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No will, no way!
- AuthorPaul Rothwell
If you die without a will, who inherits your estate?
Well let’s start with what intestacy is.
The rules of the intestacy are the laws that determine who will inherit the estate of someone who dies without leaving a will. If you die without leaving a will, this is known as dying intestate.
In October 2014, changes were made to the rules of intestacy. The changes made no real difference to people with modest estates, but the changes were more significant for people who have larger estates and couples who live together, but are not married or have formed a civil partnership.
Executors appointed in a will, are authorised to distribute an estate in accordance with the instructions in a will, as the executor’s authority to do this comes from the will. However, if someone dies intestate, it can be more difficult to administer an instate estate.
So who inherits?
The rules of intestacy provide that only certain individuals automatically inherit the deceased’s estate. These may include:
• Husbands, wives and civil partners;
• Children; and
However, the rules can be complex as they depend on the circumstances of the deceased. If you are administering an intestate’s estate, it is important you know who is entitled to inherit and the proportion of the estate they will be inheriting.
Applying for a grant of letters of administration?
Where there is no will, there really is no way and no one has immediate authority to administer the estate. The authority to administer the estate of someone who is intestate comes when the court issues a grant of representation.
The law sets out who can apply to administer an intestate’s estate and the appropriate individual(s) apply to the Probate Registry for a court order known as a ‘grant of letter of administration’ (Grant). Once the Probate Registry has issued the Grant, the individuals named on it, who will now be known as administrators (in contrast to executors appointed in a will), are able to administer the intestate’s estate.
Before a Grant is issued, the administrator must provide HM Revenue and Customs (HMRC) with precise details about the assets and liabilities in the estate at the date of death. If inheritance tax is due on the estate, either the full amount or first instalment of inheritance tax must be paid before the Probate Registry will issue a Grant. This process can take time depending on the complexity of the estate.
Who inherits if the deceased was married or had a civil partner?
When a spouse or civil partner dies without leaving a will and the residue of their estate (this excludes joint assets passing automatically by survivorship) is less than £250,000, then the surviving spouse or civil partner will inherit everything. If the deceased has no children then the first £450,000 will pass to the surviving spouse or civil partner.
However, if the deceased had children and the residue of their estate is greater than £250,000, the surviving spouse or civil partner will receive all the deceased’s personal items, £250,000 and the remainder of the estate will be divided into two equal shares. Once will be held on a life interest trust for the surviving spouse or civil partner and the remaining half share will be divided between the children, although the children cannot access their inheritance until they are 18 years old.
How does this apply to unmarried couples?
For an unmarried couple who live together with no children, the outlook can be bleak for the surviving partner. The surviving partner has no entitlement to the deceased’s estate, with it being immediately inherited by relatives, such as parents, brothers and sisters and nieces and nephews, in line with the provisions set out in the rules of intestacy.
The term ‘common-law partner’ is not identified as an individual who inherits under the rules of intestacy. If the deceased had a child or children from a previous relationship, the inheritance is likely to pass to that child / those children. The surviving partner may then be faced with making a claim against the deceased’s estate, which will delay the estate administration and is likely to be costly, if something cannot be agreed with the family members who inherit.
What’s ‘Bona Vacantia’?
If someone dies intestate without leaving relatives, their estate becomes part of a process, known as ‘bona vacantia’. This means the deceased’s estate will pass to the Crown. While the Crown can grant shares from the estate to those who can prove they have an entitlement, it is under no obligation to do so once bona vacantia has been declared.
Discussing and deciding what will happen to your money, personal effects and assets is not a conversation many people enjoy but, it is a conversation worth having. It always best to take advice on your circumstances.
At Martin Tolhurst Solicitors we have team of lawyers that specialise in the preparation of wills, tax planning and estate administration. We can work with you to help you prepare your will or advise you on how to administer an estate. Get in touch today to discuss more on 01474 546 013 or email our new enquires team at firstname.lastname@example.org.
Please note that this article does not constitute individual advice and is for guidance only.