The Government has announced a change to how an estate is divided should somebody die without a Will.
Currently, if a married person (or person in a Civil Partnership) dies without a Will, the law states that the first £270,000 (known as the Statutory Legacy) passes to the surviving spouse, with any additional amount divided between the surviving spouse (50%) and any children (50%). The Government has confirmed that the amount of the Statutory Legacy will increase to £322,000 on 26 July 2023.
The Statutory Legacy was changed in 2020 and would not normally be due for review so soon. However, the Government decided that, following the unexpectedly high increase in the inflation rate, the figure should be increased early. The average price of a house in England and Wales in April 2023 was £286,489 and the change ensures that, if an ‘average’ house is owned in the sole named of one spouse, it will pass to the surviving spouse outright on death.
There are still more people in the UK without a Will than with one. Recent research conducted by Solicitors for the Elderly (SFE) for Update your Will Week 2023 also found that only 56% of UK adults have updated their Will within the last five years, meaning around a half of Wills are out of date. The same research found that more than 7 out of 10 parents in the UK have no legal guardian in place to care for their children in the event of their deaths – another vital reason not to delay putting a Will in place.
Whilst the change to the Statutory Legacy is welcome, it remains very important that married couples take advice and prepare Wills appropriate for their circumstances. This is especially important where one or both spouses have assets in excess of £322,000, and they do not want part of their estate going directly to young children after one of them dies. This may be especially important for parents of a disabled child where receiving an inheritance may put their means-tested benefits at risk.
It is important to remember that the Statutory Legacy does not apply to co-habiting unmarried partners. If you are in that position, it is vital that you take advice and prepare appropriate Wills.
How can we help?
At Renaissance Legal we are keen to raise awareness of the risks involved of not having an up to date Will.
Get in touch with us today to discuss your personal circumstances and make sure your loved ones are looked after in the future and that your wishes are communicated when you die.