If a person dies without leaving a will, it is said that they have died ‘intestate’. Since they have not provided instructions, the intestacy rules are used to decide who their house, personal belongings and money (their ‘estate’) passes to.
The intestacy rules will also be used if…
- A person has attempted to make a valid will but has done so unsuccessfully;
- A person has made a valid will, but they have not provided instructions that deal with all of their estate.
What are the rules?
- If the person who has died had a spouse/civil partner but no children, under the rules of intestacy, their spouse/civil partner will receive all of their estate as long as they have outlived the intestate person by 28 days or more.
- If the person who has died had both a spouse/civil partner and children, the outcome depends on how much their estate is worth. If it is worth no more than £250,000, their spouse/civil partner will receive all of their estate as long as they have outlived the intestate person by 28 days or more. If the estate is worth more than £250,000, the spouse/civil partner will receive the deceased person’s personal belongings and half of the estate. The children will receive the other half of the estate (shared between them).
- If the person who has died had neither a spouse/civil partner nor any children, their estate will pass to their closest relatives, in the following order:
- Children of the deceased; or
- Parents of the deceased; or
- Brothers and sisters of the deceased or their children; or
- Half brothers and sisters of the deceased or their children; or
- Grandparents of the deceased; or
- Uncles and Aunts of the deceased or their children; or
- Half Uncles and Aunts of the deceased or their children; or
- The Government.
The problem with the intestacy rules is that they can result in unfair outcomes.
Couples who live together but are not married or in a civil partnership are not provided for under the intestacy rules.
Example 1: Anna and Phil are not married. They have lived together for twenty years. Anna owns the house and pays most of the bills. Phil does not earn a lot of money. Anna dies without leaving a will. Under the intestacy rules, her estate passes to her parents. Phil is entitled to nothing.
The intestacy rules do not take into account the nature of the relationships of the people involved. The deceased person might have had a bad relationship with their brothers and sisters and not seen them for decades. This is irrelevant under the rules and the estate will still pass to them if they are the closest relative. Similarly, spouses or civil partners who are separating are still entitled to each other’s estates until their divorce is finalised, no matter how messy the breakdown of their relationship was.
Example 2: Henry and June have been married for ten years. Henry recently discovered that June had been having an affair. They separate and Henry petitions for divorce. Henry begins a relationship with another woman, Claire. Henry buys a new house and Claire moves in with him. Henry dies without leaving a will. At the time of his death, Henry and June’s divorce had not been finalised. As his spouse, June is entitled to all of Henry’s estate, including his new house. Claire is entitled to nothing.
The wishes of the deceased
The intestacy rules do not take into account the wishes of the deceased, even if they were known to others. Furthermore, friends of the deceased are not provided for. If the deceased person had no family at all, their estate will pass to the Government. Last year, property totalling £8 million passed to the Government under the intestacy rules.
Example 3: Kate and Mike have been living together for fifteen years. They are not married and have kept their finances separate. They have three children. Mike has been putting savings aside with the intention of using it to pay for their children to go to university when the time comes. Kate and Mike’s relationship breaks down and Mike begins a relationship with another woman, Laura. Mike and Laura get married. Mike dies without a leaving a will. As his spouse, Laura is entitled to all of Mike’s estate, including his savings. Mike’s three children from his relationship with Kate are entitled to nothing.
Can the intestacy rules be challenged?
An individual may be able to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975 if the intestacy rules have not provided for them. However, they must meet the criteria and there is no guarantee that they will be successful.
How to make sure your estate passes to the right people
- Make a valid will
– In your will, you can specify exactly who you wish to receive your estate.
- Set up a trust
– This involves transferring money, property or belongings to another so that they can look after it for the benefit of another person. This is useful if, for example, you wish to give money to your grandchildren but do not want them to have it until they are 21. Trusts can be set up in lifetime or in your will.
- Make a lifetime gift
– You could decide to gift money, property or belongings to your loved ones before you die. If these gifts are made seven years or more before you die, there will be no Inheritance Tax to pay.
Should you wish to find out more information on how to make a will or if you would like to book an appointment with a member of team please do not hesitate to contact our team.
‘The information given on our website and blog is of a general nature and may not be relied upon as legal advice as every case will be different to some extent. We would need information regarding specific circumstances and requirements in order to advise individual clients.’
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