Definition
A pecuniary legacy is a fixed sum of money that you leave to a specific person or charity in your will, such as "£10,000 to my nephew James" or "£5,000 to the RSPCA."
Unlike leaving specific items like jewelry or property, pecuniary legacies are paid from your general estate funds regardless of how your estate's value changes over time.
What Does Pecuniary Legacy Mean?
Under the Administration of Estates Act 1925, Section 55, a pecuniary legacy is a direction for the payment of money from your estate to a named beneficiary. The term distinguishes monetary gifts from specific legacies (particular items like your watch or car) and residuary bequests (the remainder after all other gifts are paid).
Pecuniary legacies are paid from your general estate—all assets converted to cash—rather than a designated fund. When you write "I give £15,000 to my sister," your executor pays this fixed amount from available funds. Whether your estate grows or shrinks between writing your will and your death, your sister receives exactly £15,000.
Executors must pay pecuniary legacies within the "executor's year"—12 months following your death. If payment is delayed, statutory interest becomes payable from the first anniversary until payment at the rate set by the Court Funds Office (3.19% as of May 2025). For example, if a £25,000 legacy isn't paid until 18 months after death, the beneficiary receives approximately £464 in statutory interest for the six-month delay.
However, pecuniary legacies have important limitations. If your estate lacks sufficient funds after paying debts, taxes, and funeral expenses, legacies must be reduced proportionally through abatement. If David's will leaves £30,000 to his son, £30,000 to his daughter, and £20,000 to charity, but only £60,000 remains instead of the required £80,000, each legacy would be reduced by 25%.
Fixed cash amounts face inflation risk—a £10,000 legacy today will have less purchasing power in 20 years. Solutions include index-linking to the Retail Price Index, percentage-based gifts ("5% of my estate"), or regular will reviews to update amounts.
Common Questions
"What happens if my estate is too small to pay all pecuniary legacies in full?" Abatement applies—each legacy is reduced proportionally. If you leave £20,000 but only £15,000 is available after debts and expenses, your beneficiary receives £15,000, not the full amount.
"Has inflation made the £10,000 I left 15 years ago worth less?" Yes. Inflation erodes fixed cash gifts over time. Solutions include regular will reviews to update amounts, index-linking to the Retail Price Index, or using percentage-based gifts instead.
"My father died 18 months ago but the executor hasn't paid my £25,000 legacy—am I owed interest?" Yes. Statutory interest applies from the first anniversary of death until payment at 3.19% (as of May 2025). For a six-month delay on £25,000, you're entitled to approximately £398 in interest.
Common Misconceptions
Myth: Cash gifts in wills are guaranteed—beneficiaries always receive the full amount.
Reality: Pecuniary legacies can be reduced or eliminated if the estate has insufficient funds after paying debts, taxes, and expenses. Through abatement, all pecuniary legacies are reduced proportionally. Insolvent estates may not pay pecuniary legacies at all.
Myth: Fixed cash amounts are the safest way to preserve the value I intend to give.
Reality: Fixed amounts are vulnerable to inflation, which erodes real value over time. A £10,000 legacy today might have substantially less purchasing power in 20 years. Percentage-based or index-linked legacies often preserve intended value better.
Related Terms
Understanding Pecuniary Legacy connects to these related concepts:
- Legacy: Pecuniary legacy is one specific type of legacy—a broader term encompassing all gifts made in wills.
- Specific Legacy: Unlike pecuniary legacies (cash amounts), specific legacies are gifts of particular items like jewelry or property.
- Residuary Estate: What remains after pecuniary and specific legacies are paid; pecuniary legacies are distributed before residuary estate.
- Abatement: The proportional reduction of pecuniary legacies when the estate cannot pay all gifts in full.
Related Articles
- What to Include in Your Will (Complete UK Checklist 2025): Explains when to use pecuniary legacies versus other gift types when structuring your estate distribution.
- How to Distribute Your Estate Fairly: UK Guide 2025: Demonstrates how pecuniary legacies can create clear, fair distributions alongside percentage-based gifts.
- Charitable Giving in Your Will: UK Inheritance Tax Benefits: Details how pecuniary legacies to charities can reduce inheritance tax from 40% to 36%.
Need Help with Your Will?
Understanding pecuniary legacies—including inflation risk, abatement rules, and statutory interest—helps you make informed decisions about leaving meaningful gifts to loved ones and charities.
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Legal Disclaimer: This glossary entry provides general information about UK legal terminology and does not constitute legal advice. For advice specific to your situation, consult a qualified solicitor.