When a person dies without a will, their estate is divided in accordance with what are commonly known as ‘the rules of intestacy’, which are derived from different statutes.
The rules lay down both who receives the estate and also who acts as the ‘administrator’, the equivalent of the executor when there is a Will.
The Way it Works
The rules lay down classes of people who are entitled to act as administrator and be beneficiaries. If there is a person within that class, that person will be the administrator/beneficiary. If there is more than one person, then they share that responsibility/inheritance equally (which can cause problems where there are estranged or unknown relatives). The complication to this basic rule is where someone is married and has children, which is explained below.
References to marriage in old statutes are now deemed to include civil partnerships, including the intestacy rules. Unmarried partners do not receive any share of the estate.
What is Being Passed?
The first thing to ascertain is what assets are included within the estate of the deceased. This involves both a physical check and ascertaining ownership, as not everything that the person had an interest in forms a part of their estate (although HMRC follow slightly different rules when calculating how much tax they want). The ownership of property may be more complicated than it originally appears (for instance where there is a trust), with jointly owned property generating particular issues. See ‘what is included in the estate?’ for more information.
Who is Entitled?
For deaths on or after 1 October 2014, if an individual is survived by a spouse or civil partner but no children or remoter issue, the entire estate will now go to the surviving spouse or civil partner.
If the deceased individual is survived by spouse/civil partner and children or remoter issue, the surviving spouse or civil partner will receive the first £250,000 and half of the excess over £250,000. The children will receive the other half of the excess equally between them.
Another change made in 2014 is the definition of personal chattels, which now excludes assets held solely as an investment with no personal use at the date of death. The surviving spouse or civil partner inherits the personal chattels in addition to the first £250,000.
If you have no spouse or children, the intestacy rules determine the order of entitlement, broadly speaking, as follows: parents, siblings, grandparents, uncles and aunts.
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