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What are the rules of intestacy?

Monday, 13 October 2014

If you die without making a will, or if you do make a will but it is not valid and you have no other will, then what happens to your money, property, possessions, savings and other assets (i.e. your estate) is instead decided by something called the rules of intestacy.

Three key reasons for making a will are:

1. To make your wishes known

2. To provide for those you choose

3. To protect your children

A person who dies without leaving a will is known as an intestate person, and by not leaving a will they effectively forfeit their right to the above three reasons.

“An Englishman still remains at liberty at his death to dispose of his own property in whatever way he pleases or, if he chooses to do so, to leave that disposition to be regulated by the laws of intestate succession”. Oliver J, Re Coventry (deceased) (1980)

However, the rules of intestacy are very complicated, and often do not reflect the way that you would have wished your assets to be distributed. They relate to close relatives, namely spouses or civil partners, children (known as issue), grandchildren, great-grandchildren etc. (known as remoter issue), parents, siblings, their issue or remoter issue, and remoter relatives.

old coupleOnly married or civil partners can inherit under the rules of intestacy. Even if you have lived with your partner for the last fifty years, if you have not left a will, not married and not entered into a civil partnership with them, then they are entitled to nothing.

You also cannot inherit under the rules of intestacy if you have divorced or if your civil partnership has legally ended – you have to actually be married or in a civil partnership at the time of death. However, if you have informally separated from your spouse or civil partner, but have not divorced or had your civil partnership legally ended, you can still inherit.

If there is a surviving spouse or civil partner, but there are also surviving children or grandchildren and the estate is valued at more than £250,000, the surviving spouse or civil partner inherits the personal property and belongings of the deceased and the first £250,000 of the estate. The remainder of the estate is then valued, and the spouse or civil partners inherits a life interest (has the benefit of) in half of that estate, but cannot get rid of or spend that part of the estate, but can benefit from it.

If there is a surviving spouse but no surviving children, grandchildren or great-grandchildren but there are surviving parents and the estate is worth more than £450,000, then the spouse will inherit all the personal property and belongings of the person who has died, the first £450,000 of the estate with interest from the date of death, and one half of the remaining estate. If there aren’t surviving parents, but there are surviving brothers, sisters, nephews or nieces then the same applies.

Children of the intestate person will inherit the whole estate if there is no surviving married or civil partner. If there are two or more children, the estate will be divided equally between them. If there is a surviving married or civil partner, the children will only inherit if the estate is worth more than £250,000. In that scenario, the children inherit the value of the estate above £250,000, and then inherit the remainder following the death of the surviving partner. Children can only inherit when they reach the age of 18, of if they marry or form a civil partnership under this age.

Grandchildren and great-grandchildren only inherit if their parent or grandparent has died before the intestate person, and in this scenario inherit the share that their parent or grandparent would have received.

If there aren’t surviving married or civil partners, children, grandchildren or great-grandchildren then parents, brothers, sisters, nieces and nephews can inherit. If there aren’t any of these, then grandparents, uncles, aunts and cousins can inherit. This all depends on various circumstances.

If there are no surviving relatives who can inherit under the rules of intestacy, the estate automatically passes to the Crown, and the Treasury Solicitor becomes responsible for dealing with the estate. This is called bona vacantia.

Unmarried partners, lesbian or gay partners not in a civil partnership, relations by marriage, close friends and carers have no right to inherit under the rules of intestacy. So if you want anyone in these categories to inherit when you pass away, you need to state that in your will.

As you can see, the rules of intestacy are a complicated and bureaucratic way of distributing your estate after your death. They highlight the importance of making a will to ensure that the people who you want to inherit your estate after you death do so.

For more information please click here to visit the estate planning section of the Rollingsons website.

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