There are several reasons why people put off creating a Will – for some, it’s the perceived complication; for some, it’s the cost. For others, it’s the morbidity of the task. However, we’ve said it before, and we’ll reiterate it here again – it is important to create a Will, regardless of what you own or what your net worth may be.
When someone dies without a valid Will, it is said that they have died intestate.
When presented with what appears to be an intestate estate, the first step usually involves a diligent search for a Will. Other local Solicitors, Will Writers and National Will Registers should be included in this search. If the search turns up empty, it can be safe to proceed on the basis that the deceased died intestate. Without a Will explicitly stating how the estate should be distributed, any assets or property that they owned is shared according to the rules of intestacy.
The rules of intestacy
Without going into extensive detail, the rules in England and Wales generally state that the order of distribution of the estate is as follows:
1. Spouse or civil partner
2. Issue (children/grandchildren/great grandchildren, etc.)
4. Brothers and sisters – full-blood and then half-blood (or their issue if they’ve predeceased)
6. Uncles and aunts – full-blood and then half-blood (or their issue if they’ve predeceased)
This is a priority order with the highest living relative(s) receiving the entire estate unless the total value of the estate is over £322,000. If the value is over £322,000, and the deceased was married or in a civil partnership with children, the spouse or civil partner will receive everything up to the first £322,000. Everything above that is split in half between the spouse/ civil partner and the child/ children in equal shares. This is called the statutory legacy. Prior to 26th July 2023, the statutory legacy sum was set at £270,000 rather than £322,000.
In Scotland, the rules differ. Intestacy rules in Scotland are contained in the Succession (Scotland) Act 1964. The rules state that if someone dies intestate and they were married or in a civil partnership, the estate must be divided into:
Scottish rules of intestacy are also more generous – going as far as great uncles and aunts of the whole and half-blood (or their issue if they’ve predeceased) before reverting to the Crown.
When should I instruct a specialist for help?
An intestate estate is usually a situation that triggers an Administrator to seek professional advice with the estate administration. However, what are some signs that may prompt a professional to seek assistance from a specialist to mitigate risks as well as speed up the process?
Here are a few common triggers to consider:
Complex/ unknown family relationships
It is critical to ensure that anyone who is entitled to inherit is included and anyone unentitled is excluded from any distributions due to take place. However, this is often not a simple task.
There is an increased number of complex family relationships in today's society, with formal and informal adoptions, cohabiting couples, children born outside of marriage or having children with multiple partners, just to name a few. The Personal Representative is legally and financially responsible for the correct distribution of the estate so it's important to mitigate any risk of any claims against the estate.
Recreating or verifying a family tree is the most recommended method of gaining a clear picture of a family's makeup. This can often involve verifying the accuracy of an existing tree or starting from scratch with nothing but a death certificate in hand. This process includes the application of the relevant rules of intestacy for your jurisdiction. Each family line is then meticulously descended in order to investigate all potential heirs, or to prove a negative. It will cover questions such as:
Was their adopted child legally adopted?
Were there any children born outside the marriage?
Was the deceased’s mother definitely an only child?
Have you obtained all marriage, death or divorce documentation and certificates?
Have any informal name changes taken place?
A specialist would obtain certified answers to these questions and more in order to prevent misdistributions or errors when administering an intestate estate and provide peace of mind. This would be done by obtaining all birth, marriage, death and adoption documentation, carrying out confirmatory searches of the birth and marriage indices as well as interviewing all potential heirs to confirm accuracy. The verified family tree could then lead to an insurance policy, underwritten by A-rated insurers, to protect the Personal Representatives from any potential future claims if required for peace of mind.
What about when you have a named beneficiary but cannot locate them? An added benefit of using a specialist would be the ability to trace a missing person in the event that a beneficiary’s whereabouts are unknown.
In addition to ensuring you are distributing to the correct people, you must also locate all known, lost or unclaimed assets owned by the deceased, sometimes with very little information to start with. This will confirm that you know the total value of the estate in order to maximise its value and avoid any Inheritance Tax issues with HMRC. This can sometimes be time-consuming or quite overwhelming to complete, especially if little or nothing is known about what was owned by the deceased.
A specialist will have access to databases that will provide complete and accurate information on all assets owned to protect yourself and your client from future claims against the estate. A financial asset search, like the service offered by Title Research, will allow you to demonstrate the thorough searches that were undertaken in the event that additional assets are later discovered or if any Inheritance Tax disputes are raised by HMRC.
Moreover, it’s important to keep in mind that additional complexities may further warrant the need for specialist support. Examples of these include:
On occasion, the search for unknown assets could lead to the discovery of foreign assets owned by the deceased.
Not only could owning foreign assets lead to further questions, such as whether a Will was ever created in that foreign jurisdiction that could aid the administration, but those assets would require being dealt with according to the Probate rules in that jurisdiction, which can sometimes be tricky to navigate. A specialist would be able to work through the foreign Probate rules, alongside Solicitors and other local specialists, to deal with the assets including tax liabilities, Probate requirements or foreign currency transfers.
A search for unknown assets could also result in finding much more than anticipated. As mentioned previously, when calculating the total value of the intestate estate, if it is above £322,000, and the deceased was either married or in a civil partnership with children, the statutory legacy applies. With the risk of the situations above, such as incomplete family trees, foreign assets or unknown assets, it is vital to reduce risk of misdistribution as it needs to be split equally among the spouse/ partner and any children. Again, a specialist will be able to guarantee accuracy by conducting the thorough research required.
If you’re interested in finding out more about Title Research’s specialist services in both asset repatriation and genealogical research, call our Client Services Team on 0345 87 27 600 or email email@example.com.