Dying without a will

Dying without a will

Contents

A person who dies without making a will or without making a valid will, dies intestate. The property belonging to such a person is inherited according to a strict set of rules commonly known as the intestacy rules. Instead of the property going to who might have been the testator's chosen beneficiaries, it is left to other relatives in a particular order.

Total intestacy

If a person dies without leaving a valid will, they are said to die intestate. This occurs when the deceased never made a will at all, cancelled their will and did not make a new will or because the will that was made is invalid.

Partial intestacy

A person dies partially intestate if they leave a valid will, but the will fails to dispose of all the assets.

If, as is usual, the will contains a valid residuary gift, a partial intestacy is avoided. A residuary gift is one which ensures that all the property which has not been specifically dealt with in the will (the residue) passes to chosen beneficiaries nominated by the person making the will (the testator).

Definitions

Spouses and civil partners

Note that:

  • Under the intestacy rules, a spouse is the person to whom the deceased was married at their death, or in the case of civil partners, were joined in a civil partnership under the Civil Partnership Act 2004. This is regardless of whether or not they were living together at the time. Where the parties were divorced or are judicially separated, the spouse will not benefit under the rules. The same applies where civil partners have dissolved their partnership.
  • A spouse/civil partner's entitlement to the benefits under the intestacy rules is conditional on the spouse/civil partner living at least 28 days longer than the deceased. Where the deceased's spouse/civil partner dies within 28 days, the estate is distributed as if the spouse/civil partner had died first. For example, John is survived by their spouse Jane and daughter Pam. If Jane dies within 28 days of John's death, Pam will inherit the whole of John's estate.

Children

Adopted children are also included as are those whose parents were not married at the time of their birth.

Note that if a child is entitled to an interest under the intestacy of a parent who dies, and someone else then adopts the child, that child will not lose their interest under the intestacy.

Where there are references below to a relative of the deceased or to that relative's children if the relative died while the deceased was still alive, the children include all direct descendants of that relative. That means children, grandchildren, great grandchildren, etc. - this works by substitution, so that, e.g., a grandchild of the relative will only benefit if the child of the relative that is their parent died before the deceased.

Who gets the estate on intestacy?

The right of a person to benefit on intestacy depends on their relationship with the deceased and whether any closer relatives have survived. The general principle is that the estate is shared by the relatives in the highest category, to the exclusion of relatives in a later category but it is more complicated if there is a surviving spouse or civil partner.

A spouse or civil partner has priority over all other categories of beneficiaries, but may have to share the residuary estate with other beneficiaries. If the person who dies intestate has no surviving spouse or civil partner, their estate passes to the following in order:

For England and Wales:

1. Their children, subject to the property being placed in trust (see 'statutory trusts' below) but if none, to

2. Their parents, equally if both alive, but if none to

3. Their brothers and sisters subject to the property being placed in trust (see 'statutory trusts' below) but if none to

4. Their half brothers and sisters subject to the property being placed in trust (see 'statutory trusts' below), but if none to

5. Their grandparents equally if more than one, but if none to

6. Their uncles and aunts subject to the property being placed in trust (see 'statutory trusts' below), but if none to

7. Their half uncles and aunts subject to the property being placed in trust (see 'statutory trusts' below), but if none to

8. The Crown

For Northern Ireland:

1. Their children in equal shares (or to their children if they died while the deceased was still alive), but if none to

2. Their parents, equally if both alive, but if none to

3. Their brothers and sisters, including half-brothers and sisters, (or to their children if they died while the deceased was still alive), but if none to

4. Their grandparents, equally if more than one, but if none to

5. Their uncles and aunts, including half-uncles and aunts, (or to their children if they died while the deceased was still alive), but if none to

6. The Crown

The statutory trusts (England and Wales only)

Apart from the spouse, parents and grandparents, each category of relative takes subject to the term of a trust. The trusts contain three main provisions:

The class of beneficiaries

The estate is held on trust in equal shares for those relatives in the relevant category who are living at the time of the deceased's death. The term living includes a person who is conceived but not born at the time of the deceased's death.

The contingency

The interest of the beneficiaries is subject to reaching the age of 18 or getting married whichever is earlier.

