Intestacy – What Happens

16/11/2009


If someone dies without making a valid will, they are said to have died intestate. Should this situation arise, the estate and possessions of the deceased person will be divided according to rules set out in the Administration of Estates Act 1925.
 
It is important that you do not assume that because you are married or in a civil partnership your spouse or civil partner will automatically inherit all your property even if you have not made a will. There are statutory legacies that a surviving spouse or civil partner is allowed to inherit, depending on the circumstances. As of 1 February 2009, the basic rule is that if you die intestate, your spouse or civil partner will receive your chattels and the first £250,000 of the estate (the ‘statutory legacy’) if you have children and the first £450,000 if you do not.
 
Where the estate is worth more than the statutory legacy, the position becomes more complicated.
 
Married With Children
If you die intestate with an estate worth more than £250,000, your spouse or civil partner will receive £250,000 and a life interest in half of the remainder of the estate. On his or her death, this passes to your children. Your children will get the other half of the remainder of the estate, when they reach 18 or when they marry. If any of your children pre-decease you leaving children of their own, your grandchildren are entitled to their parent’s share.
 
Married Without Children
If you die intestate with an estate worth more than £450,000, your spouse or civil partner will receive £450,000 plus half the balance of the remainder of the estate. The remaining half of what is left goes to other family members in a strict order of legal precedence – parents; brothers or sisters or their children; half brothers or sisters or their children; grandparents; uncles or aunts or their children; half uncles and aunts or their children. Only if you are married with neither children nor relatives will your surviving spouse or civil partner get everything.
 
It is important to be aware that the intestacy rules do not recognise a deceased person’s step-children, only his or her natural, adopted or illegitimate children.
 
Although the rules afford some protection if you are married or in a civil partnership, it is recommended that you both have a will in order to ensure that your wishes are carried out. It is important to remember that marriage or civil partnership automatically invalidates any existing will.
 
Not Married
Entitlement under the intestacy rules only applies to couples who are married or in a civil partnership. Couples who are cohabiting have no protection. Contrary to popular belief, the law does not acknowledge such a thing as a ‘common law’ wife or husband. If you are cohabiting with your partner and wish for them to benefit financially upon your death, it is essential to make a will to this effect. Whilst your partner might be eligible to claim for financial provision to be made from the estate, under the Inheritance (Provision for Family and Dependants) Act 1975, this is uncertain and depends on being able to prove that he or she was financially dependent on you.
If you are not married but have children and die intestate, your children will inherit your entire estate. If any of your children have died leaving children of their own, the children will inherit their parent’s share.
 
If you are not married and do not have any children, your surviving relatives will inherit in the same order as listed above.
 
If you fail to make a will and have no surviving relatives, on your death everything will go to the Crown.
 
Whatever your situation, making a will ensures that your wishes are complied with and can also help to minimise the tax burden when you die. In addition, it is normally possible to administer a testate estate more efficiently than one that is intestate.
 
For details of the precise rules, see the HM Revenue and Customs website.

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