Intestacy and Succession

Question 1

When are the intestacy rules followed?

Answer 1

When the deceased did not leave a valid will or the will does not deal with all the assets in the estate.

Question 2

Where are the intestacy rules found and what are they?

Answer 2

Administration of Estates Act 1925

They determine who inherits and what each beneficiary receives.

Question 3

What is a succession estate?

Answer 3

Property owned by the deceased which does not pass under the Will or the intestacy rules.

Question 4

Do you need a grant of representation to to deal with assets which do not form part of the succession estate?

Answer 4

No - this is helpful because it means that assets can be dealt with early on as they do not have to go through probate.

Question 5

What are the main types of property which does not pass under the succession estate?

Answer 5

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

Question 6

What are the requirements for a donationes mortis causa?

Answer 6

There are three requirements for a deathbed gift:

1. The gift is made because the donor believes they may die imminently of a particular cause.
2. The donor makes it clear that the gift is conditional upon them dying, and that the property reverts to them if they survive.
3. The donor either parts with the property or something representing ownership of it.

Question 7

Discretionary pension scheme benefits

Answer 7

• Discretionary means it is not binding on trustee and it at their discretion
• This means that the deceased is not deemed to have entitlement to any payment from the scheme and therefore does not form part of their estate
• The benefit is usually released upon the production of a death certificate

Question 8

Insurance policies

Answer 8

If it was written in trust for another person then the policy will not form part of the succession estate

Question 9

Statutory nominations

Answer 9

Amount cannot exceed £5,000
Nominations can be made in any of the following accounts:
- Friendly society
- Industrial society
- Provident Society

Question 10

Beneficial co-ownership

Answer 10

Joint tenants: the property will automatically pass to the other joint tenants by survivorship. Therefore it does not pass into the succession estate.

Tenants in common: If the deceased was a beneficial tenant in common they have a separate divisible share in the trust property which is not extinguished upon their death. This will pass into the succession estate.

Question 11

Joint bank accounts

Answer 11

Joint owners will be legal joint tenants - meaning it does not pass onto the succession estate.

Question 12

Distributions under trusts

Answer 12

Life interest: does not form part of the succession estate

Remainder interest: passes to their estate

Discretionary trust: do not include

Question 13

Testate

Answer 13

The deceased left a valid will which deals with all the property forming their estate. Intestacy rules do not apply.

Question 14

Intestate

Answer 14

None the the property is disposed of by a Will. The intestacy rule apply to the entire estate.

Question 15

Partially intestate

Answer 15

Some but not all of the property is disposed of by the Will. The intestacy rules apply to any property which is not disposed of by the will.

Question 16

How long after can someone inherit under the intestacy rules?

Answer 16

The spouse must survive the deceased by 28 days. If they do not survive this they will not inherit.

Everyone else is entitled immediately following the death of the testator.

Question 17

What are issue?

Answer 17

Issue are children and remote linear descendants (grandchildren) and includes those who are legitimate, illegitimate, legitimated and adopted.

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

Question 18

What is the spouse and issue’s entitlement under the will?

Answer 18

Spouse and no issue: spouse inherits the entire succession estate absolutely.

Issue but no spouse: Spouse inherits the entire succession estate on statutory trusts.

Both spouse and issue:
Spouse: personal chattels, £322,000, one half of the residue.
Issue: other half of the residue on statutory trusts.

Question 19

What are statutory trusts?

Answer 19

2 limbs:

1. Contingency limb: each beneficiary must survive the deceased and reach the age of 18. Until satisfied, each beneficiary has a contingent interest. Once satisfied, each has a vested interest.
2. Substitution limb: If an entitled beneficiary dies before the intestate, their own issue can inherit in their place (provided they reach 18) - they can still pass onto their interest before reaching 18.

Question 19

Distribution order where there is no spouse or issue

Answer 19

S46 AEA 1925
1. Parents
2. Siblings
3. Half siblings
4. Grandparents
5. Uncles and aunts
6. Half uncles and aunts
7. The crown

If more than one person in each relevant category, the succession estate is divided equally.

Question 20

What are personal chattels?

Answer 20

“Tangible moveable property” excluding:

• money or securities for money
• property used by the intestate at their death solely or mainly for business purposes
• property held at the death of the intestate solely as an investment

Question 21

Can the spouse request the marital home?

Answer 21

They do not have an automatic right, but they can make an election to appropriate the home in full or partial satisfaction of their statutory entitlement.

They must do this within 12 months of the date of the grant.