What happens when someone dies without a will?
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Michael King writes about intestacy - dying without a will.
Introduction
When someone dies without a will, he or she is said to have died ‘intestate’ and a person who dies without making a will is referred to as
an intestate. Dying without a will is not the only situation in which intestacy can occur. It can sometimes occur even when there is a will: for example when the will is not valid, or when it is valid and all the beneficiaries died before the testator. Intestacy can also arise when there is a valid will but some of the testator’s assets were not disposed of by the will. This is called a ‘partial intestacy’. Intestacy therefore arises in all cases where a deceased person has failed to dispose of some or all of his or her assets by will. According to the Office of National Statistics about 60% of people in England and Wales die intestate.
The questions that probably occur to most relatives of a person who dies intestate is: Who inherits? What will they inherit? And who will
administer the estate? The answers to these questions depend on who survived the intestate and what the estate consists of. The rules that govern intestacy - the Intestacy Rules - are set out in a number of pieces of legislation, mainly the Administration of Estates Act 1925 and the Intestates’ Estates Act 1952 and various amendments to the rules have been made over the years.
The statutory trust
The first thing that happens when a person dies without a will is that a statutory trust arises and the assets of the intestate vest in the Public Trustee - which means that the Public Trustee becomes their nominal proprietor - until such time as an official document known as a grant of representation is issued. The grant of representation that is issued in cases of intestacy is called letters of administration. After the grant has been issued the estate is held in trust by the personal representatives who have the power to sell the assets. The statutory trust remains in place until all the estate liabilities have been paid and the remaining assets have been distributed. In the case of a partial intestacy the estate vests in the executor appointed in the will.
Who may apply for the grant of representation?
Members of the intestate’s family who have the right to inherit under the intestacy also have a right to apply for a grant of representation and the order of entitlement is the same. A person who is lower in the order of entitlement may not apply for the grant unless all living persons with a prior entitlement have renounced their rights to the grant. The following is the order of entitlement both to a grant of representation and to inherit:
1. The spouse or civil partner
2. Issue
3. Parents
4. Brothers and sisters of the whole blood or their issue if any of such siblings have died before the intestate
5. Brothers and sisters of the half blood (i.e. they share one parent with the intestate) or their issue if any of such siblings have died before the intestate
6. Grandparents
7. Uncles and aunts of the whole blood or their issue
8. Uncles and aunts of the half blood or their issue
Where there are no living relatives in any of the above categories, the Treasury Solicitor acting for the Crown or the Duchy of Lancaster or the Duchy of Cornwall may apply for the grant.
Letters of administration
The application for a grant of representation must be made to the Principal Probate Registry or to a District Probate Registry. Before submitting the application the administrator (i.e. the personal representative of an intestate) must first ascertain the extent of the estate and if there is a liability to inheritance tax, pay the tax.
The grant of letters of administration is the document from which the administrator’s authority arises and it gives the administrator the power to sell estate assets. The first thing that an administrator must do as soon as there is enough liquid money available is to pay for the funeral and to pay for expenses incurred by the administration of the estate. All debts and other liabilities of the intestate must be paid and if there is a partial intestacy arising from a will the legacies (if any) must be paid. What is left is called ‘the residuary estate of the intestate’ and this must be distributed among the beneficiaries of the intestacy according to the intestacy rules.
Who gets what?
1. If the intestate is survived by a spouse or civil partner, but no other relatives, the spouse or civil partner will be entitled to the entire
residuary estate.
