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Estate Law

Trusts

Trustees of Discretionary Trusts

Express Trust Formalities

Reform Presumed Resulting Trusts

Resulting Trusts

Discretionary Trusts Beneficiary Rights

Introduction to Secret Trusts

Secret Trusts

Enforcing a Trust

Certainty of Intention

Certainty of Objects

Certainty of Subject Matter

Special Duties of Trustees

Trusts

After Death

Challenging a Will

Making a Dependency Claim

Contesting a Will

Types of Grant and Who Can Apply

Inheritance Provision for Family and Dependants

Provision for Family and Dependants

Trustees Appointing Replacement

Perpetuities and Accumulations Rules

What Happens to Your Body When You Die

Introduction

Making a Will

Probate

When to Write a Will

Formalities of Making a Will - S.9 Wills Act

Executors

Rules of Intestacy

Inheritance Tax

Inheritance Tax on Gifts

Power of Attorney

Mental Capacity and Power of Attorney

Documents

A Living Will

Deed of Variation

Mutual Wills

Codicils and Revoking Wills

Dying Intestate

Revocation of a Will

 

What are the Rules of Intestacy?

Intestacy rules apply in accordance with the Administration of Estates Act 1925, when a person has died without making a valid will or has only made a partial will having failed to dispose of his entire estate; he is referred to as the ‘intestate’. A decision must then be made with regard to who is entitled to the intestate’s property as his wishes are not known.

Personal Representatives Power of Sale

A trust is created similar to that found in a will, and allows the personal representatives of the intestate the power of sale. This includes providing the personal representatives with the power to pay for the funeral of the deceased, the testamentary and administration expenses, as well as any debts of the deceased. The balance remaining will then be the ‘residuary estate’ that will be shared amongst family members.

Spouse/Civil Partner and Children of the Deceased

Under intestacy rules, a spouse is somebody who was married to the intestate at the time of his death, whether or not they were living together, the same rules apply to civil partners of the deceased. Since 1st January 1996 the spouse or civil partner must survives the intestate by at least 28 days to be in a position to benefit from the residuary estate. A divorced spouse is excluded and a cohabitee has no rights under the intestacy rules.

‘Children’ refers to all direct descendants of the intestate, which includes grandchildren, great grandchildren and adopted children. The rules apply regardless of whether or not the parents of the child were married.

Entitlement

Where intestacy applies and the deceased is survived by a spouse, civil partner or a child, the estate is distributed according to the rules under s.46 of the Administration of Estates Act 1925. To begin with, the spouse or civil partner will receive the deceased’s ‘personal chattels’ absolutely. This includes most domestic effects, such as furniture and ornaments, as well as any car not used for business purposes. In addition to this, the spouse or civil partner receives a ‘statutory legacy’ of £250,000 free from tax and costs plus interest (currently 6%) from death until payment, from the residuary estate. If the residuary estate, not including the personal chattels, is worth less than £250,000, the spouse or civil partner will receive the full amount and any child will receive nothing.

If the residuary estate is worth more than £250,000, the remainder will be divided into two equal funds. One fund will be held on trust for the spouse or civil partner for life the other fund will then be held for each child on statutory trust.

Statutory Trusts

A statutory trust created following intestacy must fulfil certain criteria. The primary beneficiaries of such trusts are children who are living at the date of the intestate’s death. To obtain their interest from the trust, each child must attain the age of 18, or get married if under 18. If a child who has a vested interest in the estate dies before he reaches the age of 18 or gets married, his interest fails and the estate is redistributed. If a child dies before the intestate does, any child of his will take the share of his parent upon attaining the age of 18 or getting married.

Spouse/Civil Partner but no Children of the Deceased

The rules of intestacy change slightly if there are no children of the deceased, but there are surviving parents or siblings. The residuary estate will be distributed accordingly: all personal chattels absolutely to the spouse or civil partner, as well as a £450,000 statutory legacy free from tax and costs. Additionally, if there is any amount remaining in the residuary estate, half is obtainable by the spouse or civil partner absolutely (as opposed to a life interest, as would be the case if there were children involved). The other half will firstly go to any parent(s) that have survived the intestate. If the intestate’s parents pre-deceased him, the other half of the residuary estate will then be divided between the intestate’s siblings (whole blood siblings will take priority) or their children if any sibling pre-deceased the intestate.

Spouse/Civil Partner only

Where the intestate leaves a surviving spouse or civil partner but no child, parent or sibling, the spouse or civil partner will receive the entire estate absolutely. Other relatives of the intestate such as half brothers or sisters, cousins or grandparents will not be entitled to anything.

No Surviving Spouse or Civil Partner

If the intestate died having no surviving spouse or civil partner, the residual estate will be divided between the relatives in the following order: any child of the deceased will take priority, if there are none, then the intestate’s parent(s) will benefit. Following this, a sibling of whole blood and thereafter a sibling of half blood will benefit from the estate. Grandparents, uncles and aunts of whole blood and thereafter of half blood will be the last relatives to be considered. Finally, if there are no surviving relatives, the Crown, Duchy of Lancaster or Duke of Cornwall will take the residuary estate.

Each category, other than parents or grandparents, will take their interest in the form of a statutory trust.

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