Intestacy occurs when a person dies in the following circumstances:-
- Did not make a Will or made a Will which was not valid.
- Revoked an existing valid Will without making a replacement.
- Married* after making a valid Will (unless the Will was made in contemplation of the marriage*).
- Part (or all) of the terms of a valid Will are ineffective either as a result of circumstances existing at the time of death or because it was badly worded (partial intestacy).
The rules concerning the distribution of a person dying intestate who is domiciled in England & Wales are set out by the Administration of Estates Act 1925 (as later amended – by the Intestates Estates Act 1952 and the Inheritance and Trustees Powers Act 2014) and seek to set out a fixed method of distribution based upon the value of the estate and the closeness of next-of-kin. In this connection the next-of-kin must either be a legally married spouse*, grandparents of the person dying intestate or persons descended from them. These relatives are grouped into classes e.g. children, brothers & sisters or uncles & aunts and can be of the whole blood (sharing the same parents) or the half blood (sharing only one parent). The various classes of beneficiaries have a set order of priority from the spouse* and issue (children, grandchildren etc.) down to uncles and aunts of the half blood who are the final group of relatives to be considered. Where one or more members of a class have predeceased then the shares that would have been due to them will instead pass to their issue.
For the purpose of distribution under intestacy “children” includes legitimate, illegitimate or adopted children but does not include stepchildren. If beneficiaries are minors they will receive their entitlement at age 18 or if they marry under that age. A spouse* must survive the deceased person by 28 days. If a judicial separation is in force the surviving spouse cannot benefit.
It is important to remember that jointly held assets (unless held as tenants-in-common) do not form part of the estate of any person dying (whether testate or intestate) as they automatically pass to the surviving joint owner and should therefore be ignored when considering the value of the estate for distribution purposes. It should also be remembered that even if there is no Will a Deed of Variation can still be made by the beneficiaries entitled to receive the estate under the rules of intestacy.
The priority and entitlement of the various beneficiaries under intestacy are set out below.
* N.B. From 5 December 2005 the same rules apply to a same sex partner who has entered into and registered a Civil Partnership.
Order of Priority & Entitlement
A spouse* is entitled to the chattels (furniture, personal effects, jewellery etc.), but not any held as an investment or for business purposes, plus:-
- If there are issue – the rest of the estate absolutely up to a maximum of £250,000 (subject to future increases every 5 years or sooner if CPI increases by 15%) and half the surplus above £250,000.
- If there are no issue – the whole of the estate.
Issue (Children, Grandchildren etc.)
- If no spouse* exists – the entire estate equally.
- If a spouse* exists and estate exceeds £250,000 one half of surplus above £250,000.
- If no spouse* or issue exist the entire estate equally.
Brothers & Sisters (Whole Blood)
- If no spouse*, issue or parents exist the entire estate equally.
The following persons will only benefit if there are no spouse*, issue, parents or brothers & sisters of the whole blood (or their issue) existing at the date of death and each class will share the entire estate equally. Only if there are no persons (or their issue) in a particular class is it necessary to consider the next class. The order of priority is:-
- Brothers & Sisters of the half blood.
- Uncles & Aunts of the whole blood.
- Uncles & Aunts of the half blood.
In the event that there are no relatives within these classes the entire estate will pass “bona vacantia” to the Crown, Duchy of Cornwall or Duchy of Lancaster depending on where the deceased person was living at the time of death.