2. If the intestate is survived by a spouse or civil partner and issue the residuary estate will be divided as follows:
• the spouse or civil partner will take
a. all the personal chattels of the intestate
b. a ‘statutory legacy’ of £250,000.00 free of inheritance tax plus interest at 6% per annum from the date of death
c. a life interest in 50% of the balance of the residue (i.e. the right to the income for life). After the death of the spouse or civil partner the capital will go to the issue
• the issue will take the other 50% of the balance of the residue
3. If the intestate is survived by a spouse and there is no issue, but there are surviving parents or if no surviving parents, there are surviving brothers and sisters the residuary estate will be divided as follows:
• the spouse or civil partner will take
a. all the personal chattels of the intestate
b. a ‘statutory legacy’ of £450,000.00 free of inheritance tax plus interest at 6% per annum from the date of death
c. 50% of the balance of the residue absolutely
• the surviving parents or siblings will take the other 50%
4. If the intestate is not survived by a spouse or civil partner but there are surviving issue the issue will be entitled to the entire residuary
estate, but remoter issue cannot inherit if they have a parent who survived the intestate and was therefore capable of inheriting
5. If the intestate is not survived by a spouse or civil partner or by issue his or her relatives will inherit in the following
order:
• parents
• brothers and sisters of the whole blood or their issue
• brothers and sisters of the half blood or their issue
• grandparents
• uncles and aunts of the whole blood or their issue
• uncles and aunts of the half blood or their issue
6. If there are no surviving relatives the residuary estate will go to the Crown or the Duchy of Lancaster or the Duchy of Cornwall.
Rights of the surviving spouse or civil partner
When a surviving spouse or civil partner becomes entitled to a statutory legacy and a life interest in 50% of the balance of the residuary estate, he or she can choose or ‘elect’ to accept a capital sum instead of the life interest. He or she must give notice in writing to the personal representatives within 12 months of the issue of the grant of representation. If he or she is the sole personal representative the notice must be given to Senior Registrar of the Family Division of the High Court. Alternatively, if the issue of the intestate have all reached the age of 18 it is possible for the surviving spouse or civil partner to come to an agreement with them about the capitalization of the life interest which would remove the necessity for the formalities.
The situation regarding the matrimonial/civil partnership home depends on whether or not the intestate and the spouse or civil partner co-owned the property and if they co-owned it whether there was a joint tenancy or a tenancy in common. Where there is a joint tenancy the right of survivorship operates so that the surviving spouse or civil partner becomes the sole owner. Where there is a tenancy in common or where the intestate was the sole owner the intestate’s interest in the property is part of the estate and
the surviving spouse or civil partner has no automatic right to it.
However, the matrimonial/ civil partnership home must not be sold within 1 year of the issue of the grant of representation without the written consent of the surviving spouse or civil partner unless it is sold in the course of the administration of the estate because there is a need for liquid money and there are no other assets that can be sold. Within the year the surviving spouse or civil partner can acquire the property in full or part satisfaction of his or her interest in the intestate’s estate provided that he or she was resident in the property at the time of the death of the intestate. Notice in writing must be given to the personal representatives.
Rights of children
For children of an intestate to inherit there are two requirements that must be fulfilled:
i. they must be living at the death of the intestate and
ii. they must reach the age of 18
If a child is under 18 at the time of the death the statutory trust must remain in place until he or she reaches 18 and becomes entitled to inherit. If a child dies before the intestate, but leaves children of his own (i.e. grandchildren of the intestate) the same rule applies: they will inherit their parent’s share if they were living at the death of the intestate and they reach the age of 18.
For the purposes of the intestacy rules, adopted children are regarded as the legitimate children of their adoptive parents.
The rights of children whose parents are not married are the same as those of children whose parents are married.
Stepchildren have no right to inherit under an intestacy unless they were adopted by the intestate. However if the stepchild was treated by the intestate as a ‘child of the family’ or was financially dependent on the intestate, he or she may be able to claim against the estate under the Inheritance (Provision for Family and Dependents) Act 1975.
Conclusion – how to avoid intestacy
The rules that must be followed when a person dies without making a will are complicated and they must be followed regardless of the wishes of the intestate. Intestacy is best avoided by making a will that is valid and that effectively disposes of all of the testator’s assets. Wills should also be reviewed and replaced by new wills from time to time as a testator’s circumstances change. It is therefore recommended that a person intending to make a will should obtain professional help so as to make sure that there are no gaps or omissions that could result in a partial or a full intestacy.
