Section 1 - Intestacy; Family Provisions and More

Question 1

Can all assets be devolved by Will?

Answer 1

The devolution of certain assets is fixed regardless of whether there is a Will. For instance, property held as beneficial joint tenants passes by the right of survivorship.

Question 2

How do the rules of intestacy apply to a Will?

Answer 2

The intestacy rules apply to assets which can pass by Will, but which have not been disposed of by the Will. This may be because there is no valid Will or because the Will fails to deal with all the assets (partial intestacy)

Question 3

What is Partial Intestacy?

Answer 3

Where a Will fails to deal with all the assets belonging to the testator’s estate.

Question 4

What is a IPFD Claim?

Answer 4

If cohabitees, relatives or dependants feel the intestacy rules do not make adequate financial provision for the, they may bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975 which provides that the court is not bound to assume that the intestacy rules make reasonable provision for the next-of-kin.

Question 5

Who does a person’s estate pass to if they have no living relatives?

Answer 5

The property passes to the Crown, Duchy of Lancaster or Duke of Cornwall.

Question 6

What is intestacy?

Answer 6

An ‘intestate’ is a person who dies without making a Will or a testator who has a Will which does not satisfy the legal requirements as outlined in section 9 of Wills Act 1837, i.e. the Will does not satisfy the requirements in terms of how it should be legally attested (signed) and witnessed.

Question 7

What section in succession law provides a set procedure for how an estate of the intestate will be distributed and who is entitled to inherit from the intestate’s estate?

Answer 7

Section 46 of the Administration of Estate Act 1925.

Question 8

What effect can intestacy have on family and friends of the intestate?

Answer 8

People they wish to include will not inherit and certain people who the deceased would not have included in his Will may well gain from their estate. This can have the impact of leaving an individual’s estate in disarray as this could mean an estate is not dealt with in a way which the deceased would have wanted.

Question 9

The new rules of intestacy are easier to understand and more in line with the public’s expectations of how an estate is divided when someone dies without leaving a Will. However, it is still important to make a Will for what 3 reasons?

Answer 9

1. The intestacy rules may not be the most tax efficient manner for your estate to be administered.
2. The intestacy rules may not be suitable for your family situation.
3. If you have a partner but are not married, under the intestacy rules they do not have a right to inherit anything.

Question 10

Deceased dies leaving a spouse/civil partner but no children.(Parents and/or siblings survive). How do the rules of intestacy apply?

Answer 10

Spouse/civil partner receives whole estate. Parents/siblings do not receive anything.

Question 11

Deceased dies leaving a spouse/civil partner and children. How do the current rules of intestacy apply?

Answer 11

Spouse receives:

• The first £250,000
• Personal chattels
• Half of the estate outright

Children receive the remaining half of the estate at age 18.

Question 12

What factors will affect the amount an individual would inherit through the rules of intestacy?

Answer 12

• It will depend on how much is in the intestate’s estate at death.
• The line of blood relatives which the intestate leaves behind.
• Any stepchildren in the family could be excluded from the deceased estate.
• The imposing of ‘per stirpes’ in regards to intestacy gifts to ensure that these gifts under the statutory distribution will not fail.

Question 13

What does ‘Per Stirpes’ mean?

Answer 13

Latin, By roots or stocks; by representation. A term used to denote a method used in dividing the estate of a person. A person who takes per stirpes, sometimes called by right of representation, does not inherit in an individual capacity but as a member of a group.

Question 14

What problem could a married couple run into with regards to the rules of intestacy if they wish their surviving spouse to inherit their entire estate?

Answer 14

This could cause a problem and not happen it the net value of the estate is greater than £250,000. Although with smaller estates this may not be a consequence, whereas with larger estates it will be a problem.

Question 15

What problem could a married couple run into with regards to the rules of intestacy if they don’t wish their spouse/civil partner to inherit anything.

Answer 15

Without the use of the Will which expresses what is to be done in regards to distribution it will go to the surviving spouse.

Question 16

What does ‘issue’ in relation to succession law mean?

Answer 16

‘Issue’ is the testator’s bloodline - children, grandchildren etc.

Question 17

What rule in succession law typically applies to joint property?

Answer 17

The rule of survivorship or as it is known in legal circles - ‘Jus accrescendi’.

