Is £322,000.00 enough?

As of 26 July 2023, the Statutory Legacy under UK intestacy law has increased from £270,000 to £322,000. This is the amount a spouse or civil partner inherits when their partner dies without a valid Will.

What Does a Spouse Receive?

• £322,000 from the estate
• All personal chattels (belongings)
• Half of the remaining estate
• The other half goes to the children, in equal shares

If the estate is worth less than £322,000, the spouse inherits everything.

This only applies to assets governed by intestacy. Jointly owned property (e.g. beneficial joint tenancies or joint bank accounts) passes automatically and is excluded from the Statutory Legacy calculation.

Unmarried Partners: The Hidden Risk

If you’re not married or in a civil partnership, you are not entitled to the Statutory Legacy, even if you’ve lived together for decades or share children. Legally, you may be treated as a stranger.

You can apply under the Inheritance (Provision for Family and Dependants) Act 1975, but this often involves lengthy and costly legal proceedings.

A Real-World Scenario

Imagine this: You and your partner buy a home. You’re pregnant, not working, and the mortgage is in your partner’s sole name. Tragically, they pass away. The house is now legally owned by your infant child. You may need to take your own child to court to manage the property. And that’s before considering any Inheritance Tax liability.

Even Married Couples Face Challenges

1. Inheritance Tax (IHT): Assets passed to a spouse are IHT-free, but those passed to children may be taxed, even unintentionally due to intestacy rules.
2. Property Ownership Issues: With London homes often exceeding £500,000, a surviving spouse may only receive part of the property. If children are minors, court involvement is required. If they’re adults, disputes may arise—including forced sale orders.
3. Third-Party Risks: If a child becomes bankrupt, divorces, or dies, their share may be claimed by third parties, putting your home at risk.

Why Intestacy Laws Fall Short

The UK’s intestacy laws date back to 1925, nearly a century old. They don’t reflect modern relationships, cohabitation, or blended families. If you’re unmarried, you may face:

• No automatic inheritance
• Unexpected tax bills
• Legal battles over property and guardianship

The Takeaway

Whether you’re married or not, relying on intestacy can lead to financial hardship, legal complications, and emotional stress. The Statutory Legacy of £322,000 may not be enough to protect your family or secure your home.

Make a Will. Protect your loved ones. Plan ahead!

Contact our Wills & Probate team for expert advice and a free initial consultation. Nigel George is the Head of Life Planning ngeorge@garner-hancock.co.uk