By: Simon B
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When someone dies without a valid Will, they become what is known as intestate, and their estate must be shared out according to the Rules of Intestacy.
Obviously, this is not an ideal situation. As well as potentially causing beloved family members, friends, and organisations to miss out, it can also create headaches for those left behind to deal with the estate. However, with over two-thirds of people without a Will, this is a common occurrence.
If you don’t have a Will, you should strongly consider making one – it might seem like a morbid task that you don’t wish to consider, but ensuring that you don’t die intestate will give you the peace of mind of knowing that your loved ones will be taken care of after you are gone.
There are a number of options available for anyone looking to put together a Will, and you can get reputable guidance at a reasonable price.
Rules of intestacy
The rules of intestacy specify a rigid order of who should benefit from the estate of an intestate person. This order is as follows:
- Spouse or civil partner
- Brothers and sisters
- Uncles and aunts
The highest existing and surviving relative will take priority – for example, if the deceased has a surviving spouse or civil partner, all of the estates will be passed on to them unless the value of the estate exceeds £250,000.
If the estate is worth more than this, and the deceased had children, the spouse or civil partner will keep all assets up to £250,000, as well as any of their possessions. Of the remaining value of the estate, the spouse or civil partner will keep half – the rest will be split between the surviving spouse or civil partner and the deceased’s children, or their grandchildren if the children have already died.
If there is no surviving spouse, civil partner or descendants, the whole of the estate will go to the next highest relative in order of importance. If the deceased had none of the surviving relatives on this list, their estate will go to the Crown, a situation known as bono vacantia.
This order also determines who will act as the administrator for the estate – this person is responsible for sharing out the estate and taking care of inheritance tax and any related issues.
Exclusions in intestacy
Please note that none of the following is included in the rules of intestacy:
- Cohabitants or unmarried partners
- Common-law spouses
- Ex-spouses or civil partners
- Step-parents or stepchildren
- Close friends
This means that if you die intestate, none of these relations or friends will be able to benefit from your estate.
Exceptions to intestacy
In rare circumstances, it is possible for part of the estate of someone who has died intestate to go to someone who would not normally benefit. For example, you may be able to make a claim for financial provision under the Inheritance (Provision for Family and Dependants) Act 1975.
This may be a solution if you were dependent on the deceased when they passed away, but you do not stand to inherit from them under the rules of intestacy.
Your success in this will depend on a number of factors, including how much money you have (and how much other claimants and beneficiaries have), the size of the estate, and what your future needs are likely to be.
Financial provision can be awarded in a number of different forms, such as maintenance as an ongoing payment or a lump sum. Again, this will be decided by the court based on what they think would be most appropriate for your circumstances.
You can also apply for financial provision if the deceased did have a Will. You will need to make the claim within six months of the Grant of Representation being given. You will also need the guidance of a solicitor.
Understanding the Deed of Family Arrangement
It is also possible to make an arrangement between beneficiaries and executors that would allow some or all of the estate to be passed onto someone else.
For example, if the deceased had a son and a stepdaughter, the stepdaughter would not ordinarily benefit from the estate under the laws on intestacy – however, the son and stepdaughter may be able to set up a Deed of Family Arrangement that would allow them to share the estate.
A Deed of Family Arrangement can only be valid if all affected beneficiaries and executors agree, and all beneficiaries are over the age of 18.
You could also use a Deed of Family Arrangement to make gifts without incurring extra inheritance tax.
Arranging such an agreement can be a complex task, so again, it would be wise to seek legal advice.