Intestacy

Question 1

How long must a deceased’s spouse outlive them to benefit from the intestacy rules?

Answer 1

28 days

Question 2

What special right does a surviving spouse have in the deceased’s estate?

Answer 2

Right to require the personal representatives to vest the matrimonial home

Either in full or partial satisfaction of their absolute interest in the estate.

Notify PRs in writing within 12 months from date of grant

Question 3

What is the statutory legacy a deceased’s spouse is entitled in intestacy?

Answer 3

£322,000 free of tax and costs plus interest from the date of death + personal chattels of the deceased

Also entitled to 1/2 share of residue that is left over.

Question 4

What is the statutory legacy if the deceased leaves both spouse and issue?

Answer 4

Spouse:

• Personal chattels absolutely.
• Statutory legacy of £322,000 free of tax and costs plus interest from the date of death to the date on which payment is made.
• One half of the residue (if any) absolutely.

Issue:
- Other half of the residue (if any) on statutory trusts.

Question 5

How long does the deceased’s spouse have to notify the PRs of their wish to exercise their right to the matrimonial home?

Answer 5

12 months from the date of grant

Question 6

Which membership classes in intestacy take the residuary estate subject to statutory trusts?

Answer 6

everyone
Except the deceased’s spouse, the deceased’s parents and grandparents

Question 7

What are the implications of the residuary estate being subject to a statutory trsut?

Answer 7

• contingency - interest of beenficiaries are contingent on reaching 18 years old.
• substitution - if a member of a the relevant category due before the intestate, leaving issue, then the issue takes their deceased parent’s share, contingent on reaching 18 yrs.
• class of beneficiaries - residuary estate is held on trust in equal shares for relatives in relevant class who are living at date of death, or not yet born, but conceived (ie. baby in womb).

Question 8

Definition of testate, intestate and partially intestate:

Answer 8

Testate: The deceased has left a valid will which deals with all property forming part of their estate. The intestacy rules do not apply.

Intestate: None of their property is disposed of by will. The intestacy rules apply to their entire estate.

Partially intestate: Some, but not all, of their property is disposed of by will. The intestacy rules apply to any property which is not disposed of by will.

Question 9

How do the PR’s hold the estate property?

Answer 9

The personal representatives of an intestate deceased hold the undisposed property on trust with the power to sell (s.33, ‘AEA 1925’).

Question 10

Who is entitled to the estate on intestacy?

Answer 10

1. based on which relatives survive the deceased
2. statutory order set out in s.46 AEA 1925.
3. If D leaves spouse (by at least 28 days) and/or issue, they are the only class to consider.
4. if D has no spouse or issue, a wider class of relatives are considered.

Order:
1. both parents (equal shares)
2. one parent (held absolutely)
3. full siblings
4. half sibling
5. grandparents
6. aunts and uncles
7. half aunts and uncles
8. to the Crown in default

Question 11

What is the meaning of ‘issue’ for the purposes of intestacy?

Answer 11

Children and remoter linear descendants e.g. grandchildren, and includes those who are legitimate, illegitimate, legitimated (born to unmarried parents who later marry) and adopted children.

It includes children who are conceived but not yet born at the date of death.

Question 12

What are personal chattels?

Answer 12

There is a statutory definition of ‘personal chattels’ in s55 AEA 1925.

It means “tangible movable property” but excludes the following:

1. Money or securities for money
2. Property used by the intestate at their death solely or mainly for business purposes
3. Property held at the death of the intestate solely as an investment

Question 13

What happens on intestacy to the marital home where there is a surviving house?

Answer 13

If they held the home as beneficial joint tenants, the right of survivorship will apply.

If the deceased was the sole owner of the home, or a beneficial tenant in common, the deceased’s interest will form part of the succession estate and will be distributed in accordance with intestacy rules.

no automatic right to receive the deceased’s share of the marital home

BUT the spouse may make an election to an appropriate matrimonial home.

Question 14

How can a surviving spouse elect to appropriate the marital home upon intestacy?

Answer 14

The surviving spouse must elect in writing to the PRs within 12 months of the date of the grant.

During that period the PRs cannot normally sell the home without the spouse’s consent.

Where their entitlement under the intestacy rules is lower than the value they are appropriating the spouse must pay the difference.

The home is valued as at the date of appropriation not the date of death.

The consent of the court is required where the home is only part of a building owned by the deceased or when the home is part of a business premises.

Question 15

What property does not form part of the succession estate?

Answer 15

The main types of property which will not pass to the succession estate are:

• Donationes mortis causa
• Discretionary pension scheme benefits
• Insurance policies written in trust
• Statutory nominations
• Property held as beneficial joint tenants
• Some other beneficial interests under trusts

Question 16

What is a donatio mortis causa?

Answer 16

A gift made in contemplation of death, conditional upon death, where the property reverts to the giver if they survive.

This will pass outside the succession estate.

Question 17

How are discretionary pension scheme benefits distributed on intestacy?

Answer 17

If the deceased was a member of an employer’s discretionary pension scheme then payments made by the trustees will not be included in his or her estate for distribution purposes.

These rules only apply to discretionary pension schemes.

Question 18

Which insurance policies pass outside the succession estate?

Answer 18

Where the benefit of the policy was written in trust for another person, the proceeds will not form part of the succession estate.

The insured has no beneficial interest under the policy. The proceeds belong to the beneficiaries nominated in the policy and vest on the insured’s death.

Question 19

What statutory nominations pass outside the succession estate?

Answer 19

• Friendly Society.
• Industrial Society.
• Provident Society.

The amount nominated cannot exceed £5,000

These pass outside the succession estate.

Question 20

How are bank accounts dealt with upon intestacy?

Answer 20

Account holders of joint bank accounts are legal joint tenants.

The account opening documents will usually make clear that the account is held as beneficial joint tenants.

Where there is an express declaration as to the beneficial ownership of the funds in the bank account, will be conclusive.

If there is no declaration of beneficial ownership, it will again be necessary to consider whether an implied trust has arisen.

NB: joint accounts passing on survivorship will pass outside the succession estate.

Question 21

How are interests in trust valued upon intestacy?

Answer 21

When identifying a deceased person’s succession estate you would not usually include the value of assets held in a trust in which the deceased had a beneficial interest.

This is because assets held in trust are usually distributed in accordance with the terms of the trust deed, not the will of a deceased beneficiary or the application of the intestacy rules.

Question 22

How are funeral costs paid?

Answer 22

Funeral costs are payable from estate funds.

Question 23

What kind of grant of PR is appropriate on intestacy?

Answer 23

Letters of Administration.

Application involves provided information to the Probate Registry by completing and posting a paper application, or submitting an online applicatin and supporting documentation.

There is a probate registry fee.

Question 24

When will a spouse not inherit under the intestacy rules?

Answer 24

where a judicial separation order has been made, instead, could still claim under the IDPA.