May 2012
Disclaimer:
Introduction
When someone dies without a will, he or she is said to have died ‘intestate’ and a person who dies without making a will is referred to as
an intestate. Dying without a will is not the only situation in which intestacy can occur. It can sometimes occur even when there is a will: for example when the will is not valid, or when it is valid and all the beneficiaries died before the testator. Intestacy can also arise when there is a valid will but some of the testator’s assets were not disposed of by the will. This is called a ‘partial intestacy’. Intestacy therefore arises in all cases where a deceased person has failed to dispose of some or all of his or her assets by will. According to the Office of National Statistics about 60% of people in England and Wales die intestate.
The questions that probably occur to most relatives of a person who dies intestate is: Who inherits? What will they inherit? And who will
administer the estate? The answers to these questions depend on who survived the intestate and what the estate consists of. The rules that govern intestacy - the Intestacy Rules - are set out in a number of pieces of legislation, mainly the Administration of Estates Act 1925 and the Intestates’ Estates Act 1952 and various amendments to the rules have been made over the years.
The statutory trust
The first thing that happens when a person dies without a will is that a statutory trust arises and the assets of the intestate vest in the Public Trustee - which means that the Public Trustee becomes their nominal proprietor - until such time as an official document known as a grant of representation is issued. The grant of representation that is issued in cases of intestacy is called letters of administration. After the grant has been issued the estate is held in trust by the personal representatives who have the power to sell the assets. The statutory trust remains in place until all the estate liabilities have been paid and the remaining assets have been distributed. In the case of a partial intestacy the estate vests in the executor appointed in the will.
Who may apply for the grant of representation?
Members of the intestate’s family who have the right to inherit under the intestacy also have a right to apply for a grant of representation and the order of entitlement is the same. A person who is lower in the order of entitlement may not apply for the grant unless all living persons with a prior entitlement have renounced their rights to the grant. The following is the order of entitlement both to a grant of representation and to inherit:
1. The spouse or civil partner
2. Issue
3. Parents
4. Brothers and sisters of the whole blood or their issue if any of such siblings have died before the intestate
5. Brothers and sisters of the half blood (i.e. they share one parent with the intestate) or their issue if any of such siblings have died before the intestate
6. Grandparents
7. Uncles and aunts of the whole blood or their issue
8. Uncles and aunts of the half blood or their issue
Where there are no living relatives in any of the above categories, the Treasury Solicitor acting for the Crown or the Duchy of Lancaster or the Duchy of Cornwall may apply for the grant.
Letters of administration
The application for a grant of representation must be made to the Principal Probate Registry or to a District Probate Registry. Before submitting the application the administrator (i.e. the personal representative of an intestate) must first ascertain the extent of the estate and if there is a liability to inheritance tax, pay the tax.
The grant of letters of administration is the document from which the administrator’s authority arises and it gives the administrator the power to sell estate assets. The first thing that an administrator must do as soon as there is enough liquid money available is to pay for the funeral and to pay for expenses incurred by the administration of the estate. All debts and other liabilities of the intestate must be paid and if there is a partial intestacy arising from a will the legacies (if any) must be paid. What is left is called ‘the residuary estate of the intestate’ and this must be distributed among the beneficiaries of the intestacy according to the intestacy rules.
Who gets what?
1. If the intestate is survived by a spouse or civil partner, but no other relatives, the spouse or civil partner will be entitled to the entire
residuary estate.
