Intestacy: Something That Should Not Be Forgettable

Half of UK adults do not have a will, according to research undertaken earlier this year. More surprisingly, even among those aged 55 and over, a third have not made a will. If your clients fall into the no-will category, then what happens to their estates will be governed by the intestacy laws, which are different for Scotland and Northern Ireland from those applying in England & Wales. These laws may not distribute their estates in the way that they – or their potential beneficiaries – would expect.

A sad saga of intestacy rules in England & Wales

The rules for intestacy in England & Wales, like those in other parts of the UK, specify cash amounts for a surviving spouse or civil partner if the deceased leaves children or other surviving issue (e.g. grandchildren). Unlike the Scottish and Northern Irish versions, the English and Welsh intestacy rules have a legislative mechanism to increase the cash amount if prices have risen above 15% since the previous adjustment. At least, that is the theory.

In practice the law requires the Lord Chancellor to set the necessary legislation in motion within three weeks of the CPI increase crossing the 15% threshold. This should have meant that there was a statutory order implementing an increase in early December 2022. Somehow the Lord Chancellor and Ministry of Justice overlooked this requirement, and the necessary change did not take place until 26 July 2023, by which time the amount was raised by over 19%.  

A surviving spouse or civil partner is now entitled to the first £322,000 of the estate (previously £270,000) plus half of any balance where there are surviving children/issue. However, there has been no adjustment for deaths that occurred during the seven-months overlook period.

If your clients do not have an up-to-date will, then they are delegating the distribution of their estate to legislation which, as the Lord Chancellor may well agree, is not at the forefront of Government attention.