When someone has passed away without leaving a valid Will, they are referred to as “dying intestate”.
This may include:
- Where someone has not made any Will at all
- Where a Will cannot be found
- Where someone has made a Will, but it has not been validly signed
- Where someone has made a Will which only deals with part of the estate - known as a “partial intestacy"
- Where someone has revoked their old Will without making a replacement. This can include a foreign Will inadvertently revoking all other Wills.
As a result, rather than being able to choose who inherits the assets, the law – known as the Rules of Intestacy -sets out who will inherit the deceased’s estate. If someone dies without a valid Will there may be a conflict about who has the right to administer the estate. The Non-Contentious Probate Rules 1987 sets out who has the legal priority to administer the estate and apply for a Grant of Letters of Administration.
What are the Rules of Intestacy?
Depending on the relationship to the deceased, the Rules of Intestacy sets out where each family member will rank in priority to the others. The order of the entitlement is as follows:
- Spouse or civil partner
- Siblings then half-siblings
- Uncles and Aunts then half uncles/aunts
- If there are no surviving family members, then it will pass to the Crown.
Where there is more than one person in a particular class e.g. more than one child, then all those who fall under that category will share the estate equally between them.
It is important to note that the Rules are prescriptive, and this will mean that other groups are not entitled to receive anything from the estate. Cohabiting partners, unmarried partners, step-children and friends are excluded under the Rules. You may find that a situation where distant relatives inherit everything instead of a long-standing partner or other loved ones. This can cause disagreements and tension between grieving loved ones and family members.
The Rules also don’t incorporate any available tax exemptions and reliefs to allow the estate to pass in the most tax-efficient way. Nor does it ensure that appropriate trusts are set up to protect your loved ones.
How is the Estate divided on Intestacy?
The way in which the estate is split under the Rules of Intestacy will depend upon which family members survive the deceased. Using the most common example, if the deceased dies leaving a spouse (or civil partner) and children, the estate is divided as follows:
- Where the estate is worth £250,000 or less, the spouse (or civil partner) will receive everything
- Where the estate is above £250,000, the spouse or civil partner receives £250,000 (plus interest) and all the personal possessions of the deceased
The rest of the estate is then split. Half of the remainder will be allocated to the spouse or civil partner absolutely. The other half will be divided equally on trusts between the surviving children. Where the deceased’s child has also died leaving children of their own, that child’s share will be divided equally between his/her children, i.e. the deceased’s grandchildren.
This outcome may not be suitable for the family – it may not provide adequately for a spouse of the deceased may have wished to cater to his children in other ways. However, the failure to make a valid Will means that there is no choice but to follow this formula.
The Process for Letters of Administration
In an intestacy, it is crucial to establish who has the legal right to act as Personal Representative (PR) for the deceased – unlike with a Will which would have appointed Executors. The Non-Contentious Probate Rules 1987 sets out the order as to who can act as a PR and apply for the Grant of Letters of Administration.
For more information on the role of a Personal Representative, please take a look at our article on Things a Personal Representative Should Be Aware Of. Once a Grant of Letters of Administration has been issued, the administrators have the legal authority to administer the assets within the estate. From this, they can then settle any debts and liabilities, after which the estate assets can be distributed.
What If There are No Surviving Relatives?
In the case where the deceased has no surviving relatives, their estate will be handed to the Crown. HM Treasury will be accountable to administer the estate accordingly -this is referred to as ‘bona vacantia’.
How NSS Legal Can Help
We can help the family members of the deceased navigate the Rules of Intestacy and Non-Contentious Probate Rules. This will include assisting those entitled to act as Personal Representatives in valuing the estate’s assets and liabilities, advising on the availability of tax reliefs and exemptions and preparing and submitting to HMRC the Inheritance Tax account and application for the Grant of Letters of Administration.
If required, we can also assist the PR’s in distributing the estate in accordance with the Rules of Intestacy and winding up the estate. We can also advise on how best to arrange settling any inheritance tax liability from the deceased’s assets, particularly where the estate comprises of very few liquid assets.
As will and probate solicitors specialising in Will drafting, Probate and Estate Administration, we can advise you on preparing suitable Wills to avoid your family being lumbered with the statutory Rules of Intestacy in the event of your untimely death. For further information on the advantages of using a solicitor for drafting your Will, read our article on Why You Should Use a Solicitor Over a Will Writer.