Legal advice on the rules of intestacy
If you die without leaving a Will or your Will is not valid, then under the Administration of Estates Act 1925 your personal representative(s) will hold your estate on trust with power to sell. There is a statutory order of entitlement to take the position of personal representative, which is similar to the order of entitlement of your relatives to share in your estate. At Royds Withy King we can provide legal advice on intestacy and how this may affect an inheritance.
Once funeral expenses, debts and tax have been paid the residue should be shared out by the personal representatives between those entitled in priority to share in your estate under the statutory Intestacy Rules.
The Intestacy Rules on entitlement to your estate:
If you are married or in a civil partnership with issue (i.e. children, grandchildren etc), your spouse or civil partner if they survive you for 28 days will receive:
- your personal items;
- the first £250,000 of your estate outright as a legacy; and
- half of the remainder (known as your residuary estate)
The other half of your residuary estate will be divided equally between your issue on ‘statutory trusts’ for them at 18. If you are married or in a civil partnership without issue, your spouse or civil partner will inherit your whole estate if they survive you for 28 days.
If you are unmarried and not in a civil partnership, your whole estate will pass to the following in order of priority:
- your children (or grandchildren);
- your parents;
- your siblings of whole blood (or their children);
- your siblings of half blood (or their children);
- your grandparents;
- your uncles and aunts of whole blood (or their children);
- your uncles and aunts of half blood (or their children); or finally to
- the Crown, the Duchy of Lancaster or the Duchy of Cornwall – known as ‘bona vacantia’!
Some property will not pass under the Intestacy Rules and this includes
- property such as real estate or a bank account which you own as a joint tenant – this will pass automatically to the surviving joint owner;
- a life policy or pension scheme with a nominated beneficiary – this will pass to the nominated beneficiary; and
- a life interest held under trust – this will pass in accordance with the trust instrument.
What are the potential problems?
On top of the fact that intestacy means you do not decide how your estate is distributed on your death, there are a number of additional problems which could occur:
- if the value of your family home is high in proportion to the total value of your estate, the home may need to be sold in order for your assets to be divided between your spouse or civil partner and your children or other relatives, thus threatening your spouse’s or civil partner’s occupation;
- intestacy law does not recognise the right to your estate of partners who are not married or in a civil partnership, nor the right of step children. Your estate will pass down a standard list of your blood relatives regardless of your wishes. Your partner or step child would need to apply to the court for a share of your estate, the outcome of which would not be guaranteed, and which may well cause delay, additional cost and bad feeling;
- if you have no surviving blood relatives, spouse or civil partner then your estate will pass straight into the hands of the government rather than to any charity or friend you may wish to benefit;
- if your children or grandchildren inherit while they are under 18 their inheritance has to be held on statutory trusts which requires trustees and often involves administration costs;
- if you are separated from your spouse or civil partner but you have not yet formally divorced or dissolved your civil partnership, your spouse or civil partner will still be entitled on your death under the Intestacy Rules regardless of your separation.
WIthy King’s experienced lawyers can assist with making a Will to help you avoid the circumstances described above. We also advise disappointed beneficiaries, sensitively and effectively, on their options including applications to the court for a share in an estate. Our team has built up a great deal of experience in the administration of intestate estates, in particular where the local authority is involved in organising the immediate post-death formalities. WIthy King has trusted contacts with specialist genealogists and investigators to identify and locate family members. It is important to ensure that your will is comprehensive and kept up to date so as to avoid there being a ‘partial intestacy’ of your estate. This can happen if, for example, the beneficiaries named in your will predecease you and your will does not contain a default clause.