According to the UK Government, a new Statutory Legacy of £322,000 has been set through a Statutory Instrument. This fixed net sum will come into effect on 26th July 2023.
The Statutory Legacy determines the amount of money that a surviving spouse or civil partner is entitled to receive from the estate of a person who died without a will but with children.
The Statutory Legacy is a specific amount of money, currently set at £270,000. This amount is given to the surviving spouse or civil partner of a person who dies without a will but has children. The surviving spouse or civil partner is entitled to receive the Statutory Legacy first from the estate, before the remaining assets are divided among others.
The applicable legislation, the Administration of Estates Act 1925 (the Act), was amended in 2014 to implement most of the reforms recommended in a 2011 Law Commission report, Intestacy and family provision claims on death. It sought to modernise and simplify the law to create a fairer and more comprehensible set of rules, and to make the process of administering an estate faster and easier for people during a difficult and emotional time.
Why has the sum been increased?
The Statutory Legacy sum has been increased for several reasons. Firstly, the increase aims to provide surviving spouses and civil partners with greater financial security. Additionally, the increase in the sum reflects changes in the cost of living and ensures that the amount received is more in line with current economic conditions.
The Statutory Legacy sum is reviewed every five years or when the inflation rate rises by 15% or more from the base rate used in the previous calculation. This triggers a review by the government, which then determines the new sum based on the current economic factors.
This trigger point was reached in December 2022 when the Consumer Price Index (CPI) for November 2022 was published showing an increase of 15.023% over the CPI.
It is important to note that the increase in the Statutory Legacy sum benefits surviving spouses and civil partners who have children. This ensures that families are provided with a sufficient amount from the estate when the deceased dies intestate (without making a Will).
Having undertaken a review, the Government has decided that the most appropriate approach to expedite the matter and provide certainty for families affected is to set a new rate linked to the latest inflation rate represented by the change in the CPI.
How we can help
It is highly recommended to create a will with the assistance of a legal professional. A will allows you to specify your beneficiaries, distribute your assets according to your wishes, and provide for individuals.