Financial advisors recommend that savers and investors establish a will and ensure it is kept up to date. However, a recently discovered lapse from the UK’s ministerial department, the Ministry of Justice (MOJ) has highlighted how critical this guidance can be.
The lapse in question involved an important intestacy limit, set to increase in December last year. However, due to an oversight, its timing was missed until July of this year, with the potential impact of leaving many beneficiaries worse off.
Back in November 2022, the consumer price index (CPI) automatically triggered an increase clause. However, the MOJ failed to notice. The overdue increase didn’t take effect until seven months later, and the MOJ offered no reference to its error when it issued the higher limit.
A spokesperson for The House of Lords Secondary Legislation Scrutiny Committee described the departments mistake as inexcusable and a breach of the law. It added that estate beneficiaries could have received substantially lower amounts than they were entitled to.
When no will is present, UK intestacy rules state that upon a person’s death, the surviving civil partner or spouse is entitled to their personal assets, along with the value of their residual estate or a fixed amount, plus half of the residual estate, whichever is less.
Experts like wealth management don’t just help clients with financial planning in Chester, London, and other cities, but with estate planning as well. While getting a will is the first step, financial managers can help ensure more of a person’s wealth is passed on to their beneficiaries, without impacting their income in retirement.
