The intestacy rules for England and Wales have been amended.
The intestacy rules automatically apply to the distribution of estates where there is no will. There are three different sets of rules in the UK: one for England and Wales, a similar set for Northern Ireland and a much more different set for Scotland.
The rules for England and Wales have just received a slight modification, with the change made highlighting an aspect of intestacy of which many people are unaware: a surviving spouse or civil partner does not always inherit all of their deceased husband, wife or civil partner’s estate.
Up until 5 February 2020, the English and Welsh rules said that if the husband, wife or civil partner of the deceased survives 28 days, and the deceased had issue (broadly, children and their lineal descendants), then:
- The surviving spouse would receive:
- The personal chattels of the deceased (car, clothing, jewellery, etc);
- £250,000 outright; and
- One half of the residue of the estate.
- The issue would receive the other half of the residue.
From 6 February 2020, the £250,000 figure was increased…to £270,000.
Adding £20,000 to the outright inheritance does little to solve a problem that some families potentially face in dealing with the family home.
If the property is not owned in joint names (as joint tenants), then a survivor may not inherit the family home outright. In some cases, intestacy can even mean that there is an inheritance tax bill to meet on first death, something most estate planning aims to avoid.
One other important fact to note about intestacy is that it deals only with married spouses and civil partners and relations. If you live as a couple but are not married or in a civil partnership, intestacy could leave the survivor with nothing.
The message is clear: if you have not made a will, make one. And if you have made one, make sure you know where it is and that it is up to date.
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The Financial Conduct Authority does not regulate will and estate planning.
Quilter Financial Planning are not responsible for any Will writing advice given.