Most articles about wills open by telling you to write one. This one opens with what happens if you do not, because the rules are specific enough to be worth reading before you decide how urgent it is.
If you die without a valid will in England and Wales, your estate is distributed under the intestacy rules. They are fixed, they are public, and they take no account whatsoever of what you would have wanted, what you said, or who you actually lived with.
A life insurance payout is usually caught by them, and it does not have to be.
The rules, as HMRC states them
For deaths on or after 1 October 2014, HMRC's manual (opens in a new tab) sets out the position for a surviving spouse or civil partner in England and Wales.
Where there are no children or other descendants, the surviving spouse or civil partner takes the whole intestate estate.
Where there are children or other descendants, the surviving spouse or civil partner takes:
- the personal chattels — personal possessions;
- a fixed net sum, the statutory legacy; and
- an absolute interest in half of the residue.
The other half of the residue is left on statutory trusts for the issue — the children, with a deceased child's share passing to their own children.
The statutory legacy is £322,000, and the internet is out of date
The fixed sum changes periodically. HMRC's table (opens in a new tab) gives the recent history:
| Date of death | Statutory legacy |
|---|---|
| 1 October 2014 to 5 February 2020 | £250,000 |
| 6 February 2020 to 25 July 2023 | £270,000 |
| 26 July 2023 onwards | £322,000 |
This is worth a moment, because it is a good illustration of why a figure needs a date attached. GOV.UK's own policy paper announcing the change still describes £270,000 as the new sum, and a general search returns that number confidently. The current figure is £322,000, and the place to confirm it is HMRC's manual rather than a summary of it.
If you are reading this somewhere that gives £270,000 with no date, the page is at least three years stale — and on this subject, three years is the difference between two quite different outcomes for a family.
What this looks like in practice
Take an estate of £600,000 — a house, some savings, and a life insurance payout that was not written in trust. A surviving spouse and two children.
- The spouse takes the personal possessions.
- The spouse takes the first £322,000.
- The remaining £278,000 is split: £139,000 to the spouse, and £139,000 held on statutory trusts for the two children.
Nothing there is unreasonable. But notice what has happened: a meaningful share of the estate — including part of the life insurance you bought to support your partner — is now legally the children's. If your intention was that your spouse should have everything while the children were young, the law has just decided otherwise, and no one can overrule it.
How the life insurance gets caught — and how it avoids this
A policy on your own life that you own, and that is not written in trust, forms part of your estate. That is HMRC's position, set out in its life policies manual (opens in a new tab): where the deceased is the life assured and owned the policy, the proceeds form part of their free estate.
Which means the payout:
- is added to the estate that intestacy divides up;
- is counted for inheritance tax, charged at 40% above the £325,000 threshold; and
- waits for probate before anyone can touch it.
A policy written in trust does none of those things. It is held by trustees for named beneficiaries, so it passes outside the estate, is not distributed by the intestacy rules, and does not wait for the estate to be administered. The mechanics, the costs and the trust-specific tax rules are covered in why writing a policy in trust matters.
A trust is not a substitute for a will. It solves one asset. The will decides everything else.
How much cover you should be holding in the first place is a separate question, and the method — work out the gap rather than multiply your salary — transfers across borders even though the state benefits in it do not. The worked version is in the US guide; read the arithmetic, ignore the Social Security figures, and substitute what the UK would actually pay your household.
If your insurer fails
A separate worry worth closing off, since it stops people acting.
The Financial Services Compensation Scheme (opens in a new tab) covers long-term insurance — term life, whole of life, critical illness and income protection among them — at 100%, with no upper cap, where the firm failed on or after 3 July 2015. General insurance such as motor, home and travel is protected at 90%, with some compulsory classes at 100%.
Long-term protection is one of the better-protected things you can buy in the UK. Insurer failure is not a good reason to leave a policy unwritten or untrusted.
What to do
- Check whether you have a valid will. If you do not, everything above is your plan, whether you chose it or not.
- Check whether your life policy is in trust. Ask the insurer; most people do not know.
- If you are unmarried and have a partner you intend to provide for, treat both of the above as urgent rather than administrative. Intestacy gives them nothing.
- If you are in Scotland or Northern Ireland, the rules differ — Scots succession law is a separate system and none of the figures above apply. Check your own jurisdiction.
- Revisit after a marriage, divorce, birth or house purchase. Marriage can revoke an existing will; divorce changes how one operates.
None of this requires predicting anything. It requires knowing what the default is, and deciding whether you would have chosen it.
Sources
- HMRC — IHTM12121: intestacy distributions, surviving spouse or civil partner (opens in a new tab)
- HMRC — IHTM12122: intestacy distributions, statutory legacy (opens in a new tab)
- HMRC — IHTM20012: life policies and Inheritance Tax (opens in a new tab)
- GOV.UK — How Inheritance Tax works: thresholds, rules and allowances (opens in a new tab)
- GOV.UK — Who inherits if someone dies without a will (opens in a new tab)
- FSCS — What we cover: insurance (opens in a new tab)
This article is general information for a United Kingdom audience and describes the intestacy rules of England and Wales. Scotland and Northern Ireland have different succession regimes and the figures here do not apply there. It is not financial, tax or legal advice. Succession and inheritance tax rules change, and the outcome for any particular estate depends on its assets, the family circumstances and the terms of any policy or trust. Take advice from a solicitor before relying on any of this. Last reviewed 12 September 2026.