The substitution

If a member of the category has died before the deceased, leaving a child or children, the child or children take their deceased parent's share, if more than one in equal shares, subject to reaching the age of 18 or getting married whichever is earlier.

This means that if John's two children Jason and Mary are entitled on John's intestacy to £1,000 in equal shares and Jason dies before John leaving two children, Barry and Pam, the amount of £500.00 will go to Mary. John's grandchildren, Barry and Pam will receive £250 each.

Spouse/civil partner & no children

Where the deceased (someone who dies without having made a valid will) leaves a surviving spouse or civil partner but no children, the whole estate, however large, passes to the spouse or civil partner absolutely.

In Northern Ireland:

Where the deceased leaves a surviving spouse or civil partner but no children, parents or brothers and sisters, the whole estate, however large, passes to the spouse or civil partner absolutely.

If there are any surviving parents, brothers or sisters, the spouse or civil partner receives the personal assets absolutely. Personal assets are all personal items except money, securities for money, property used solely or mainly for business purposes and property held solely as an investment. The spouse/civil partner also receives the following:

  • If the estate apart from the personal assets is worth less than £450,000, they receive the whole amount remaining and the other relatives receive nothing.
  • If there is more than £450,000, they'll receive the first £450,000, free of tax and costs, plus interest at a prescribed rate from the date of death until payment. The rest of the estate is divided into two equal funds. One fund will go to the spouse/civil partner absolutely and the other will go to the surviving parent or parents, equally if both alive, and if there is no surviving parent, to the surviving brothers and sisters, including half-brothers and sisters (or to their children if they died while the deceased was still alive).

Spouse/civil partner & children

Where both spouse/civil partner and children survive the deceased, their estate is distributed as follows:

In England and Wales:

The spouse/civil partner receives the personal assets absolutely, plus the following:

  • If the estate apart from the personal assets is worth less than £270,000, they receive the whole amount remaining and the children receive nothing.
  • If there is more than £270,000, they'll receive the first £270,000, free of tax and costs, plus interest at a prescribed rate from the date of death until payment. The rest of the estate is divided into two equal funds. One fund will go to the spouse/civil partner absolutely and the other will go to the children on the statutory trusts.

In Northern Ireland:

The spouse/civil partner receives the personal assets absolutely.

If the residuary estate apart from the personal assets is worth less than £250,000, the spouse/civil partner receives the whole amount and the children receive nothing.

If there is more than £250,000, the first £250,000 will go to the spouse/civil partner, free of tax and costs, plus interest at a prescribed rate from the date of death until payment, and:

  • if there is only one child, the rest of the estate is divided into two equal funds. One fund will go to the spouse/civil partner absolutely and the other will go to the child.
  • if there is more than one child, the spouse/civil partner receives only one third of the remaining estate (rather than one half) with the remaining two thirds being split equally between the children.

The matrimonial home (England and Wales only)

If there is a matrimonial home, which forms part of the estate, the surviving spouse/civil partner can retain the matrimonial home in full or partial satisfaction of their interest in the estate.

If the property is worth more than the spouse/civil partner's entitlement, the spouse/civil partner may still retain the matrimonial home provided they pay the difference to the estate. This is called equality money. For example, according to the intestacy rules the surviving spouse/civil partner is entitled to £270,000 and the matrimonial home is worth £295,000. The surviving spouse/civil partner may therefore receive the matrimonial home but will have to pay to the PRs an amount of £25,000 being the difference between the value of the house and the amount to which the spouse/civil partner is entitled. The amount of £25,000 will then form part of the rest of the estate to be divided into the two equal funds as discussed above.

The spouse/civil partner will receive the home at its open market value at the time it is decided to keep the home. In times of rising house prices, the surviving spouse/civil partner should exercise the right as soon as possible after the death.

In view of the right to retain the matrimonial home, the PRs should not sell or otherwise dispose of the matrimonial home during the twelve months from the date they receive the authority to act without the written consent of the surviving spouse/civil partner. However, if there are insufficient funds to cover the debts and estate expenses, the PRs will be entitled to sell the home with the consent of the surviving spouse/civil partner.

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