Make A Will – Or Risk Falling Foul Of The Inheritance Limit
Many married couples or those in a civil partnership who have actively chosen not to make a Will do so on the understanding that the law will allow their spouse or civil partner to automatically inherit their whole estate when they die.
A spouse or civil partner will be the first to inherit under the rules of intestacy (the rules that govern who will inherit an estate where there is no valid Will). However if the deceased had children, then the amount a spouse or civil partner will receive is limited to a fixed sum.
Under the current rules of intestacy, a spouse will receive a statutory legacy of £250,000.00 together with half of the remainder. For example, if your spouse or civil partner's estate is worth £500,000.00, you will receive a statutory legacy of £250,000.00 together with £125,000.00, being half of the remaining estate. The other half (£125,000.00) will be divided equally between the surviving children of the deceased on a statutory trust.
This is not the case if there are no children, as in this circumstance, the spouse will receive everything.
When you take into account modern-day house values, life insurance policies and death in service benefits, there are many couples who will fit comfortably into this category.
Now for many, this will be acceptable, but in the cases of second marriages and estranged children, this may be far from ideal. Couples with children under the age of 18 also need to take this limitation into careful consideration.
Bear in mind that Cohabitees are not recognised by law, and therefore will receive nothing unless there is a valid Will.
This fixed sum is set to increase on 6 February 2020 from £250,000.00 to £270,000.00 and will affect deaths occurring after this date.
It may surprise many couples to realise that they will be limited to this fixed sum, which in reality could have a massive impact on a surviving spouse or civil partner.
This is one of the many important reasons to make a Will.
For more information or guidance, please contact our team at hello@jcpsolicitors.co.uk or call 03333 208644.