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What happens

with no Will?

Intestacy

The intestacy rules are governed by the Administration of Estates Act 1925. The distribution of your estate, in the absence of a Will, will depend on what is left (the net estate) after the deduction of all debts, liabilities, funeral expenses, costs of administration of your estate (including payment of any tax) and what family survives. There will be no inheritance tax on what assets will be passed to a surviving spouse or civil partner. However, if a portion of the net estate is distributed to another person or persons, the excess over the nil-rate band (currently £325,000) will be subject to inheritance tax. The entire net estate will be distributed in accordance with the rules set out below.

As a preliminary guide, the following rules relate to Intestacy

1) The spouse or civil partner who survives the intestate (the person without the Will) by 28 days will benefit otherwise the presumption is that there is no spouse or civil partner.
2) If a class of relative did not survive the intestate but left ‘issue’ (children and/or family descendants), the issue will take the place of their parent and they will all inherit equally (cousins are the remotest relatives who can inherit under the intestacy rules).
3) Within each class of relatives, those of the whole blood (of the same parents) are preferred to relatives of half-blood (having only one common parent.)
4) Legally adopted children have the same right as their adopted parents’ natural children but have no right over the estates of their birth parents.
5) Children may only inherit after attaining the age of 18.
6) The manner of inheriting jointly owned assets (property, land, savings accounts etc.) depends on how assets are held.
7) In-laws have no rights.
8) Step-children and foster children have no automatic rights.
9) Children born out of wedlock are not recognised under intestacy law, but a claim can be made through the court.
10) A common law husband or wife is not recognised for any inheritance (not married).
11) Unless in a civil partnership, same sex partners are not recognised, but a claim can be made through the court for an inheritance.

What happens to my assets if I have no spouse or civil partner?

1. Where there are issue but no surviving spouse or civil partner, the issue will share the residuary estate absolutely on the statutory trusts. No other relative will receive any asset from your estate.
2. Where there is no surviving spouse or civil partner and no issue but there are relatives in any of the following categories: Parents, Brothers or sisters of the whole-blood or their issue. Brothers and sisters of the half-blood or their issue. Grand-parents. Uncles or aunts of the whole-blood or their issue. Uncles or aunts of the half-blood or their issue.
Where there is no surviving spouse or civil partner or issue, the relatives in the order of priority above will take your residuary estate. No person in a category above can take any assets if there is a qualifying person in a higher category. For example, parents will take before brothers or sisters of the whole-blood, etc.

In this case the intestate’s estate is distributed in this order:
A) Children of the intestate or to their issue.
B) Parents of the intestate.
C) Brothers and sisters of the whole-blood or to their issue.
D) Brothers and sisters of the half-blood (only one common parent) or to their issue.
E) Grand-parents.
F) Aunts and uncles of the whole-blood or their issue (if any).
G) If there are no cousins, (the issue of aunts and uncles of the whole-blood) then your estate will go to the Crown, Duchy of Lancaster, or to the Duke of Cornwall.
H) Parents (of their deceased child) have no automatic inheritance rights where people are living together, regardless of whether there are children involved under the intestacy law.

What is the position where I am survived by my Spouse or Civil partner?

1. Where there are no issue and no living relatives, your spouse or civil partner who survives you by at least 28 days will inherit your entire estate absolutely.
2.Where there are issue your spouse or civil partner who survives you by at least 28 days takes absolutely your personal chattels, a fixed sum of £250,000, together with interest accrued from the date of your death and a life interest in half of the remainder (i.e. the residuary estate). Subject to the said life interest, the residuary estate is held on statutory trusts for the issue.
3. In the absence of any issue, but there is a parent of the deceased, or if no parent there is a brother or sister: the spouse or civil partner will take your personal chattels, a fixed sum of £450,000, with interest accrued from the date of your death, and an absolute interest in half of the remainder (i.e. the residuary estate). The other half is held on trust for the parents, if any, or if none, any brothers or sisters or their issue on the statutory trusts.

