Changes to Statutory Limits on Intestacy – but are they sufficient?

When you die without leaving a will, this is known as "dying intestate". People often mistakenly believe that if they die intestate, all their property will pass to their surviving spouse or civil partner. However this is not always the case and in some circumstances the survivor can end up sharing the estate with other members of the family.

If you die leaving a spouse or civil partner, then the survivor becomes entitled to what is known as a "statutory legacy".

Up until 31 January 2009, the position was as follows.

If you died leaving a spouse or civil partner and a child or children, the survivor would be entitled to the first £125,000 of your estate. Anything over that sum was divided in two. A one half share would be put into a Statutory Trust with the income being paid to the survivor for his or her lifetime. On the survivor's death, the capital of the trust would pass equally between the children, once they each reached the age of 18 years. The other one half share would pass to the children straight away, or be held in trust until they each reached the age of 18 years.

If you died without leaving children, then the survivor would entitled to the first £200,000 of your estate. Anything over that sum was divided in two. The survivor would be entitled to a one half share absolutely. The other one half share would pass equally between your parents, but if both had died, then equally between your brothers and sisters. Again, if any of your siblings had died, then their share would pass onto their own children when they each reached the age of 18 years.

It is worthwhile remembering that the survivor would also receive your personal chattels, e.g car, jewellery and items of personal and household use.

From 1 February 2009, the position is as follows.

If you die leaving a spouse or civil partner and a child or children, the survivor will now be entitled to the first £250,000 of your estate. Anything over and above that sum will be dealt with as set out above.

If you die leaving a surviving spouse or civil partner, but no children, the survivor will now be entitled to the first £450,000 of your estate. Again, anything over and above that sum will be dealt with as set out above.

Although these changes go some way to dealing with the problems which arise if you die intestate, our advice is similar to that of  the Justice Minister, Bridget Prentice.

"Don't leave it to chance. Make sure your loved ones are properly provided for by leaving a will"

For further information, contact the Private Client Department at Dunn and Baker.