Understanding intestacy (Part1): what do we mean by ‘intestacy’?
When someone dies without leaving a valid Will, their estate is referred to as being ‘intestate’ rather than ‘testate’. As a result, the intestacy rules in England and Wales will apply.
If a person leaves a valid Will, but part of their ‘estate’ (money, property, and possessions) is not distributed by it, the intestacy rules in England and Wales will also apply. This may occur for a number of reasons, such as when every beneficiary listed has died before the testator (the person writing the Will).
This is known as ‘partial intestacy’ and can have can have unexpected results. The ‘testator,’ should always substitute ‘beneficiaries’ (the people who benefit from an estate) in order to prevent this happening.
The law on intestacy
The law sets out the procedures for allocating who will inherit the estate in the absence of a will. Section 46 of the Administration of Estates Act 1925 establishes the priority order for intestacy. Notably, the Inheritance and Trustees’ Powers Act of 2014 (ITPA 2014) brought about substantial changes to the rules that apply when there is a surviving spouse.
Let’s look in more detail at who will inherit under the intestacy rules, depending upon the deceased’s circumstances.
Intestacy rules: if there is a surviving spouse
Surviving spouse but no children: the spouse is entitled to the entire residuary estate.
Surviving spouse and children: The surviving spouse is entitled to the deceased’s ‘personal chattels,’ (possessions), as well as a set amount known as the ‘statutory legacy’ which is currently £322,000 due to the enactment of The Administration of Estates Act 125 (Fixed Net Sum) Order 2020. This sum includes interest on it calculated from the date of death. The spouse then also receives 50% of any remaining estate, split equally among however many children there are.
Survivorship period
Before the ITPA 2014, 50% of the residue of the estate should have been held on a life interest trust for the spouse instead of being an explicit entitlement; nevertheless, this was frequently misinterpreted or implemented incorrectly.
At present, the spouse is subject to a 28-day ‘survivorship’ period, during which they are not eligible to inherit. In the event that the spouse dies before then, it is considered that they did not outlive the deceased. The subsequent beneficiary class, for which there is no survivorship period, then becomes eligible.
Intestacy rules: if there is no spouse
If there are children: this includes children who are adopted by the deceased as well as children who are legitimate, illegitimate, or legitimated. A child of the deceased who was adopted by someone else will not be eligible unless the adoption happened after the death. This eliminates the possibility that the child will lose their claim to their birth parent’s estate if they are adopted by someone else after their birth parent dies.
No children: the parents of the deceased are entitled in equal shares when both are alive, or solely to the surviving parent. Notably, if the father is not listed on the birth certificate or any other record at the time of the intestate’s birth, it is presumed that the father (and any individuals connected to the intestate only by virtue of their father) died before the intestate, unless evidence to the contrary is presented. This means that, unless there is proof that they remain alive, it is not required to look for a missing father or any other relatives on the father’s side.
No parents surviving the intestate: Siblings who share both parents, or their issue, are entitled as they are referred to as being ‘of the whole blood of the deceased.’ In the event that a sibling dies before the intestate and leaves behind children, those children will share in the entitlement of their deceased parent.
No siblings: Grandparents in equal shares.
No grandparents: To aunts and uncles (or their children if they died while the deceased was still alive).
Who cannot inherit?
When someone dies intestate, the following individuals are not entitled to inherit:
- unmarried partners (sometimes called ‘common-law’ partners)
- same-sex partners who are not married or in a civil partnership
- relations by marriage (‘in-laws’)
- close friends
- carers
Claiming against the estate
If you are not reasonably provided for financially under the rules of intestacy and the deceased died intestate, you may be able to file a claim against the estate. However, this is only limited to certain people. If you do not fit into any of the categories of entitled claimants, you may still be able to contest the will as an inheritance dispute. This is something that will be explored in more detail within Part 2 of this blog.
The importance of a valid Will
This impact of the intestacy rules emphasises how crucial it is to write a valid Will and seek professional legal advice in relation to it, especially if applying the rules of intestacy will not accomplish your desired outcome when you die. Blake Morgan has a team of specialist Wills solicitors. We can ensure that your Will reflects your wishes and that your family and other chosen beneficiaries are taken care of. Arrange a call with one of our experts today.
Check back next month to read Part 2 of this blog which is written by Sarah Street. In Part 2 you will learn what steps you can take if you find yourself facing a situation where there is an intestate estate.
Share:
If you need advice on succession and tax issues
Speak to a member of our Private Client team
Arrange a callHOW CAN WE HELP?
To get in touch with one of our legal experts please fill in your details.
Enjoy That? You Might Like These:
articles
articles