Under the current intestacy rules, if a person dies without a Will (known as dying intestate) leaving a spouse and children, the spouse will inherit £250,000 plus 50% of the remaining financial assets with the other 50% being inherited equally by the children.
The Government is keeping its promise to update the intestacy rules and the Law Society of England and Wales has welcomed the recent announcement that the statutory legacy figure for spouses is to increase from £250,000 to £270,000 from 6 February 2020.
However, Dean Wilson LLP’s private client department would emphasise that the arbitrary figure of £270,000 may be unsuitable for many families and may have far reaching consequences.
An obvious problem is that the surviving spouse may be left with insufficient funds but, in addition to this, problems often arise due to the fact that the deceased spouse’s main asset is usually their share in the matrimonial home. This may result in the children of the deceased acquiring a share of the matrimonial home which can be an unnecessary administrative burden but also opens up the risk of the surviving spouse losing their home. Probate disputes may result in the home being sold to pay the inheritance to the children or may be because, for example, the deceased’s child is going through a divorce and the spouse’s home may be considered an asset in the financial dispute.
Matters become particularly complicated where there are children from previous relationships or where the estate exceeds the nil rate band (currently £325,000).
It is therefore advisable to ensure you have an up to date Will which reflects your wishes and takes account of your family’s needs were you to pass away. Wills can also ensure that your estate is being passed to your loved ones in the most tax efficient way.
If you would like to discuss your needs for Wills or tax planning advice, then please contact Paul Green at firstname.lastname@example.org or 01273 032317.