The Rules of Intestacy explained
04 August 2010
Given that 60% of registered deaths last year were intestate, clearly an awareness of the rules of intestacy is as important as ever. The proportion of intestate deaths has remained stubbornly constant over a number of years, demonstrating a common resistance amongst the general public to consider what should happen to their estate after they have died. The rules governing the distribution of intestate estates are generally set out in the Administration of Estates Act 1925. These rules have remained largely unchanged for decades, although the Law Commission is undertaking a review of the laws governing the distribution of intestate estates and expects to produce a draft Bill for reform in late 2011.
Until such time as the law is reformed, we have set out below the current rules governing the distribution of intestate estates.
Where a person dies in England & Wales leaving a surviving spouse or civil partner, but no issue, parents or siblings, the spouse or civil partner inherits the estate in its entirety.
Where there is a surviving spouse or civil partner and issue, the spouse takes the personal chattels, plus the first £250,000 and a life interest in half of the remainder. The Intestate’s issue take half the residue of the estate immediately and the other half on the death of the surviving spouse or civil partner (retaining an interest in this second half in the interim).
If there is no issue, but the Intestate’s parents or siblings survive, the spouse or civil partner takes the first £450,000 plus half of the remainder. The rest passes to the parents absolutely or, if both have predeceased, to the siblings of the whole blood (or, if predeceased, their issue).
If the estate falls below the above-mentioned limits, it passes in whole to the spouse or civil partner.
If there is no spouse or civil partner surviving, the estate passes to the Intestate’s issue per stirpes (i.e. in equal shares, and if one has predeceased, their share will be divided equally between their children, and so on). If there is no issue, the parents benefit. If there are no surviving heirs in these classes of kin, the estate passes to the first of the following classes of kin which contains someone alive (or who survived the Intestate):
• Siblings of the whole blood or their issue per stirpes
• Siblings of the half blood or their issue per stirpes
• Grandparents per capita
• Uncles and aunts of the whole blood or their issue per stirpes
• Uncles and aunts of the half blood or their issue per stirpes
If there are no survivors in any of these classes, the estate passes to the Crown (or to the Duchies of Cornwall or Lancaster).
The situation is similar in Scotland, with some differences. Most notably, if there are no survivors in any of the above classes, great uncles and great aunts of the whole blood or their issue (and failing that, great uncles and aunts of the half blood or their issue) benefit. When it comes to distribution of the estate, the main point of difference comes when the heirs are not all of the same degree, i.e. when there are surviving first cousins and issue of first cousins who have predeceased. The estate is divided per capita to the first degree in which there are surviving members and then per stirpes to the issue of persons in that degree who have predeceased.
When it comes to distribution, no distinction is made in England & Wales or in Scotland between the paternal and maternal uncles and aunts and, unless there is the same number of uncles and aunts on both sides of the family, the estate should not be split 50/50 between the paternal and maternal families.
George – £180,000 estate
George Harris died intestate, a bachelor without issue. He was predeceased by his parents and was known to have had three siblings. Of these, his sister Joan was still alive, but his sister Ethel and brother David had both predeceased. Ethel had died aged five and her line of the family had therefore terminated. David had died a couple of years before George, leaving three sons: Robert, Brian and Michael. Unfortunately, Robert died a few months before his uncle George. However, he left a son and a daughter to take his share.
George’s estate was divided in half between the surviving sister Joan (who took £90,000) and the issue of the predeceasing brother David. David’s surviving sons Brian and Michael each received a 1/6 share worth 30,000, whilst Jonathan and Lucy, the children of the deceased son Robert, each received a 1/12 share worth £15,000.
Mildred – £800,000 estate
Mildred Mills died testate in England & Wales but unfortunately the sole residuary beneficiary named in her Will, a close friend, predeceased, and there was no gift-over clause. Apart from a few pecuniary legacies, the estate passed as on intestacy to Mildred’s statutory next of kin. Mildred was a spinster without issue, as was her only sibling, a sister Hilda, who predeceased. Mildred’s parents and both sets of grandparents had predeceased and her statutory next of kin was in the class of her uncles and aunts and, where predeceased, their issue.
All five uncles and aunts (two paternal and three maternal) had predeceased, one – her paternal uncle Leonard Mills – without issue. Mildred’s other paternal uncle, Joseph, left two children, Nigel and Jill, both of whom were still alive.
Mildred had three maternal uncles and aunts – John, Daniel and Winifred. John left three sons: Fred, Norman and Richard. Daniel left two: Garry and Barry. Although the aunt Winifred did not marry, she had a daughter, Maria, who predeceased Mildred, leaving an only child, Stephanie.
Although Stephanie was the most distantly related to Mildred, being a first cousin once removed where the other beneficiaries were all first cousins, as the only child of an only child she received the largest share of the estate – £200,000, a 1/4 share. The first cousins Nigel and Jill Mills, and Garry and Barry Hill, all received £100,000 each, a 1/8 share. Fred, Norman and Richard Hill received a 1/12 share of the estate, which worked out as just under £66,700 each – significantly less than the amount received by Stephanie, who alone of all the beneficiaries had never met Mildred.
If Mildred had died in Scotland, Stephanie would not have received more than the other beneficiaries. The estate would have been divided per capita at the level of first cousins, with each receiving a 1/8 share of £800,000, with Stephanie, as the only child of a predeceasing first cousin, also receiving 1/8 of the estate.
View the Mills family tree.