INTESTACY RULES. Introduction. If the deceased was married or in a civil partnership. Total or partial intestacy

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1 INTESTACY RULES Introduction Where a person dies without a valid will (or where there is an invalid will or one that has been revoked), the deceased is said to have died intestate. In those circumstances, the deceased s estate will be distributed in accordance with the intestacy rules. The purpose of this guidance note is to outline how the intestacy rules are applied to an estate. The intestacy rules are largely set out in statute, the main legislation being the Administration of Estates Act The intestacy rules will usually apply if the deceased was born and died in England or Wales. However, if the deceased lived in or had a strong connection with any country outside England and Wales it may be that different rules apply. If this applies to the deceased, please inform us and we will advise you accordingly. The estate of the deceased meets the cost of particulars items in the order set out in the intestacy rules. First of all any debts and liabilities of the deceased are met. Secondly, funeral expenses and costs of the administration of the estate are paid. The remainder of the estate is then distributed according to the intestacy rules to the surviving relatives of the deceased (if any). Total or partial intestacy Intestacy can be total or partial. Total intestacy occurs where the deceased has not made a will, the will has been revoked (for example, by marriage or the formation of a civil partnership) or the will was invalid (for example, if it was not executed correctly). A partially intestate situation arises where the deceased dies with a valid will but one or more provisions within it fail. This most commonly arises when a will which distributes the entire estate includes a beneficiary who dies before the deceased and there is no clause in the will providing for a substitute beneficiary. If the deceased was married or in a civil partnership If the deceased is survived by a spouse or civil partner, the estate will be distributed depending on the categories of surviving relatives of the deceased. For the remainder of this note where we refer to a spouse, this means a person who was married to the deceased or a civil partner. The intestacy rules do not recognise partners who are not spouses or civil partners and no provision is made for them. Where we refer to children, this will include natural, adopted and illegitimate children (subject to proof) but excludes step children. If any of the deceased s children or other relatives die before the deceased leaving children then those children or further descendants) take equally the amount that the parent would have received if they had survived. If the estate is worth less than 250,000 and there are no children, the spouse receives everything in the estate. If the estate is worth more than 250,000 and there are children, the spouse receives 250,000 and all personal chattels (i.e. items owned by the deceased for personal use, for example, cars, jewellery, clothes and furniture) and a life interest in half the remainder of the estate. On the death of the spouse or civil partner, the children then inherit the capital of the spouse s half. The remainder of the estate is then divided between the children equally.

2 Where a person dies without a valid will (or where there is an invalid will or one that has been revoked), the deceased is said to have died intestate. In those circumstances, the deceased s estate will be distributed in accordance with the intestacy rules. In all cases, a surviving spouse has the right to require that the family home is transferred to him. If the home, or the deceased s share in it, is worth more than the amount which the spouse is entitled to receive from the estate, the spouse can pay the difference to the estate. Where a spouse has a life interest, he may use the property that is subject to that interest during his life and retain or spend any income it generates (for example, rent or interest). However, he cannot sell the assets or diminish their capital value. The spouse can also capitalise the life interest. If he does so, the fund is divided and the spouse receives the capital value of the life interest and the remainder passes to the children and other descendants. The children s entitlements are held on statutory trusts. These are trusts where the beneficiaries (the children) are entitled to the estate in equal shares when they reach 18 (or marry or form a civil partnership under the age of 18). If the estate is worth less than 450,000 and there are no children, the spouse receives everything in the estate. If the deceased is survived by a spouse but no children, and the estate is worth more than 450,000 the entitlement of the surviving spouse depends on whether there are any other relatives. If there are no parents or brothers or sisters (or children or other descendants of a brother or sister), the spouse receives the entire estate. If there are surviving parents or brothers and sisters (or their own children), the surviving spouse is entitled to all of the deceased s personal chattels, a statutory legacy of 450,000 and half of the rest of the estate. The other half of the estate is shared between the parents equally or to one parent if only one is alive. If neither parent survives the deceased, the brothers and sisters are entitled to the remaining half in equal shares (where there are more than one brother or sister). If a brother or sister has already died, their own children stand in their place and share the amount they would have received. Where the deceased was not married If there is no surviving spouse, the entire estate will be distributed to other relatives in a strict order of priority. Where the deceased has children, the estate will be shared equally between them. If there are no children, but there are surviving parents, the estate will be shared equally between the parents. If there are no children or parents, but there are siblings, the estate will be shared equally between them. If any of the brothers and sisters have died their children will take their share. Where there are no children, parents or full siblings, the order of priority is as follows: half siblings (or their descendants); grandparents; uncles and aunts of the deceased and then half uncles and half aunts of the deceased (or their descendants). The estate will be split equally between the relevant category of relative where there is more than one member of a category. It is only where there are no members of a particular category that the next becomes relevant. For example, an estate will not be split between full siblings and half siblings. If there are no children or parents but there are full and half siblings, the full siblings will receive the entire estate (shared equally). The half siblings will not receive anything.

