intestacy and family provision claims on death’. It aimed to modernise and simplify the law but in the view of many Wills and probate solicitors it did not go far enough.
Below are two examples of how intestacy can affect family beneficiaries:
(1) John and Peter became civil partners in 2007. They are the adoptive parents of twin girls, Susan and Mary, and live in the family property which is in John’s sole name. John dies in March 2020 without leaving a Will. His total estate i.e his sole-named bank account, his car and the family home, is valued at £670,000. The rules of intestacy mean Peter will receive the first £270,000, plus half of the remainder of the estate; he will therefore receive a further £200,000 while each twin will receive £100,000.
(2) Joanne and Frank had been living together for 18 years, they had one child. Neither Joanne or Frank made a Will. When Frank dies in March 2020, under the rules of intestacy, Joanne could receive nothing, with all of Frank’s estate i.e. any property in his sole name, passing to their child.
Intestacy – always best avoided
When a person does not leave behind a valid Will on death, the rules of intestacy apply to the distribution of their estate.
These rules can be complex and establish a hierarchy of entitlement, beginning with spouses or civil partners and children, running through to parents, siblings, grandparents, aunts and uncles.
However, intestacy rules have still not caught up with societal change. As such, contemporary relationships and family structures are not always accounted for; intestacy rules make no provision for cohabitees, step-children, or long-term companions.
Furthermore, intestacy increases the scope for probate disputes, Inheritance Act claims and all kinds of confusion and contention.
New intestacy rules are no substitute for making a Will
While the increase in the statutory amount is of course good news, the intestacy rule change should not be seen by anyone as a reason to put off making a Will, particularly for unmarried partners and lifelong companions who still stand to inherit nothing under current intestacy laws if their loved one dies without making a Will.
The best way to be sure of avoiding intestacy provisions is to draft a valid Will which clearly and accurately conveys your intensions. You should also ensure that it is updated it whenever needed, for instance if a divorce occurs.
Having a valid and legally enforceable Will, drafted with the help and guidance of a specialist Wills and probate solicitor, remains the very best way of avoiding a whole array of problems for beneficiaries and loved ones when we die.