What is the position where I do not have a surviving Spouse or Civil partner, no issue and no relatives?

In this situation, the residuary estate will pass to the Crown or to the Duchy of Lancaster or the Duke of Cornwall for the time being as what is termed ‘bona vacantia’.
These intestacy rules apply to all persons domiciled in England and Wales but also perhaps to a person who lives abroad but is domiciled in England and Wales.
The distribution of your estate may therefore not reflect your wishes as an Intestate.
As it can clearly be seen from the application of the intestacy rules, any person who dies intestate (without a Will) fails to leave specific and descriptive details and wishes as to how and to whom their net estate is to be distributed to beneficiaries in the aftermath of their death. Therefore, in order to avoid the application of these rules it must be stated that it is evidently necessary to make a Will.

Who cannot inherit under an Intestacy?

Lesbian and gay partners not in a civil partnership cannot inherit under the intestacy rules. Neither can unmarried partners although this may be challenged if the partner lived with the intestate 2 years prior to their death. Carers who looked after the intestate when they were alive cannot inherit and neither can close friends. However, it must be noted that any of these classes of individuals are able to apply to the court for financial provision from the estate of the intestate.

Statistical information relating to Intestacy that you may find useful

According to the Law Society’s Report as of 27th October 2014, entitled ‘Law Society Research: millions of Britons have no Will’, the majority of Britons have not written a Will. The research revealed that 73% of 16 to 54 year olds do not have a Will, while 64% of people over the age of 55 have made their final wishes clear in a Will. The research also found that men are more likely to have a Will and keep it updated than women. Last year (2013) £8 million went to the Government because of people dying intestate. 23% of respondents to the research wrongly believed that without a Will, their possessions would automatically go to their family.

It is estimated that by 2018 the Government will receive nearly £6 billion from Inheritance Tax. But with careful planning, such as leaving money to charity, those with a Will can substantially reduce the amount of inheritance tax that becomes liable or even alleviate it altogether. Inheritance Tax can be much higher without a Will in place. Other research suggests over half of UK adults have not written a Will, with the proportion of those without one in older age groups risen significantly over the past four years (dating back from 2013). A poll of 2,000 adults by adviser search website Unbiased.co.uk and Certainty.co.uk, the National Will Register, found that 58 per cent of the adult population does not have a Will.

While the proportion has remained flat since 2009, the proportion without a Will has climbed significantly among older age groups.
In 2009, 41 per cent of those aged 50 to 59 were without a Will, which has now risen to 54 per cent. The percentage of those aged 40 to 49 who do not have a Will has increased from 60 per cent in 2009 to 69 per cent in 2013. The only age group in which the proportion of people without a Will has fallen over the period is 20 to 29-year-old’s, among which it has dropped from 88 per cent in 2009 to 83 per cent today.

Unbiased.co.uk chief executive Karen Barrett said the statistics are “as concerning now as they were in 2009”. She has said that there are still a staggering amount of people without a Will; in fact, this year’s (2013) data shows the number of 35 to 54 year old’s without a Will have risen from 64% to 68%, leaving those without a Will and their family in a vulnerable financial position.

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Corinthians Law UK LTD
Taunton Will Writers
41 Leslie Ave
Taunton
Somerset
TA2 6JW
07401 137 373
01823 251 210
heretohelp@corinthianslawuk.co.uk

© Corinthians Law UK Ltd.

Member number - SU68092612/15

Registered in England and Wales Registration Number 09852533

Member of the Information Commissioners office Data Protection 1998 ZA151513

Legal Practitioner

Insured by Hiscox

© Corinthians Law UK Ltd.

Member number - SU68092612/15

Corinthians Law UK LTD
Taunton Will Writers
41 Leslie Ave
Taunton
Somerset
TA2 6JW
07401 137 373
01823 251 210
heretohelp@corinthianslawuk.co.uk