3 If there are no surviving relatives at all, the entire estate goes to the Crown (i.e. the government) or to the Duchy of Cornwall or the Duchy of Lancaster if the deceased is resident in either of those areas. However, the estate can be divided between different generations within a category of relative as descendants are included if the relative has died before the deceased. For example, if the deceased had two children but one of them has already died, the surviving child and the other child s own children (i.e. the deceased s grandchildren) will be entitled to the estate. Dependants If there are no surviving relatives at all, the entire estate goes to the Crown (i.e. the government) or to the Duchy of Cornwall or the Duchy of Lancaster if the deceased is resident in either of those areas. Where an estate passes to the Crown in this way there is a discretion to grant money from the estate to dependants of the deceased and other persons for whom the intestate might reasonably have been expected to make provision. This might include, for example, unmarried partners, friends, relatives by marriage or civil partnership. There are guidelines in relation to how the discretion will be exercised and we can advise you further in this regard. The ability of dependants to apply to the Treasury in this way is only relevant where there are no surviving relatives and the estate has passed to the Crown. Where there are surviving relatives a dependant cannot apply in this way. The only way in which a dependant might be able to seek a share in the estate is by making an application for family provision: see further Applications for family provision below. Jointly owned assets Any assets owned jointly with another person will pass automatically to the other person on the deceased s death. This is most important usually where property is jointly owned. There are two ways of jointly owning property. Most people when purchasing a property will purchase it as joint tenants. This means that if one of the joint tenants dies, the other will automatically receive the deceased s share of the property even if the will contains directions to the contrary. The other way of owning a property jointly is as tenants in common. This means that each tenant in common owns a distinct share in the property and is free to leave it under the terms of their will. The deceased s share where property is held as a tenant in common would not automatically pass to the surviving tenant in common. If you are unsure how your property is owned, we would be happy to advise you further. Joint bank accounts will usually pass automatically to the survivor. Other assets passing outside the will and the intestacy rules In addition to jointly owned property, there are other assets which will pass to people without reference to the terms of a will or the intestacy rules. These include the following: Statutory nominations. Some registered Friendly Societies and Trade Unions allow statutory nominations to be made for less than 5,000. A nomination will pass according to the nomination rather than under the intestacy rules or a will. Gifts made in contemplation of death. These are rare as they must be made by the giver specifically in contemplation of death in the near future. Assets held in trust.

4 It is possible for relatives and others to challenge how an estate is distributed under a will or under the intestacy rules. The basis upon which a claim can be made is that the distribution of the deceased s does not make reasonable financial provision for the applicant. These will be governed by the terms of the trust. Life insurance policies. The proceeds of policies may fall into the deceased policy holder s estate and therefore be dealt with under the intestacy rules, however, it is common for the proceeds to pass outside the estate under the terms of the policy. Pension schemes. Again, these may be inherited according to the intestacy rules or a valid will, however, the terms of the scheme may provide for the death benefit to be paid to others. Applications for family provision It is possible for relatives and others to challenge how an estate is distributed under a will or under the intestacy rules. To do so, an application must be made to court for a share of the estate (or an increased share). Any person treated by the deceased as a child of the family. Any other person who immediately before the death of the deceased was being maintained by the deceased. There are many factors which the court will take into account when hearing an application for family provision. We can advise you in more detail depending upon your particular circumstances. For example, this provision can often be sought by a surviving co-habitant of the deceased or someone who was treated as a child by the deceased. The basis upon which a claim can be made is that the distribution of the deceased s estate (either under the intestacy rules or the will) does not make reasonable financial provision for the applicant. Only the following people can apply to court in this way: The spouse of the deceased. The former spouse of the deceased (provided that they have not remarried or entered into a new civil partnership). A person who lived in the same household as the deceased as if they were the spouse for two years. A child of the deceased.

5 Should you have any questions please contact our Dispute Resolution team on The material in this guidance note is intended for information purposes only. Although the law referred to is correct at the time of printing, there may have been changes subsequently. Therefore the information within this guidance note should not be applied to any particular set of facts or relied upon without legal or other professional advice. The content of this guidance note is the copyright work of Pannone part of Slater & Gordon and no part of it may be reproduced in any form without the prior permission of Pannone part of Slater & Gordon. Slater & Gordon (UK) LLP is authorised and regulated by the Solicitors Regulation Authority.