Clients often assume that their estate will pass to their spouse or civil partner automatically and so there is no need for them to put in place a Will. This assumption is not, in fact, accurate in all circumstances.
If someone dies without having made a Will (or having made a Will which they later revoked, or having made an invalid Will) then they are said to be “intestate”.
Where someone dies intestate, the law determines how their estate is to be distributed.
Who is entitled under these rules (the intestacy rules) depends on the value of the deceased's estate and which members of the deceased's family are surviving. How the intestacy rules work depends on when the deceased died. This article comments on the position for deaths on or after 1 October 2014.
Where the deceased is survived by a spouse or civil partner and issue (direct descendants) then the spouse or civil partner will receive:
- all of the personal items absolutely;
- a "statutory legacy” of £250,000 free of IHT
- the balance is split into two equal shares. The spouse or civil partner receives one half absolutely and the issue take the other half on statutory trusts.
Broadly speaking the effect of the statutory trusts is that if a member of the relevant category dies before the intestate leaving issue (living at the intestate's death), the issue take his, her or their deceased parent's share, and if more than one then in equal shares, contingently on reaching 18 years or earlier marriage.
Where the deceased is survived by a spouse or civil partner but no issue only then does the spouse or civil partner inherit everything.
The entitlement of a spouse or civil partner is conditional on surviving the deceased for 28 days.
Where a marriage or civil partnership has been legally dissolved, then the spouse or civil partner does not benefit under the intestacy rules.
An unmarried partner (even if a cohabitant) does not benefit under the intestacy rules.
Where there is no spouse or civil partner (or where the spouse or civil partner has not survived the deceased by 28 days) the estate passes in the following order, passing to the next category only if there are no surviving members in a proceeding category:
- issue on statutory trusts
- parents (equally if both alive)
- siblings on the statutory trusts
- half siblings on the statutory trusts
- grandparents (equally if more than one alive)
- uncles and aunts on the statutory trusts
- half uncles and aunts on the statutory trusts.
Where there are no blood relatives, the estate passes Bona Vacantia – to the Crown.
It is possible for the unmarried partner of the deceased, and others financially dependent on the intestate to make a claim against the estate under the Inheritance (Provision for Family and Dependants Act) 1975. However, this can be a costly, time consuming and uncertain process. The best way to avoid the intestacy rules determining who benefits from an estate is to ensure that a valid Will is put in place.