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.
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.
For more information on:
- Statutory Trusts
- Spouse/Civil Partner but no Children of the Deceased
- Spouse/Civil Partner only
- No Surviving Spouse or Civil Partner