Increase in the Statutory Legacy
16th August 2023 by Alison Lloyd
The government has raised the amount a spouse or civil partner can inherit if their partner dies without making a Will.
As of 25 July 2023, the statutory legacy figure has increased from £270,000 to £322,000. We take a look at what this means and how the government arrived at the new sum.
What happens if you do not make a Will?
If someone dies without making a Will, their estate is said to be intestate, or without heirs. The Rules of Intestacy set out who is entitled to inherit in order of preference. These rules were introduced in the Administration of Estates Act 1925 (the Act) and amended in 2014. The amendments aimed to modernise and simplify the law and create a fairer system.
If the deceased leaves a spouse or civil partner, the partner is entitled to inherit the statutory legacy sum, previously £270,000 and now £322,000. In addition to this, they will inherit all of the deceased’s personal possessions.
If the deceased had children, then the remainder of the estate is divided into two. The spouse or civil partner will inherit one half along with the statutory legacy sum, and the children will share the other half equally. This often means that the spouse or civil partner will inherit substantially more than the children.
Where the deceased was not married or in a civil partnership, the children will share everything. If the deceased did not have children, the spouse or civil partner will inherit everything.
If the deceased did not have a spouse, civil partner or children, then the next relatives to inherit, in order of priority are parents, siblings then nieces and nephews.
Why has the statutory legacy sum been increased?
The statutory legacy was originally introduced to protect the interests of a surviving spouse but to balance these against the interests of the deceased’s children.
The 2014 amendments to the Act require that the statutory legacy sum is reviewed periodically to take into account inflation, with a minimum review period of every five years. The new figure is calculated with reference to the Consumer Price Index, looking at the change from the date of the previous review to the most recently available figure.
The previous figure of £270,000 was set in January 2020, meaning a review would be needed by January 2025. However, the legislation also allows that where inflation increases by 15% or more from when the figure was last set, the government is required to review it at that point.
It must either increase the figure in accordance with the Consumer Price Index or, if it wishes to use a different method of calculation, seek Parliament’s approval.
In December 2022, the Consumer Price Index had increased by 15.023% since November 2019, the month used to calculate the January 2020 increase. Although the inflation figure fell in January 2023, it rose again in February. The government reviewed the situation and decided to set the new rate in accordance with the most recent Consumer Price Index figure available at the time.
The increase was 19%, and the legislation required it to be rounded up to the nearest £1,000. This meant an increase of £52,000, taking the statutory legacy figure from £270,000 to £322,000. Accordingly, the Lord Chancellor has set the new figure at £322,000 as of 25 July 2023.
Contact us
If you are thinking of making a Will or need to amend an existing Will please contact a member of Laceys Wills, Probate Trusts and Tax team on 01202 377984 and we will be happy to help.
Alison Lloyd
Partner — Private Client
Direct dial: 01202 377963
Alison is head of our Private Client team specialising primarily in Estate Administration and Powers of Attorney.
She has undertaken private client work for over 25 years in the local area, since qualifying as a Chartered Legal Executive in 1998. Prior to moving to Laceys in 2023, she headed up a very successful dedicated Probate team within a large corporate environment dealing with a wide range of estates and intestacies from the very straightforward to the more complex and high net worth estates.
Alison adopts a sympathetic and patient approach to a family’s needs at what can be a very emotional time. She prides herself on being efficient and professional but friendly and approachable at the some time.
Outside of the office Alison is married with a teenage daughter and enjoys cooking, reading, spending time with family and friends and foreign travel.
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