Understanding the concept of statutory legacy is crucial for individuals who want to ensure that their loved ones are provided for in the event of their death. By having a clear understanding of the applicable laws and regulations, individuals can make informed decisions regarding estate planning and will creation, tailoring their inheritance arrangements according to their specific preferences.
What is Statutory Legacy?
Statutory legacy refers to the minimum amount of inheritance that is guaranteed by law to specific individuals when someone dies intestate, meaning without a valid will. In the absence of a will, the statutory legacy determines the portion of the deceased person's estate that is automatically awarded to certain family members.
The purpose of the statutory legacy is to provide financial security to the deceased person's immediate family members, usually the spouse or civil partner and children. It ensures that they receive a minimum share of the estate, even if the deceased did not make any specific provisions for them in a will.
The specific rules and regulations regarding statutory legacy vary from one jurisdiction to another. The laws of each country or state define the statutory entitlements based on factors such as the size of the estate, the marital status of the deceased, and the presence of children.
Statutory legacy often takes into account the surviving spouse or civil partner's entitlement first, ensuring they receive a certain portion or percentage of the estate. The remaining portion, if any, may be distributed among the children or other family members according to the laws of intestate succession.
It is important to note that statutory legacy serves as a default provision in the absence of a will. If the deceased person has made a valid will, their wishes regarding the distribution of their estate will take precedence over statutory entitlements.
The Changes in Statutory Legacy
The statutory legacy for married couples, or those in a civil partnership, is determined under the intestacy rules outlined in the law. These rules dictate how an estate is distributed when someone dies without a valid will.
Prior to 1st October 2014, the statutory legacy for married couples in the UK was £250,000 (in England and Wales) or £200,000 (in Scotland), along with personal possessions. Anything above these amounts would be divided between the surviving spouse or civil partner and any children or other eligible relatives.
The government periodically adjusts the amount that partners can inherit to keep up with the consumer price index and, as of 6th February 2020, the figure was increased again to £270,000.
Under these new amounts, this means the surviving spouse or civil partner would now inherit the following:
- The personal possessions of the deceased
- The first £270,000 of the estate
- Half of the remaining estate
The other half of the remaining estate would be distributed among the surviving children or, if there are no children, other eligible relatives according to the rules of intestacy.
In Scotland, the rules for statutory legacy differ. As of September 2021, the statutory legacy for a surviving spouse or civil partner in Scotland is £473,000, including personal possessions. Anything above this amount would be divided between the surviving spouse or civil partner and any children or other eligible relatives.
Does Statutory Legacy Work for You?
Depending on one's viewpoint and circumstances, this alteration can present certain challenges. As a surviving spouse, it means that you may not inherit the entirety of the estate, while as a child, it signifies that all your parent's assets could pass to a new spouse, leaving you with no inheritance. This underscores the importance of creating a will, as it helps prevent a sorrowful situation from turning into a complicated one.
Many individuals are unaware that unmarried partners and close friends cannot inherit under intestacy laws. Therefore, it is important to create a legally valid will with the assistance of a knowledgeable solicitor to ensure that one's estate is distributed according to their wishes, removing potential complications for loved ones during the grieving process.
Although the rise in the statutory legacy amount is positive, it should not dissuade individuals from making a will. If the total value of the estate passing under intestacy exceeds the Statutory Legacy, the remaining estate will be divided equally between the spouse and the children, with the children's share held in trust.
Make Sure You Update Your Will
The statutory legacy rules have an impact on individuals who are considering making a will. Understanding these rules is crucial for married couples or those in a civil partnership who want to ensure their wishes are reflected in the distribution of their estate. Here's how the statutory legacy in the UK relates to making a will:
Intestacy Rules
If you pass away without a valid will, your estate will be distributed according to the intestacy rules, which include the statutory legacy provisions. These rules determine how your estate will be divided among your surviving spouse or civil partner, children, and other eligible relatives.
Deviating from Statutory Legacy
By making a will, you have the opportunity to deviate from the statutory legacy provisions and tailor the distribution of your estate to your specific wishes. For example, you can allocate a larger portion of your estate to your spouse or civil partner or make specific provisions for children, stepchildren, or other beneficiaries.
Protecting Your Spouse or Civil Partner
While the statutory legacy provides a certain level of protection for your spouse or civil partner, making a will allows you to go beyond the minimum requirements. You can ensure that your spouse or civil partner receives a more substantial share of your estate or provide for them in other ways, such as establishing a trust to support their financial needs.
Including Non-Married Partners
The statutory legacy rules primarily apply to married couples or those in a civil partnership. If you are in a long-term cohabiting relationship but are not married or in a civil partnership, your partner may not automatically inherit from your estate under the intestacy rules. Making a will is particularly important in such cases to ensure your partner is provided for according to your wishes.
Expressing Your Intentions
By making a will, you have the opportunity to clearly express your intentions and desires regarding the distribution of your assets. This can help prevent misunderstandings or disputes among family members or other potential beneficiaries after your passing.
Seeking Professional Advice
When making a will, it is advisable to seek professional advice from a solicitor or a qualified legal expert who specialises in wills and estates. They can guide you through the process, ensure your will is legally valid, and help you navigate the statutory legacy rules to align your estate distribution with your wishes.
For legal support with your will or help understanding how statutory legacy affects you, contact our expert solicitors today. Send us an email at info@witansolicitors.co.uk.
