What Are The Rules of Intestacy ?
What is Intestacy law ?
Any individual who dies without executing a valid will or disposing of his entire estate by will is known as dying intestate. In the event you die intestate your assets are distributed according to the Law on Intestacy.
How does an individual die intestate ?
An individual dies intestate when he has not left a valid will or has not disposed of his entire estate by will. A deceased individual may be intestate if he:
- Did not make a will.
- Revoked a will that he had made, by an action such as physically destroying the will with the intention of revoking it or marrying or entering into a civil partnership after making a will.
- Made an invalid will.
Where an individual dies intestate, it may lead to total intestacy or partial intestacy depending to what extent the individual has validly distributed his assets as set out below.
A total intestacy occurs, when a person dies without leaving a valid will or disposing of his entire estate by will.
A partial intestacy occurs, when a person dies leaving a will but the will does not dispose of his whole estate but only part of his estate. The intestacy rules apply to the part of the estate that the will fails to dispose of. Partial intestacy is governed by section 49 of the Administration of Estates Act 1925 (AEA 1925).
What are the rules of intestacy ?
When an individual dies intestate, their property must be distributed according to the rules of intestacy. Only married or civil partners and some other close relatives can inherit under the rules of intestacy.
Civil partners & Spouses
Where a marriage or civil partnership is dissolved by a legally recognised decree or there is a continuing judicial separation, the civil partner or the spouse of the individual who has died intestate has no right to benefit under the rules of intestacy. Thus a spouse who is divorced or civil partner whose relation is legally ended cannot claim their shares under the intestacy rules. However the partners who had been separated informally but not legally can claim under the intestacy rules. The entitlement of the intestate’s spouse or civil partner is conditional on surviving the intestate for 28 days.
What property can pass by intestacy ?
The intestacy rules only apply to property that the deceased could have left by will. The rules therefore do not apply to:
- Assets that the deceased held jointly with any other party as joint tenants (joint bank account or a house held as joint tenants).
- Assets held by trustee on trust for the deceased that passes under the terms of the trust on his death.
- Nominated assets and life insurance policies
- Pensions benefit paid to the deceased’s family at the discretion of the trustee.
Who cannot inherit ?
The following people have no right to inherit where someone dies intestate:
- Close friends
- Lesbians and gay partners not in civil partnership
- Unmarried partners
- Relations by marriage
How is the deceased’s estate distributed under the rules of intestacy ?
Section 46 of the AEA 1925 sets out the intestacy rules for the order of entitlement and depends on:
- The intestate’s estate market value
- Which member of the intestate’s family survive him/her ?
Who gets the deceased’s estate on intestacy ?
The distribution rules on intestacy are considered in two sections:
- Where the intestate leaves a civil partner or a spouse.
- Where the intestate leaves no civil partner or a spouse.
‘Issue’ includes all direct descendants of the deceased. Adopted children and illegitimate child has the same right as of the born child. Step children is not included as Issue), the residuary estate is distributed as follows:
Where the deceased leaves civil partner or spouse and surviving issue
- The civil partner or spouse receives all personal property or belongings of the deceased absolutely.
- The civil partner or spouse receives the first £250,000 of the estate. If the residuary legacy is less than £250,000 than the civil partner or spouse receives everything and the issue is not entitled to anything.
- The rest of residuary estate is shared equally in two portions. The civil partner or spouse has life interest in first half while the issue receives the second half absolutely on trusts.
Where the deceased leaves civil partner or spouse (but no issue) and surviving parents and sisters & brothers (or their issue)
- The civil partner or spouse receives all the personal property or belongings of the deceased absolutely.
- The civil partner or spouse receives the first £450,000 of the estate. If the residuary legacy is less than £450,000 than the civil partner or spouse receives everything.
- The rest of residuary is distributed in two equal portions. The civil partner or spouse take first half absolutely and the second half is distributed:
a) The deceased’s father & mother absolutely (equally if both alive);
b) If the deceased’s father & mother are dead than to the sisters and brothers on statutory trusts.
Where the deceased leaves civil partner or spouse and no close relatives, than the civil partner or spouse inherits everything.
Where deceased leaves no civil partner or spouse
Where there is no civil partner or spouse but the deceased has blood relatives than the deceased’s estate is distributed in following order:
- His issue
- His father & mother
- His sisters & brothers
- His half sisters & brothers
- His grandparents
- His aunts & uncles
- His half aunts & uncles
Where the deceased dies with no blood relation, his estate passes to the Crown, the Duchy of Lancaster or the Duke of Cornwall. This is known as bona vacantia.