If you die without making a will, your estate will pass and be administered according to the intestacy rules, which decide who gets what rather than you. These rules are set out in the Administration of Estates Act 1925, which was amended by the Inheritance and Trustees Powers Act 2014 (ITPA 2014).The beneficiaries under an intestacy will depend on the total net value of the estate. The next of kin will usually be the administrators (personal representatives) and will apply to the probate registry for the power to deal with the estate and obtain ‘letters of administration’.
The intestacy rules which apply from October 2014 are briefly:
- If you are married (or in a civil partnership) and your estate is worth less than £250,000 your surviving spouse/civil partner inherits everything.
- If you are married (or in a civil partnership) and your estate is worth more than £250,000 and you have no children, your surviving spouse/civil partner inherits it all.
- If you are married (or in a civil partnership) and your estate is worth more than £250,000 and you have children, the first £250,000 and the personal possessions will go to the spouse/civil partner. The remainder of the estate will be divided in half, with half going straight to the surviving spouse and the other half being divided between surviving children.
- If any child should predecease you, then their own children (your grandchildren) would get their parent’s share, and so on if a grandchild has predeceased etc.
- If you are not married (or in a civil partnership) but have children, your children will inherit everything equally. Again, if a child has predeceased you, then their children will get their parent’s share (or children’s children etc).
- If you are not married (or in a civil partnership) and have no children, your surviving relatives will inherit in the following order:
- Brothers or sisters or their children (or children’s children etc);
- Half brother or sisters or their children (or children’s children etc);
- Uncles or aunts (brothers and sisters of the whole blood of a parent) or their children (or children’s children etc);
- Uncles and aunts (brothers and sisters of the half blood of a parent) or their children (or children’s children etc);
If you have no surviving spouse/civil partner, parents, children, siblings, grandparents, uncles, aunts, cousins, first cousins etc, then under the intestacy rules, everything will go to the Crown.
- The intestacy rules do not recognise unmarried ‘common law’ partners.
- The intestacy rules allow a 28 day survivorship period.
- To inherit under the intestacy rules, a person needs to be aged 18 or over or have married earlier. If they inherit as a minor, the gift will be held on trust for them until they reach the age of 18. If they do not reach the age of 18 (i.e. they either predecease as a minor or die before coming of age), the gift will revert to the persons entitled in the same class or the next class below if no such person in a same class exists.
- If the intestacy rules cause financial hardship, then a claim for provision from the estate can be made under the Inheritance Act. However, the best way of avoiding the unintended consequences of the intestacy rules is always to make a will.
- The effect of the intestacy rules can be inequitable and unfair, especially for surviving spouses. Surviving dependants may be entitled to seek more adequate provisions by making a claim under the Inheritance (Provision for Family and Dependants) Act 1975 or by seeking a discretionary grant from the Crown if the estate passes to the Crown.