When a person dies without a valid Will, their property must be distributed according to the rules of intestacy.
If you are married or in a civil partnership and you have children, your spouse or civil partner will receive your personal possessions, the first £270,000 of the estate and half of the remaining estate. The surviving children will receive the other half of the remaining estate.
The amount of £270,000 is often referred to as the Statutory Legacy sum.
The government has recently announced that the Statutory Legacy sum will increase to £322,000 from 26 July 2023.
The current Statutory Legacy sum of £270,000 was set in 2020 and was due for review by 2025. An earlier increase is in response to the inflation rate increasing by more than 15% from the base rate applicable at the time when the Statutory Legacy was previously set.
Further to the increase to the Statutory Legacy sum, and with the average UK house price in March 2023 being £285,000, for modest estates it is more likely to result in the assets being solely inherited by the surviving spouse or civil partner.
Please note that there is no provision for co-habiting couples under the intestacy rules. There is also no provision made for certain family members and close friends.
Whilst the increase to the Statutory Legacy sum is welcomed, to ensure your estate passes in accordance with your wishes, the best advice remains to have a valid Will in place.