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New Statutory Legacy Announced

If you die without a valid Will, this is called dying intestate. If you die intestate, the government, through statute, sets out how your assets be divided. The Society of Will Writers has a handy flow chart to show how these rules work and who will benefit: 




As you will see, if you are married/in a civil partnership AND you have children, the amount your spouse inherits is decided by law, you have no say in this. (The Inheritance and Trustees Powers Act 2014)


The amount that your spouse is entitled to from your estate is called the Statutory Legacy.

It has been announced today, 15th of January 2020, that the Statutory Legacy is going to rise from £250,000 to £270,000 on the 6th of February 2020.


Therefore, the above flow chart is now incorrect.


A real life example- Mr Jones, married 2 children and NO WILL:


House- owned as tenants in common with Mrs Jones- £250,000 (50% owned by Mr Jones)

A joint bank account with Mrs Jones- £10,000

Mr Jones- Premium Bonds- £50,000

Savings- £150,000

Stocks and Shares- £60,000


Total value of Mr Jones estate= £395,000


If Mr Jones passed away on the 10th of January 2020, his family would inherit as follows:


Mrs Jones:


£10,000 from the joint account, as this (usually) passes automatically on death.


£250,000- Statutory Legacy


£67,500- half of the what is left (£395,000 - £10,000 -£250,000 = £135,000 ÷ 2 = £67,500)


Total for Mrs Jones = £327,500


The Children of Mr Jones


£33,750 each.


If Mr Jones passes away on 7 February 2020, his estate would be divided as follows:


Mrs Jones:


£10,000 in the joint account, as this (usually) passes automatically on death.


£270,000- Statutory Legacy


£57,500- half of what is left (£395,000 - £10,000 - £270,000 = £115,000 ÷ 2 = £57,500)


Total for Mrs Jones = £337,500


The Children of Mr Jones


£28,750 each.


Conclusion


As you can see, the intestacy rules do not allow you to choose how your estate is distributed. The only way that you can do this is via a Will.


Make a Will today to make sure that your are in control of who inherits from your estate.

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