Law Society Welcomes New Statutory Legacy Figure Increase

The Law Society of England and Wales welcomed the news of The Lord Chancellor’s increase of the statutory legacy figure.

The new statutory legacy sum, which comes into force on 6th February 2020, means that spouses or civil partners with children will be able to inherit £270,000 from intestate estates rather than £250,000 which was the statutory legacy figure set in October 2014.

Late last year, it was reported that the Lord Chancellor’s review of the Statutory Legacy figure was overdue as it had exceeded the 5 year limit for making an Order to Parliament.

As the new figure was overdue, prior to the election in December 2019 The Law Society contacted the Lord Chancellor’s office to ask when the new figure will be put in place. The response received was that “work is in hand on updating the Statutory Instrument.”

Ian Bond, Chair of The Law Society ‘Wills and Equity Committee’ explains the new Statutory Legacy figure increase. He said:

“The Statutory Instrument’s formal title is the Administration of Estates Act 1925 (Fixed Net Sum) Order 2020.

“Essentially, in setting the sum the Lord Chancellor decided to follow the standard methodology in Schedule 1A to the 1925 Act (following the amendments brought in by the Inheritance and Trustees’ Powers Act 2014). As such, this involved calculating and then applying the change in the Consumer Price Index (CPI) from the ‘base month’ (in this case October 2014) to the ‘current month’ – the most recent CPI figure available at the time of fixing the sum (in this case November 2019, published by the Office for National Statistics on 18 December 2019).

“This equated to an increase of 8.1% of the £250,000 sum, with the figure then rounded to the nearest thousand (as required by the Act). This resulted in the increase in the sum being £20,000 and thus the new Statutory Legacy sum of £270,000.”

The Law Society President, Simon Davies commented on the new Statutory Legacy sum and what it will mean for family inheritance:

“If someone dies without making a will – also known as dying intestate – the law determines how much of their estate their partner, children and other relatives will inherit.

“Under intestacy rules, if there are no children, the partner will inherit the entire estate.

“If there are children, partners will inherit all of the deceased’s personal property, the first £270,000 of the estate and half of the remaining estate – the other half will go to their children.”

At least every five years, the government raises the amount partners can inherit in line with the consumer price index.

In October 2014, the amount was set at £250,000 and will be increased to £270,000 from 6th February. This update was originally due in October 2019.

Simon added: “This increase is very welcomed, but many people are unaware that under intestacy laws, unmarried partners and close friends cannot inherit.

“Writing a legally valid will with the help of an expert solicitor ensures people’s estate is inherited exactly as they would choose and can prevent a whole raft of problems landing on loved ones when they are grieving.”

Do NOT follow this link or you will be banned from the site!
X