New Limits on Intestacy Legacies 1 February 2009

10 December 2008

What happens if I die without leaving a Will?

The new rules, shortly to be introduced to determine who inherits when a person dies without making a Will could affect the 65% of the population that consider that making a Will just isn’t that important. The financial hardship, not to mention damaged family relationships, that can result in the absence of a proper Will should dissuade most from allowing themselves to die intestate.  For those who remain un-persuaded it is important that they are at least aware of what will happen to their estate on their death.  They should also be aware that some of their assets (typically jointly owned assets, pension pots and life assurance policies written in trust etc) will not necessarily pass in accordance with the new rules. Proper legal advice is imperative.

New Limits on Intestacy legacies.

If somebody dies without leaving a Will they are said to die Intestate. Their estate is then distributed in accordance with strict statutory rules. Statutory legacies are paid to surviving spouses or civil partners and the amount received depends on whether or not the deceased is survived by children (or their children); by parents or by brothers and sisters (or their children).

It has been announced that the statutory legacies will increase from 1st February 2009 as follows:-

• Where the deceased is survived by a spouse/civil partner AND children the level is increased to £250,000. (from £125,000)
• Where the deceased is survived by a spouse/civil partner AND parents or siblings but NO children, the level is increased to £450,000. (from £200,000)

Where the value of the deceased’s estate falls below the levels above, it will pass completely to a surviving spouse/civil partner.

Where the value of the deceased’s estate exceeds the new limits, the rules on distribution are summarised below:-

Where the deceased is survived by a spouse/civil partner AND children:-

• The surviving spouse/civil partner takes the personal chattels AND from 1st February 2009 the first £250,000 together with a life interest in half of the remainder.
• The other half of  the remainder passes to the children of the deceased equally (and is paid out to them when they reach 18). The half  held on life interest for the surviving spouse/civil partner is also divided equally between the children when the survivor later dies.

Where the deceased is survived by a spouse/civil partner and NO children but parents or siblings:-

• The surviving spouse/civil partner takes the personal chattels AND from 1st February 2009 the first £450,000 and half of the remainder
• The other half of  the remainder passes to the parents of the deceased equally or, if they have died previously, to the siblings of the deceased ( or their children) equally.

Where the deceased is survived by a spouse/civil partner and no children, parents or siblings:-

• In this case the surviving spouse takes everything.

Where the deceased is survived only by children:-

• In this case the children take everything between them equally.

Where the deceased dies with no spouse/civil partner and no children:-

• In this example it is necessary to follow a strict list of other relatives in order to determine who takes. In the event that no relatives are found the estate passes in full to The Crown.

Whilst the increases to the legacy limits are a positive change, it is clear from the examples given above that the best thing you can do to make sure your loved ones are properly protected after your death is to make a Will.

You might think that you don’t need to especially as the limits have increased but what happens if you and your spouse/civil partner and children all die in a nasty accident? Do you want your relatives to take it all? Who’s relatives would take in that case? Would it be  yours or your spouse’s/civil partner’s?

It is not an ideal situation to leave your estate in the hands of the gods as you can easily envisage your estate passing to people you would not choose to leave it to. You should therefore make the decision to write your will. We understand that It is a difficult thing to do but  we cannot stress enough how important. We do try to make the experience as easy and straight forward as possible so why not make an appointment to discuss matters with us in more detail? You will be surprised at how relieved you will feel once you have done so.

For more information contact Nicola Rostron on 01227 763939.

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