What are the Intestacy Rules?

What are the Intestacy Rules?

The Intestacy Rules set out who benefits from a deceased person’s estate if they either:

  • Died without making a Will.
  • They had a Will, but it was revoked because they:
    • physically destroyed it with the intention of revoking it and then didn’t prepare a new Will; or
    • married or entered a civil partnership after they made a Will, but that Will was not made in contemplation of the marriage or civil partnership.
  • They made a Will that was invalid.

The rules are found in the Administration of Estates Act 1925 and were reformed by the Inheritance and Trustees’ Powers Act 2014.

What is a Partial Intestacy?

A partial intestacy happens when someone dies leaving a valid Will, but the Will fails to deal with what should happen to all of the estate.  The intestacy rules apply to the part of the estate that the Will does not cover.

For example, a testator makes a Will leaving their estate to two beneficiaries in 50% shares.  If one of the beneficiaries dies before the testator, then that share can’t pass to them and will instead pass under the Intestacy Rules unless:

  • The Will includes a substitutional gift of that share – so that another beneficiary receives the gift instead.
  • The Will includes ‘accrual’ wording, so that the share automatically passes to the other beneficiary.
  • The Will includes a ‘class gift’ – for example “to such of my children as shall survive me and if more than one in equal shares”, so the gift will pass to the other children who survive the testator
  • The gift is to a child of the testator – in which case, section 33 of the Wills Act 1847 will apply meaning that the gift will pass to the deceased child’s children or issue (direct descendants), unless there is a contrary intention in the Will.

What Property can pass by Intestacy?

The Intestacy Rules only apply to property that the deceased could have left by Will. The rules do not apply to:

  • Assets that the deceased held jointly with another person which pass automatically by the Rules of Survivorship. For example, a joint bank account which will pass to the surviving joint owner, and not under the Intestacy Rules.
  • Assets held on trust for the deceased, that pass under the terms of the trust on their death.
  • Life insurance policies taken out for the benefit of named individual. For example, a policy taken out for the benefit of a spouse and/or children.
  • Pension benefits paid by the trustees of the pension fund at their discretion to members of the deceased’s family.

Potential Problems with Dying Intestate

Having your estate pass by Intestacy can be problematic as the people who end up inheriting may not be the people who you’d have wanted to inherit has you made a Will.

The Intestacy Rules do not provide for cohabiting partners who are not married or in a civil partnership. They also don’t apply to step-children.

In some cases it may be necessary to instruct a genealogist to prepare a family tree in order to work out who is entitled to benefit from the estate. This can cause delays to the administration and it can be costly.

You will also be unable to have a say over who should administer your estate, as you will not have chosen your Executors. Instead, Administrators will need to administer your estate and there are rules as to who these people can be – potentially distant family members.

To avoid all of these potential problems, it would be better to prepare a Will tailor made to your needs.

Distribution on Intestacy

The order of entitlement under the intestacy rules is set out in section 46 of the Administration of Estates Act 1925 and can be summarised below:

 

 

Is client married or in a civil partnership?

  Yes

No

Spouse / civil partner gets everything No

Is the estate worth more than £322,000 (from 26/07/23)

 

Do they have children? Yes

Their estate is shared equally between them
    Yes 

No

   
Spouse/civil partner gets personal chattels*, £322,000 (from 26/07/23) and half the remainder. Children get the other half share which is held in trust for them until they reach 18 Yes

Does the client have children? Do they have parents? Yes

Their estate is shared equally between them
  No

No

   
  Everything goes to the spouse/civil partner Do they have brothers and sisters? Yes

Their estate is shared equally between them
  No

 
Do they have nephews and nieces? Yes

Their estate is shared equally between them
No

 
Do they have grandparents?

 

Yes

Their estate is shared equally between them
No

 
Do they have uncles and aunts? Yes

Their estate is shared equally between them
No

 
Do they have cousins? Yes

Their estate is shared equally between them
No

 
(*) Personal chattels are items of personal property that may include, for example, furniture. Jewellery and clothes.

 

Everything goes to the Crown (Government) or the Duchy of Cornwall or to the Duchy of Lancaster, if resident in those areas

 

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