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Looking at the impending law change on inheritance



What’s happening?


From 06 February 2020 the amount someone receives should their spouse or civil partner die intestate is set to increase.


What does this mean?


If someone dies without having made a Will, they’re deemed to have died intestate and the distribution of their estate is determined by the Intestacy Rules (“the Rules”). Under the Rules currently, where there are children the spouse or civil partner of the deceased inherits the first £250,000 of the deceased’s estate plus any personal belongings, with anything left over after that then split equally between the spouse and the children of the deceased.


Okay, so what’s changing?


From next month, the amount the spouse or civil partner receives is set to increase from £250,000 to £270,000. The rest of the distribution remains the same, with the spouse or civil partner still receiving all personal belongings plus half of whatever else is left.


This is a good thing, then?

Yes, this increase is very much welcome albeit perhaps somewhat overdue as it had originally been expected to increase back in October 2019. This is because there’s a statutory instrument which requires the government raise this amount in line with the consumer price index every five years and the previous increase was made back in October 2014. The government however, as you may recall, was a little preoccupied at the back end of last year, what with the impending election - hence why this is only coming in now.


It is however also worth pointing out that this increase only applies where there are children. Where the deceased didn’t have any children, their spouse or civil partner still inherits their entire estate. It also doesn’t apply to unmarried couples or cohabitees where the Rules continue not to make any provision for them. 

So what’s next?


Well first off this latest increase is expected to apply for the next five years, whereupon the government will then increase it again. This is unless there are any wholesale changes to the Rules between now and 2025.


That notwithstanding, the biggest detail to take away from this is the importance of having a Will. It’s just the fact remains that under the Rules, estates are rarely distribute as people would have intended and can bring about a whole raft of problems that could otherwise have been avoided had there been a Will.


Contacting us


If you have any questions regarding this article or how it might affect you or your loved ones, please don’t hesitate to contact us. Similarly if you’d like to look at getting a Will, please do get in touch.


Article Date: 17/01/2020

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