UK Government Increased Statutory Legacy to £322k
The UK government has implemented changes to the statutory legacy. A statutory legacy refers to the fixed sum of money given to the surviving spouse or civil partner of an individual who passes intestate. Effective from 26 July 2023, this alteration raises the statutory legacy amount to £322,000. This significant update has substantial implications for individuals and families involved in estate planning.
When an individual passes away without a valid will they are considered to have died intestate. In such cases, statutory intestacy rules determine how the assets of the deceased are to be distributed. For those who leave behind both a spouse or civil partner and children, the assets are allocated as follows:
- Previously set at £270,000 in February 2020, surviving spouses or civil partners of the deceased will now receive £322,000 for deaths occurring on or after 26 July 2023.
- The surviving spouse or civil partner inherits all tangible, movable property. This includes personal effects like household furniture, clothing, and jewelry.
- The remaining estate is divided equally into two shares. One share goes to the surviving spouse or civil partner, while the other is divided among the children.
In cases where an individual passes away with a spouse or civil partner but no children, the entire estate transfers directly to the partner, rendering the statutory legacy provision unnecessary. However, when the deceased passes with neither children nor a spouse or civil partner, assets are passed down in the following hierarchy: direct heirs, parents, siblings, half-siblings, grandparents, uncles and aunts, and finally the Crown.
This hierarchy may exclude important people, especially for those who are divorced or who cohabit with unmarried partners. Importantly, the intestacy rules offer little flexibility and do not consider specific family circumstances or more modern relationship structures. To exercise personal agency over your estate distribution, it is essential to create a will that outlines your preferences for posthumous asset allocation. Crafting a will empowers you to designate your chosen heirs, allocate specific assets or monetary gifts, appoint an executor for your estate, express funeral wishes, and even name guardians for any minors.