If you die without making a valid Will, you will be deemed “intestate”, and the future of your estate and loved ones will be dictated by a set of statutory Intestacy Rules. Any plans you may have had for your family, personal belongings or property will not be carried out.
Dying intestate, or without a Will, can cause unnecessary distress and financial hardship to those you leave behind. “Common law” spouses are not recognised at all under the Intestacy Rules and will not inherit anything from a partner deemed intestate.
The perils of Intestacy
The majority of adults in the UK do not have a Will – a recent survey found that 58% of all adults, and 74% of all cohabiting couples, have yet to draft Wills. And yet dying without a Will, or “intestate”, can have distressing and unexpected consequences:
- under statutory intestacy rules, if you are cohabiting but not married or in a registered civil partnership, your partner would inherit nothing
- the operation of those statutory intestacy rules could force the sale of the family home:
- your spouse or civil partner would only receive up to £450,000, your personal effects and half of the balance of your estate if you die childless
- if you die leaving children your spouse or civil partner would only receive £250,000, your personal effects and the income generated by half of the balance of your estate
- if you die leaving children under the age of 18 you hand the local authority the power to decide who becomes their guardian, which may force those best placed to look after your children to apply to court to compete for the right to do so
- your loved ones are faced with the added burden of dealing with your intestate estate during which time they would be unable to access or deal with your assets, which may give rise to immediate financial difficulties
How do the Intestacy Rules work?
The information below applies to estates within England and Wales only and you should seek specialist advice if you own property outside England and Wales.
The rules which determine who inherits your estate if you have not made a Will date from 1925. A strict “pecking order” is established by the Intestacy Rules, which depends on factors such as:
- your marital status
- whether you had children
- your immediate family
Once a relative or class of relatives within this “pecking order” is located, the search stops there and your entire estate is allocated to that relative or relatives.
- your spouse or civil partner will benefit if he/she survives you by 28 days, otherwise the estate will be dealt with as if you had no spouse or civil partner
- if a class of relative existed but has died leaving children, those children will inherit equally what would have been their parent’s share “per stirpes”. However, cousins are the remotest relatives who can inherit under the laws of intestacy
- within each class of relative, relatives of the full blood (who share the same parents with you) take preference over those of the half blood (who have only one parent in common with you)
- in-laws have no rights
- legally adopted children have the same rights as their adopted parent/s’ natural children, but lose all rights to their birth parents’ estates
- stepchildren and foster children have no automatic rights
- children born out of legal wedlock are recognised under intestacy law
- “Common Law” husbands / wives are not recognised under intestacy law. They have to go to Court if they wish to be allocated an inheritance
- same-sex partners are not recognised under intestacy law, unless they registered a civil partnership with you. They have to go to Court if they wish to be allocated an inheritance
- children may only inherit directly from their 18th birthday. Before then, their inheritance will be held in trust
- how beneficiaries will inherit jointly-owned assets is dependent on how that property is held
Common intestacy scenarios
The entire estate (after the payment of funeral expenses, tax and debts) is distributed in the following order:
- children (but if deceased then their children, if any)
- brothers and sisters (but if deceased then their children, if any)
- half brothers and half sisters
- aunts and uncles (but if deceased then their children, if any)
- if no cousins then it goes to the Crown (the Government)
Couple living together (heterosexual or same sex)
Regardless of how long a couple have lived together, or whether there are children involved, under intestacy law the deceased is classed as single. Partners have no automatic inheritance rights.
Married or in civil partnership – no children
For married couples with no children the entire estate (after the payment of funeral expenses, tax and debts) is distributed as follows:
- the surviving spouse gets a “statutory legacy” of the first £450,000 from the estate plus goods and all personal chattels
- the surviving spouse also gets half of the remainder of the estate
- the other half of the remainder is distributed to the deceased’s parents. If neither parent survives, the estate then goes to the deceased’s brothers and sisters and, if any of the brothers and sisters have died, to their children
- if none of the above are alive to inherit, the surviving spouse gets everything
Married or in civil partnership, leaving children
For married couples with children the entire estate (after the payment of funeral expenses, tax and debts) is distributed as follows:
- the surviving spouse gets a “statutory legacy” of the first £250,000 plus goods and all personal chattels
- half the remainder of the estate goes to the deceased’s children immediately (or in trust until they are 18)
- the other half of the remainder goes to the children, but the surviving spouse gets a lifetime interest which entitles him/ her to the income from that half, but not the capital
Note that statutory legacies were increased in February 2009 from their previous values of £125,000 and £200,000 respectively.
Contact us today on 07887 946 557 or online to discuss how Alex Truesdale Wills Limited can help you with a Will or associated service.