Wills - Intestacy (2) Flashcards
Broadly, what does intestacy comprise?
Intestacy: Intestacy applies to the estate of an individual who dies with no valid will (full intestacy) or to any part of their estate that does not pass by will (partial intestacy) - unless it is property that passes independently.
(1) Order of Distribution: Intestacy assets pass according to a statutory order (s46 AEA 1925).
(2) Classes: Intestacy assets are divided amongst the class or classes of persons ranking highest in this order.
What is the order of distribution where a spouse and an issue are alive?
Spouse and Issue: Estate assets should pass to a surviving spouse and direct descendants (issue) at first instance. Spouses must survive the deceased by 28 days to inherit. The estate is divided as such:
(1) Chattels: All personal chattels pass to the spouse (excludes money, business property, and investments).
(2) Statutory Legacy: Spouse inherits the next £322,000 free of tax and costs. The base rate of interest is applied to this sum from the date of death to payment. If there is less than £322,000, the spouse inherits everything.
(3) Remainder: The remainder of the estate after debts is split in half between spouse and issue.
Spouse: Inherits absolutely.
Issue: Inherits on statutory trust (below).
What is the order of distribution where there is a surviving spouse but no issue?
Spouse Only: The estate after debts passes wholly to a surviving spouse if there are no surviving issue, provided the spouse survives the deceased by 28 days.
What is the order of distribution if there is no surviving spouse?
Class of Persons: If the deceased is not survived by a spouse for 28 days, the estate after debts passes wholly to the class of persons falling highest in the statutory order, or their issue for statutory trust classes (s46).
(1) Issue: On statutory trust.
(2) Parents: Equally if more than one.
(3) Siblings: On statutory trust.
(4) Half-Siblings: On statutory trust.
(5) Grandparents: Equally if more than one.
(6) Blood Uncles/Aunts: On statutory trust.
(7) Blood Half-Uncles/Aunts: On statutory trust.
(8) Bona Vacantia: To the Crown/Duchy of Lancaster/Duke of Cornwall.
What does statutory trust mean?
Statutory Trust: Division on statutory trust means assets are divided per stirpes. Surviving members of that class share equally, and issue of predeceased members of that class take their direct predeceased ancestor’s share equally.
(1) Surviving Member: At least one member of the class, including issue of that class, must survive to inherit, provided no persons of a higher class do the same.
(2) Child Member: A child inheriting on statutory trust gains a contingent interest. This means they will inherit on attaining 18 or marrying. If they do not, the share returns to the members of the class (or their child if relevant).
>If there are no remaining members, the estate passes to the next highest class.
(3) Example: Deceased has three children. One is predeceased, but had two children. Per stirpes, the estate is divided equally amongst the three children. The deceased child’s share passes to their two children equally. The estate is therefore split: Child 1 (⅓); Child 2 (⅓); Grandchild 1 (⅙); Grandchild 2 (⅙).
How is the family home divided?
The Family Home: A surviving spouse can require the administrators to appropriate the deceased’s interest in the family home to them in full or partial satisfaction of their entitlement, unless they are themselves the sole administrator.
(1) Occupation: The surviving spouse must have occupied the house on the death of the deceased.
(2) Notice: The spouse must write to the administrators within 12 months of grant. They cannot sell of or dispose of the home without the spouse’s written consent before the end of this period, even if no notice is made.
(3) Equality Money: If the interest is worth more than the spouse’s entitlement, it can still be appropriated, but must be compensated by ‘equality money’ in respect of the outstanding value.
Who does ‘spouse’ refer to?
Spouses: ‘Spouse’ refers to legal spouses and civil partners of the deceased, who have survived for 28 days (Re Park).
(1) Divorces and Nullities: Divorced spouses and nullified marriages do not count (Re Seaford). If a divorce finalised after death, the spouse can inherit.
(2) Cohabiting Partners: Unmarried cohabiting partners do not count as spouses (but may be able to claim against the estate at court).
Who does issue refer to?
Issue: Issue means direct descendents, i.e. children, grandchildren etc. The issue of the deceased inherit at first-instance, and then the issue of other statutory class members as appropriate if no direct issue survive.
(1) Step-Issue: Step-children are not issue (unless adopted).
(2) Adoption: Adopted children are issue (of their adopted parents).
>Adopted children retain interests they had in the estates of dead biological parents if they existed on adoption.
(3) Illegitimacy: Illegitimate children are issue.
>On their own death, it is presumed their father and father’s relatives are dead unless proven otherwise (unless the father is named on the birth certificate).
(4) Assisted Reproduction: Children of assisted reproduction are issue.
>Sperm donor children are issue of their birth mother and her legal spouse (or partner if consenting).
>Surrogate children are issue of the ‘commissioning parents’ (requires parental order).
What does bona vacantia mean?
Bona Vacantia: If no surviving relative or issue can be found, the estate will pass under an ancient common law right known as ‘Bona Vacantia’. In practice, relatives can usually be located by modern technology.
(1) The Crown: Generally, the estate passes to the Crown, to be used as taxed money.
(2) Duchy of Lancaster: Estates in Lancaster pass to the Duchy of Lancaster, for charity.
(3) Duke of Cornwall: Estates in Cornwall pass to the Duke of Cornwall, for their benevolent charitable fund.
(4) Reasonable Provision: Non-inheriting dependents of the deceased can apply for reasonable provision from the inheriting party, provided they have exhausted the statutory provision claim route.
