Intestacy Flashcards
What is intestacy?
Intestacy occurs when an individual dies without a valid will, or when a will doesn’t fully dispose of their estate. The intestacy rules, found in the Administration of Estates Act 1925 (AEA 1925), determine how the estate is distributed. There can be total intestacy (no will or a will that fails completely) or partial intestacy (a will that doesn’t cover the entire estate)
What is the statutory trust in intestacy?
The intestacy rules impose a statutory trust over all the intestate’s property. This means the personal representatives (PRs) hold the property on trust. The PRs must pay funeral, testamentary, and administration expenses, and debts of the deceased. They can sell assets to cover these costs. The remaining balance, known as the ‘residuary estate’, is distributed to family members based on section 46 of the AEA 1925. The PRs are not required to sell assets, they have the power to appropriate assets to beneficiaries with their consent
Who is considered a spouse or civil partner under intestacy rules?
A spouse is the person legally married to the deceased at the time of death. A civil partner is the person in a civil partnership with the deceased at the time of their death. The nature or quality of the relationship doesn’t matter, only the legal status. A former spouse is excluded after a divorce is finalised. A void marriage is treated as if it never happened, meaning that a party to such a marriage is not a spouse. A voidable marriage is valid until a nullity order is made, and the party is a spouse until that time. Cohabitants have no entitlement under intestacy rules
What does ‘issue’ mean in intestacy?
‘Issue’ includes all direct descendants: children, grandchildren, great-grandchildren, etc. Adopted children are included, as are children whose parents weren’t married at the time of their birth. Step-children are not considered issue unless adopted
How is an estate distributed when there is a surviving spouse or civil partner and issue?
The spouse/civil partner receives:
○Personal chattels (tangible movable property not used for business or investment).
○A statutory legacy of £322,000 (as of 26 July 2023) plus interest.
○Half of the remaining residuary estate.
○The other half of the remaining residuary estate is held on trust for the issue. The spouse/civil partner must survive the intestate by 28 days to inherit. If the estate is worth less than £322,000, the spouse receives it all
What happens to the family home under intestacy?
If the family home is held as beneficial joint tenants, it passes by survivorship outside of the intestacy rules. If the home is in the deceased’s sole name or as tenants in common, it is part of the residuary estate. The spouse/civil partner can request the home to be appropriated towards their entitlement if they are living in the property. They may have to pay ‘equality money’ to the estate if the value of the property exceeds their entitlement
What are the statutory trusts for issue?
The statutory trusts determine how the issue receive their share of the estate:
○Children living at the intestate’s death are the primary beneficiaries.
○Children’s interests are contingent on reaching 18 or earlier marriage/civil partnership.
○If a child dies before the intestate, their children (grandchildren of the intestate) take their share equally (‘per stirpes’).
●If a child or issue die without attaining a vested interest but leave issue, they will be treated as having predeceased the intestate, so their own issue can inherit.
How is an estate distributed when there is a surviving spouse/civil partner but no issue?
The spouse or civil partner receives the entire estate absolutely. They must survive the intestate by 28 days
How is an estate distributed when there is no surviving spouse/civil partner?
The residuary estate is divided amongst the relatives in the following order:
1.Issue on the ‘statutory trusts’
2.Parents (equally, if both alive)
3.Brothers and sisters of the whole blood on the ‘statutory trusts’
4.Brothers and sisters of the half blood on the ‘statutory trusts’
5.Grandparents (equally, if more than one)
6.Uncles and aunts of the whole blood on the ‘statutory trusts’
7.Uncles and aunts of the half blood on the ‘statutory trusts’
8.The Crown, Duchy of Lancaster, or Duke of Cornwall (bona vacantia).
○Each category receives the entire entitlement if there is anyone in the category, meaning lower categories receive nothing. Beneficiaries except parents and grandparents take on the statutory trusts
What is bona vacantia?
Bona vacantia means vacant or ownerless goods. If no relatives are found, the estate passes to the Crown, the Duchy of Lancaster, or the Duchy of Cornwall. The Crown has discretion to provide for dependants or others who might reasonably have expected provision
How are adopted children treated in intestacy?
Adopted children are treated as the children of their adoptive parents and not their natural parents. They can inherit from their adoptive family and vice versa. Any contingent interest the child had from their natural family before adoption is preserved
How are illegitimate children treated in intestacy?
The intestacy rules apply regardless of whether parents were married. If the father’s identity isn’t known, it’s presumed the child isn’t survived by them or their relatives, unless proven otherwise or the father is on the birth certificate
What is the effect of the Human Fertilisation and Embryology Act 2008?
This Act confers legal parenthood for children born through assisted reproduction. The mother is the woman who gave birth. A husband is the legal father when donated sperm is used. A wife or civil partner is the other legal parent in same-sex relationships. A cohabitant can be named the legal father through notice. The act also addresses surrogacy where a parental order confers legal parenthood on the commissioning parents. A person treated as a parent under the act is treated as such for all purposes under the intestacy rules
