Why making a will becomes even more important from 26 July 2023

This month the government is changing the ‘statutory legacy’ sum from £270,000 to £322,000, which means if a person dies without a will, in addition to being entitled to their personal effects, their spouse or civil partner will automatically receive up to £322,000 worth of assets from the deceased’s estate, with the remaining sum split 50/50 between the surviving spouse/civil partner and any children.

If there are no children then the surviving spouse/civil partner will automatically inherit everything. But this is only applicable to those who are married or in a civil partnership, and doesn’t include cohabiting couples.

Rebecca Louis, private client partner at law firm Mayo Wynne Baxter, said: “Unfortunately, there are many people who still believe a common law spouse exists, and think that they will automatically inherit everything if their partner dies. This is absolutely not the case – those who are married or in a civil partnership and don’t have a will, will only inherit up to £322,000, plus 50% of whatever remains of their partner’s estate, whereas unmarried couples who don’t have wills in place risk ending up with nothing.

“Getting married is not for everyone, but getting a will should be. Without one, you and your loved ones are unprotected and instead of following your wishes, the distribution of your estate will be determined by fixed rules under UK law.”

For estates worth less than £322,000, the surviving spouse/civil partner will inherit it all. For estates over the new threshold, a split in inheritance could lead to issues for those left behind.

Rebecca added: “If the deceased owned the family home in their sole name, subject to the value, this new statutory legacy threshold could lead to surviving spouses or civil partners being forced to sell the property to release sums due to their children, or including children on the deeds, potentially limiting what the surviving partner can do with the property down the line.

“It’s worth considering that the rules of intestacy use an arbitrary system to prioritise distribution of assets, which is limited to: spouse/civil partner, children, parents, siblings, grandparents, aunts/uncles, and therefore doesn’t take into consideration stepchildren, or other dependents you may have. The only way to guarantee they are included in your estate is to prepare a will.”

With the cost-of-living crisis and an increasing number of second marriages, blended families and unmarried couples, an estate that is distributed under intestacy (without a will) is more vulnerable to costly challenges and claims from dependents, or those who were given promises of inheritance.

Nick Stockley, contentious probate expert at Mayo Wynne Baxter, said: “We’re seeing more and more disputes based on broken promises and involving second marriages. Children often feel aggrieved if the home they grew up in is left solely to their step-parent. We also see situations where surviving cohabiting partners can be forced to effectively challenge these intestacy rules by bringing a claim against their late partner’s estate, if the alternative is losing half of their home to their deceased partner’s children”.

“With all this in mind, it is critical for families both to understand the legal position and have an open and honest discussion with their loved ones while still alive to avoid any confusion and financial misunderstanding when they eventually die. All too often the cases we deal with arise from either a lack of communication, a general misunderstanding or incorrect understanding of the law any of which can leave people without money they were depending on.”

For more information, please visit: www.mayowynnebaxter.co.uk/