The Rules of Intestacy: Why Making a Will is Essential
The rules of intestacy are governed by the Law of England and Wales and outline how an estate should be distributed when the deceased dies without a valid Will. The rules of intestacy can also apply even when there is a Will. This may occur in situations where certain beneficiaries have passed away and their entitlement under the Will does not have a default clause, leaving part of the estate unable to be fully administered. This is known as partial intestacy. It is important to be aware of how these rules affect estate administration to ensure that your estate will pass as you intend. To determine who is entitled under an estate in these circumstances, an order of priority is outlined in Section 46 of the Administration of Estates Act 1925.
- Rules of Intestacy for Married Individuals
- Rules of Intestacy for Those with Children
- Rules of Intestacy for Other Family Members
- Procedure and Differences in Handling
- What This Means for You
- Why Choose Ridley & Hall Will Writing Solicitors?
Rules of Intestacy for Married Individuals
The first beneficiary entitled, if there is one, is the surviving spouse. When there are no children, the surviving spouse is entitled to the entire residuary estate. There is a survivorship period of 28 days, during which the spouse must survive past this point to be entitled. If the spouse dies within this time, they are considered as not having survived the deceased, and the next beneficiary in the order of priority is entitled. If the spouse does survive by 28 days and there are children of the deceased, the spouse is entitled to personal chattels (personal possessions, house contents, etc.) and a statutory legacy of £322,000, recently increased from £270,000 as of July 26, 2023, through the Administration of Estates Act 1925 (Fixed Net Sum) Order 2023. The residuary estate is then divided between the spouse and the children, with the spouse entitled to 50% and the children to the remaining 50% (divided equally if there is more than one).
Rules of Intestacy for Those with Children
In situations where there is no surviving spouse, the children of the deceased will be entitled to the residuary estate, which will again be split among however many of them there are. In terms of eligible children, adopted children and illegitimate children fall under this category, while stepchildren and foster children have no entitlement.
Rules of Intestacy for Other Family Members
In situations where there are no children, the parents of the deceased are entitled to an equal share, or solely if there is only one surviving. If there are no surviving parents of the deceased, siblings who are classified as being of the ‘whole blood of the estate’—meaning they share the same biological parents—are entitled to the residuary estate. If there is more than one, it is divided equally. If a sibling has passed away before the deceased, their children inherit their entitlement, i.e., the deceased’s nieces and nephews.
It may be the case that the deceased only had ‘half-blood’ siblings. In this scenario, they are entitled to the residuary estate, again split equally if there is more than one. Their children are entitled to their share if they have predeceased.
If the deceased has no siblings of any kind (‘half or whole blood’), then the grandparents of the deceased are the next entitled beneficiaries. Following this, it extends to any aunts and uncles, and if they have predeceased, their children (cousins of the deceased). The rule for ‘whole blood’ and ‘half-blood’ applies as before.
Ultimately, if none of the above beneficiaries are present, the crown is entitled to the residuary estate.
Procedure and Differences in Handling
When someone dies intestate, the order of priority for beneficiaries also applies to determining who will administer the estate. The individuals in this role, known as ‘administrators,’ must apply for a Grant, specifically known as Letters of Administration, to handle the estate. This process can be more complex and expensive compared to if there were a Will specifying your chosen executors (those you would want to handle your estate). Factors like locating estranged family members can increase the costs of estate administration if they fall under a entitled class. While these costs are deducted from the estate before distribution, they can cause delays in administration and prove very time-consuming for the appointed administrator.
Making a Will allows you to designate who should handle the administration of your estate, saving time and reducing additional costs, while also ensuring the estate is administered correctly.
What This Means for You
Most people think that if they do not make a Will, their spouse will inherit everything when they die. However, as explained above, this is not the case. If you are not happy with the outcome of the rules of intestacy, making a Will is the simplest way to ensure your estate is distributed in accordance with your wishes. There may be specific individuals within a class that you would not want to inherit, such as an estranged child, or those to whom you would want to allocate a larger share. Some people like to include friends as well as family or leave specific gifts to individuals, known as legacies (e.g., £10,000 or a piece of jewellery). Grandchildren may also not be accounted for when the rules of intestacy apply, if all the children of the deceased are still alive. Charities are another consideration; people often choose to leave a portion of their estate to them, not only to support a cause close to their heart but also for more efficient estate management for tax purposes. Gifts to charities are exempt from inheritance tax, which is something to consider if your estate is likely to be subject to this tax.
Another aspect to consider are life events such as re-marriage or divorce, as these can affect entitlement to an estate. For instance, if the deceased had children, then divorced their spouse but entered into a long-term relationship with a new partner, that partner would not be entitled to any of the estate. This is because the rules of intestacy do not recognise ‘common law marriage.’ People often do not realize that if they re-marry within their lifetime, and there are children as a result of the first marriage, the new spouse will inherit the statutory legacy and then 50% of the residue.
Funeral wishes can also be specified in your Will. While these are not legally binding, they serve as a helpful guide for your loved ones regarding your preferences.
Why Choose Ridley & Hall Will Writing Solicitors?
Having your Will prepared by one of our Will solicitors is important, as this ensures that the Will is valid and best represents your wishes. At Ridley and Hall, we make sure that you understand all the options available to you, providing you with a Will you feel confident reflects your wishes. Our friendly staff will explain all aspects of the Will without using legal jargon, and provide a draft Will along with a commentary to explain each clause. You can come to the appointment with no prior knowledge of what goes into a Will and be assured that every option is fully explained to fit your unique circumstances. If needed, we can also offer personalised tax planning advice to ensure that you make the most of tax exemptions and reduce the amount of inheritance tax due upon death.