New intestacy rules for England & Wales have recently been announced, which raise the “statutory legacy” sum to £270,000. The laws of succession have a profound effect on what your loved ones will inherit when you die intestate (i.e. without leaving a valid Will) and it’s important to know that dying without a Will north of the border differs from the rest of the UK. In this article, we will look over the new changes to the intestacy legislation, what happens when you die intestate and automatic entitlement for families.
Coming into force on 6 February 2020 across England & Wales, the new statutory legacy sum – the surviving spouse’s entitlement when their partner dies without a Will and have children – means a spouse will receive at least the first £270,00 from the deceased’s estate. That is £20,000 more than the previous figure set in October 2014.
If you have a Will, you can decide how your assets – such as property and shares – are distributed on your death. However, those who die without making a Will rely on the laws of intestate succession and, in such cases, a set of default legal rules are used to determine who inherits from your estate.
Intestacy rules in Scotland are complex as there are numerous stages that must be carried out in order, with different shares of the deceased’s estate being divided amongst surviving family members.
The first step is to determine what is moveable and heritable estate. The moveable estate includes assets such as money, cars and jewellery, while the heritable estate (sometimes referred to as immoveable property) is any land and buildings owned by the deceased.
Following the separation of assets, the rules of intestacy split the deceased’s estate into prior and legal rights. Prior rights must be satisfied before legal rights can be exercised.
You should be aware that, under current Scots law, prior and legal rights do not extend to unmarried partners or cohabitants. Although cohabitants can make an application to the court for a share of the deceased’s estate, there is no guarantee of success.
In circumstances where the deceased leaves behind a spouse (or civil partner) and children but no Will, prior rights dictate that the surviving spouse/civil partner will inherit:
The prior rights may exhaust the entire estate. If there is any estate left after prior rights, the surviving spouse and children are then entitled to legal rights from the moveable estate of the deceased.
Under these rules, one-third of the estate is given to the surviving spouse, one-third to the children, and one-third is transferred to the ‘free estate’ – a legal term used to describe the remainder of the estate after debts, prior rights, legal rights and any cohabitant’s claims.
If the deceased was survived by a spouse but no children, the spouse will have prior rights to £473,000 of property, £29,000 of furnishings and an entitlement to £89,000 cash. After this, they are entitled to half of the moveable estate under legal rights, with the remainder distributed according to the Succession (Scotland) Act to surviving family members in the following order:
Once a category is determined to have at least one person alive, it’s important to know that no group further down the line will inherit from the estate, e.g. if there is a surviving parent then the surviving spouse or civil partner is not entitled to anything from the free estate.
In those rare cases where the deceased leaves no Will and no beneficiaries from the list above, the entire estate passes to the Crown.
Having a valid in Will in place helps you ensure your loved ones and causes close to you receive the assets you wish from your estate. In contrast, relying on the intestacy rules can put unnecessary stress on your loved ones at a time of grief and increase the costs of administering your estate. To guarantee your estate is distributed in line with your wishes, call us today to write a Will.
Our personal, attentive service coupled with sage, astute and commercially-minded guidance, allows us to build long-term, ongoing relationships with our clients, helping them to protect assets throughout generations. Our highly personal service reflects our culture, which is centred on integrity and trust, and the expert guidance we provide has been designed to be an investment, not an expense.