What is Intestate?
When someone dies without a Will they are said to have died intestate. There are strict rules governing how an estate must be dealt with and distributed in this situation. To deal with the estate, an administrator needs to be appointed by the Court, through a Grant of Letters of Administration. The Grant gives the administrator authority to deal with the estate according to the current law.
The estate must be administered in the same way as any other estate, paying for the funeral, valuing the assets, collecting in the assets, settling any debts and liabilities, dealing with any inheritance tax due and obtaining the Grant. However, when it comes to distributing the estate, there is a strict list of priority for who can inherit, depending on which relatives have survived the person who died.
What are the Intestacy Rules?
The Intestacy Rules (the Rules) were created in 1953 but have been updated over time, although they remain a bit archaic particularly in the language used and bearing in mind how family set ups and society has changed over the years. The terminology used can sound old fashioned, with references to full blood and half blood relatives (step relatives).
The Rules may cause significant issues for families, particularly when couples who may have been together for many years, but choose not to married or enter a civil partnership. A co-habiting partner will not inherit anything under the Rules even if they have children together and irrespective of the time they have been a couple. Married couples or civil partners who have separated informally, will still inherit a significant part of the estate of someone who dies without having made a valid Will.
If you are divorced, or your civil partnership has been dissolved you cannot inherit under the Rules.
The amount that a spouse or civil partner receives under the Rules is called the Statutory Legacy. The amount of the Statutory Legacy will differ whether the person who died had children or not.
As at April 2017, if the person was married or had a civil partner, and they had children, the statutory legacy is up to a value of £250,000. In addition, the person’s personal belongings would pass to the spouse or civil partner. Any amount above the first £250,000 would be divided in half. One half will pass to the surviving spouse or civil partner, the other half will go to any children the person who died had, in equal shares if there is more than one child.
Children will include legitimate (born into a marriage, or if born outside the marriage and the couple marry later) and illegitimate (born out of marriage). The Rules also include children who have been legally adopted by you. They do not include step children, unless they have been legally adopted by you.
If a child dies before you, leaving children of their own. Then those children (your grandchildren) will receive their parent’s share which would also be divided equally between them if there is more than one grandchild.
If the person was married or had a civil partner but no children, the statutory legacy is increased to £450,000 plus any the personal belongings (as at April 2017). Any amount over this would be divided between any surviving parents of the person who has died (or their children (the deceased’s siblings), if the parent has pre-deceased).
If there are no surviving relatives the spouse or civil partner will receive the whole of the estate.
If any relative dies before you but had children of their own, the surviving children (or their children if they have also died), would inherit what would have been their parent’s share.
Where a couple owned joint property such as a house, land or accounts, whether married or not, then that property will pass to the survivor, irrespective of the Rules.
Where the matrimonial home is in the sole name of the deceased or owned as Tenants in Common so does not automatically pass to the survivor and is worth more than the £250,000 (where there are children) or £450,000 (where there are no children but there are surviving parents or siblings) then the home may have to be sold.
This flowchart may assist.
This on-line tool provided by the Government will also assist you.
The Citizen’s Advice Bureau also have information on their website together with some examples that may assist.
I don’t want my estate to be divided like this. What do I do?
The Rules can seem complicated, but more importantly they often do not operate in the way you would have expected or how you would like. This is particularly so with the changes in the types of relationships that people have these days and the number of unmarried households, that have children.
The way the Rules operate can also create more claims against an estate by those who are entitled as they have been supported by the person who has died, for example a co-habitee. Any claim is stressful and costly and will reduce the amount of the estate available to the beneficiaries, but this can be prevented.
Take the time to work out exactly who would inherit your estate, if an intestacy situation were to happen. If it is not what you would wish, you must prepare a Will. In the event you have no surviving relatives you may think of leaving your estate to a charity rather than the Crown.
Many charities offer will writing services for either no fee or a reduced fee to prepare a basic Will. They may have an age restriction, generally over 55 to be eligible to use the scheme. You don’t have to leave the whole of your estate to the charity, but they would ask you to consider leaving them a legacy.
Most law firms offer fixed fee services to prepare a basic Will, and they will be able to advise you on the most cost effective and tax efficient way to deal with your estate. There will be additional fees if the Will is more complicated, so it is worth looking around. You can find local law firms and compare prices on Justbeagle.com.
Provided your Will is prepared and executed correctly, you can prevent the effect of an intestacy. You can then ensure that those you would wish to inherit your estate, irrespective of your family relationships can benefit.
If you have recently lost someone and believe that you are the person who needs to deal with their estate, these guides may help you. The guides will assist you in all the steps necessary to deal with a simple estate, that is below the threshold to pay any Inheritance Tax, from registering the death to distributing the estate.Citizens Advice or National Debtline. Or for informal help and support you can visit the Forum
We now feature a number of specialist Probate solicitors on our sister site, JustBeagle.com