The Intestacy Rules

The Law

Where a person dies without leaving a valid will, providing for the distribution of his or her estate on death, they are said to have died ‘intestate’.

The law lays down statutory rules for the distribution of an intestate’s estate. These are known as the Intestacy Rules and are contained in Part IV of The Administration of Estates Act 1925.

The effect of the rules is that instead of the property going to the deceased’s chosen beneficiaries, the law decides who will inherit and in what priority.

It cannot be assumed that a spouse will inherit the whole estate. A spouse has priority over other possible beneficiaries but may have to share the estate.

A spouse is the person to whom the deceased was married at the date of the death whether or not they were living together. If the parties are divorced or legally separated the spouse will not benefit under the rules.

Under The Civil Partnership Act 2004 persons who have registered a civil partnership will be treated as a spouse for the purposes of the Intestacy Rules.

Apart from a spouse, the rules comprise three categories of relatives. These are;

(1)Issue (or Children)

(2)Near relatives

-Parents
-Brother/sister of the whole blood
-Nieces and nephews

(3)Distant relatives

-Brothers /sisters of half blood or their issue
-Grandparents
-Aunt/Uncle of whole blood or their issue
-Aunt/Uncle of the half blood or their issue.

A spouse/civil partner is only entitled to inherit if he or she survives the deceased by 28 days. If that is not the case, the estate is distributed as if the spouse/civil partner had not survived the deceased.

How the Rules are applied

(A)Surviving spouse /civil partner only

Where the intestate leaves a surviving spouse/civil partner only (no children, parent, brother or sister or children of a deceased brother or sister), the whole estate no matter how large, passes to the spouse/civil partner absolutely.

If the spouse /civil partner dies within 28 days of the intestate the estate is distributed as if the spouse/civil partner had not survived the intestate


(B)Surviving spouse and issue.

-Spouse will get everything up to £250,000.00 and all personal possessions.
-Anything remaining is divided into two and ;-
- One half goes to the children at 18 (or earlier if married)
- The other half is held in trust for the lifetime of the spouse. The spouse will receive the income. On the spouse’s death this half will then go to the children.

If a child predeceases leaving issue (grandchildren) the grandchildren will take the share of their deceased parent


(C)Surviving spouse no children

If there are parents, brothers or sisters of the whole blood, nephews or nieces then;

-Spouse will get everything up to £450, 00.00 and all personal possessions.
-Anything remaining is divided into two and:-
-Half goes to spouse
-Half to parents. If there are no living parents then it goes to brothers or sisters or their children.

(D)Surviving spouse no near relatives.

-Spouse takes whole estate.

(E)Unmarried person with children.

-Estate goes to children at 18 or earlier marriage
-If a child predeceases, leaving issue, his/her issue takes per stirpes.

(F)Unmarried person with no children

-Whole estate to parents; if none then
-To brothers /sisters of whole blood or their children; if none then
-To brothers/ sisters of half blood or their children; if none then
-To grand parents; if none then
-To uncles/aunts of the whole blood or their children; if none then
-To uncles/Aunts of half blood or their children; if none then
-To the Crown, (or the Duchy of Lancaster or the Duke of Cornwall)

A spouse/civil partner has a right to elect to take a cash payment instead of a life interest in any balance over the £250,000.00 mentioned above. The spouse/civil partner would receive an immediate cash payment and the balance after such payment would be paid to the children (or held on trust until 18 or earlier marriage). If the children are of full age and capacity they can agree the capital value of cashing in the life interest. If this is not possible guidelines exist to help determine the sum. This will never be the full capital value of the life interest.

The Matrimonial Home

If a matrimonial home forms part of the deceased’s estate the surviving spouse/civil partner can retain it in full or partial settlement of their interest in the estate. If the home is worth more than the spouse/civil partner’s entitlement (£250,000.00) the spouse /civil partner will have to pay the difference to the estate. This is called ‘equality money’. The equality money will form part of the estate.

Children

For intestacy purposes adopted children are treated as the children of the adopted parents. The intestacy rules are applied regardless of whether or not a particular child’s parents were married to each other.

The Crown

Where an estate passes to the Crown (or the Duchy of Lancaster or the Duke of Cornwall) there is a discretion to provide for dependants of the intestate for whom the intestate might reasonably have been expected to provide for.

The rules also set out who can deal with the estate and obtain a Grant of Letters of Administration where necessary.

The person who can deal with the estate is the closest living relative to the deceased, chosen in the following order:

1. The husband, wife or registered civil partner of the deceased (but not their unmarried or unregistered partners).
2. Their children (if over 18) or their children’s issue (i.e. grandchildren if over 18).
3. The deceased’s parents.
4. The deceased’s brothers or sisters of the whole blood or their issue.
5. The deceased’s brothers or sisters of the half blood or their issue.
6. The deceased’s grandparents.
7. The deceased’ aunts or uncles of the whole blood or their issue.
8. The deceased’ aunts or uncles of the half blood or their issue.
9. The crown.

If several people have the right to deal with the estate the grant will normally be given to the first to apply.