Question 18

How does the rule of survivorship work?

Answer 18

The last surviving co-owner who holds such an interest will take the whole on the death of the other owners.

This will also apply to assets such as bank accounts and other property held in this manner.

Question 19

Case Study

John divorces his wife with whom he has 3 children and enters a civil partnership with Andrew.

John dies without making a Will leaving an estate of £200,000.

What will be the result?

Answer 19

As we have seen under the rules of intestacy, Andrew will take all of John’s estate and this will leave John’s children without any provision.

This is very likely not what John would have wanted as it leaves no provision for his children.

Question 20

Case Study

Graham is married, has 3 children and dies without a Will, leaving an estate of £400,000 in cash with no other assets.

Graham would have wanted his wife to have full access to all his money to use in the way she wanted.

What will be the result?

Answer 20

The rules of intestacy would only give his wife the right to the first £270,000 and the remainder to be split between his wife and the 3 children (50% to spouse and 50% to children)

Question 21

What is the definition of ‘Chattels’?

Answer 21

Tangible movable property, other than any such property which - consists of money or securities for money, or was used at the death of the intestate solely or mainly for business purposes, or was held at the death of the intestate solely as an investment.

Question 22

Describe 3 ways a deceased individual may be intestate.

Answer 22

1. Did not make a Will.
2. Revoked a Will that he had made, by an action such as: physically destroying the Will with the intention of revoking it (section 20, Wills Act 1837(WA 1837)) or marrying or entering into a civil partnership after making a Will. Either act immediately revokes a Will (sections 18 and 18B, WA 1837), unless the Will states that the testator is making it with the intention of marrying or entering into a civil partnership with a particular individual (sections 18(3) and 18B(3), WA 1837).
3. Made an invalid Will

Question 23

Where in succession law is the order of entitlement set out under the rules of intestacy?

Answer 23

Section 46 of the Administration of Estates Act 1925.

Question 24

What does it depend on for a family member to have a right to entitlement?

Answer 24

The relationship to the intestate and whether any closer relatives have survived.

Question 25

What role do the personal representatives of the intestate play?

Answer 25

1. Hold on statutory trust all assets not disposed of in the Will and have the power to sell the assets (s33, AEA 1925).
2. They must pay the funeral and administration expenses and any debts of the deceased.

Question 26

What is the residuary estate and how is it distributed when a person dies intestate?

Answer 26

The balance remaining (after setting aside an amount to meet any cash gift in the Will if the individual is partially intestate) This is then shared among family under the intestacy rules on distribution.

Question 27

What power do PR’s have if they hold land as trustees?

Answer 27

They have the power to transfer the land to adult beneficiaries who are absolutely entitled to it and who have capacity, whether or not they agree to this (s6 Trusts of Land and Appointment of Trustees Act 1996)

Question 28

What must not happen to personal chattels of an intestate?

Answer 28

They must not be sold except in special circumstances, unless the proceeds are required to pay expenses or debts (section 33, AEA 1925)

Question 29

What do statutory trusts establish?

Answer 29

• Membership of a class of beneficiaries

- The terms on which the beneficiaries take the assets

Question 30

What is the meaning of “issue” under the rules of intestacy

Answer 30

The term “issue” includes all direct descendants of an individual. Adopted children and illegitimate children have the same right to benefit from their intestate parent’s estate as children born of the parent’s marriage. Stepchildren are not included as issue.

Question 31

Case Study
Jeff dies intestate and is survived by his wife Jane and their children Virgil (16) and John (an adult who has a son Gordon (4)). Jeff’s son Scott died five years ago, leaving two children, Penny (17) and Alan (14).

Jeff’s estate consists of a house worth £1 million (held as joint tenants with his wife Jane), investments worth £1,450,000 after payments of debts, funeral and other expenses, and personal chattels worth £50,000.

How will Jeff’s estate be distributed?

Answer 31

Jeff’s share of the house passes to Jane by survivorship.

Personal chattels pass to Jane: £50,000.

Jane receives the statutory legacy of £270,000.

Jane receives a life interest in half of remainder of the residuary estate (£600,000) with remainder to the children on the statutory trusts (pot A).

Jeff’s children receive the other half of the remainder (£600,000) on the statutory trusts (pot B)