2. If the intestate is survived by a spouse or civil partner and issue the residuary estate will be divided as follows:
• the spouse or civil partner will take
a. all the personal chattels of the intestate
b. a ‘statutory legacy’ of £250,000.00 free of inheritance tax plus interest at 6% per annum from the date of death
c. a life interest in 50% of the balance of the residue (i.e. the right to the income for life). After the death of the spouse or civil partner the capital will go to the issue
• the issue will take the other 50% of the balance of the residue
3. If the intestate is survived by a spouse and there is no issue, but there are surviving parents or if no surviving parents, there are surviving brothers and sisters the residuary estate will be divided as follows:
• the spouse or civil partner will take
a. all the personal chattels of the intestate
b. a ‘statutory legacy’ of £450,000.00 free of inheritance tax plus interest at 6% per annum from the date of death
c. 50% of the balance of the residue absolutely
• the surviving parents or siblings will take the other 50%
4. If the intestate is not survived by a spouse or civil partner but there are surviving issue the issue will be entitled to the entire residuary
estate, but remoter issue cannot inherit if they have a parent who survived the intestate and was therefore capable of inheriting
5. If the intestate is not survived by a spouse or civil partner or by issue his or her relatives will inherit in the following
order:
• parents
• brothers and sisters of the whole blood or their issue
• brothers and sisters of the half blood or their issue
• grandparents
• uncles and aunts of the whole blood or their issue
• uncles and aunts of the half blood or their issue
6. If there are no surviving relatives the residuary estate will go to the Crown or the Duchy of Lancaster or the Duchy of Cornwall.
Rights of the surviving spouse or civil partner
When a surviving spouse or civil partner becomes entitled to a statutory legacy and a life interest in 50% of the balance of the residuary estate, he or she can choose or ‘elect’ to accept a capital sum instead of the life interest. He or she must give notice in writing to the personal representatives within 12 months of the issue of the grant of representation. If he or she is the sole personal representative the notice must be given to Senior Registrar of the Family Division of the High Court. Alternatively, if the issue of the intestate have all reached the age of 18 it is possible for the surviving spouse or civil partner to come to an agreement with them about the capitalization of the life interest which would remove the necessity for the formalities.
The situation regarding the matrimonial/civil partnership home depends on whether or not the intestate and the spouse or civil partner co-owned the property and if they co-owned it whether there was a joint tenancy or a tenancy in common. Where there is a joint tenancy the right of survivorship operates so that the surviving spouse or civil partner becomes the sole owner. Where there is a tenancy in common or where the intestate was the sole owner the intestate’s interest in the property is part of the estate and
the surviving spouse or civil partner has no automatic right to it.
However, the matrimonial/ civil partnership home must not be sold within 1 year of the issue of the grant of representation without the written consent of the surviving spouse or civil partner unless it is sold in the course of the administration of the estate because there is a need for liquid money and there are no other assets that can be sold. Within the year the surviving spouse or civil partner can acquire the property in full or part satisfaction of his or her interest in the intestate’s estate provided that he or she was resident in the property at the time of the death of the intestate. Notice in writing must be given to the personal representatives.
Rights of children
For children of an intestate to inherit there are two requirements that must be fulfilled:
i. they must be living at the death of the intestate and
ii. they must reach the age of 18
If a child is under 18 at the time of the death the statutory trust must remain in place until he or she reaches 18 and becomes entitled to inherit. If a child dies before the intestate, but leaves children of his own (i.e. grandchildren of the intestate) the same rule applies: they will inherit their parent’s share if they were living at the death of the intestate and they reach the age of 18.
For the purposes of the intestacy rules, adopted children are regarded as the legitimate children of their adoptive parents.
The rights of children whose parents are not married are the same as those of children whose parents are married.
Stepchildren have no right to inherit under an intestacy unless they were adopted by the intestate. However if the stepchild was treated by the intestate as a ‘child of the family’ or was financially dependent on the intestate, he or she may be able to claim against the estate under the Inheritance (Provision for Family and Dependents) Act 1975.
Conclusion – how to avoid intestacy
The rules that must be followed when a person dies without making a will are complicated and they must be followed regardless of the wishes of the intestate. Intestacy is best avoided by making a will that is valid and that effectively disposes of all of the testator’s assets. Wills should also be reviewed and replaced by new wills from time to time as a testator’s circumstances change. It is therefore recommended that a person intending to make a will should obtain professional help so as to make sure that there are no gaps or omissions that could result in a partial or a full intestacy.
May 2012
Disclaimer: