New Statutory Legacy Figure Review Overdue
The Lord Chancellor’s review of the Statutory Legacy figure has exceeded the 5 year limit for making an Order to Parliament.
The Statutory Intestacy Rules set out the distribution of an estate where the deceased did not write a Will. Where the deceased person left a surviving spouse or civil partner, children and an estate worth over £250,000 the surviving spouse or civil partner receives a “Statutory Legacy”, personal possessions and an absolute interest in half the remainder; the other half is divided equally between the surviving children. The “Statutory Legacy” was last changed when the Inheritance and Trustees’ Powers Act 2014 came into force on 1st October 2014.
Ian Bond, Chair of The Law Society ‘Wills and Equity Committee’ explains the background to the Statutory Legacy. He said:
“From 1st October 2014 the amount of the Statutory Legacy was set at £250,000 Schedule 1A ‘Determination Of The Fixed Net Sum’.
“The 2014 Act sets out that the Lord Chancellor may make an Order by Statutory Instrument to specify the amount of the statutory legacy at any time but must make an order at least every five years.
“We are now beyond 5 years. Unless the Lord Chancellor otherwise determines, the Statutory Legacy should be increased (but not reduced) in line with the Consumer Prices Index (CPI) rounded up to the nearest £1,000. The Lord Chancellor may set the Statutory Legacy at any amount (including an amount equal to or lower than the previous amount). For the Lord Chancellor to do this, they must report the reason to Parliament and produce a statutory instrument to this effect – the general election put pay to this.
As the new figure was now overdue, prior to the election The Law Society contacted the Lord Chancellor’s office to ask when the new figure will be put in place.
Ian received a response which was that “work is in hand on updating the Statutory Instrument.”
He further added:
“They hadn’t given us a timeline for the new Statutory Legacy’s introduction or the new figure to be used before the election was announced. It will be on the new Lord Chancellors desk to deal with now that the election is over and the new government formed.”
An official spokesperson for The Law Society said of the issue:
“Two-thirds of adults in England and Wales pass away each year without having made a valid Will. When it was introduced the Law Society welcomed the simplification of the rules and introduction of £250,000 Statutory Legacy.
“Currently, the main complaint about the size of the Statutory Legacy appears to be that it is not always sufficiently large to ensure the surviving spouse is able to remain in the matrimonial home. It is now time for the figure to be reviewed and updated. An increase in the level should allow the spouse to receive all or the majority of the estate in most cases. However, this is no substitute for taking proper advice and making an appropriate Will.”
We now wait for Lord Chancellor and Secretary of State for Justice, Robert Buckland, to introduce the Statutory Instrument to bring about the change.