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Intestacy

• Many people die intestate i.e. without having made a will. In such circumstances it is likely that the court will distribute the estate in accordance with the rules in the Intestate Estates Act 1952, as amended.

• To summarise, in England and Wales, these rules state:

  1. In the event of the spouse only surviving, the spouse would be entitled to the whole estate.

  2. Where the spouse and children are left, the spouse is entitled to the deceased's personal chattels, up to £125,000 of the value of the estate, plus a life interest i.e. income only, in half of the balance. The children take half of the balance between them at 18, or if they marry before age 18, the balance goes to them on the death of the surviving parent.

  3. Where the survivors are spouse and family but no children, the spouse may take the personal chattels, up to £200,000 of the estate's value, plus half of the balance. The remainder is distributed among other surviving family members.

  4. Where there is no spouse, the children inherit the whole estate; where no children, it would go to the parents. Precedence then follows through blood relatives only; brothers and sisters if the parents are not alive; nephews and nieces, half brothers and half sisters or their children; then grandparents or uncles and aunts if none, then half uncles and half aunts, or their children. Children include adopted and illegitimate children, but not step children. Ex-spouses, through divorce or legal separation, do not share.

  5. If there is no one to claim, the estate goes to the crown, the Duchy of Lancaster or the Duchy of Cornwall.

  6. 'Common law' wives can obtain benefit under the intestacy rule.

• In Northern Ireland, point (i) above is followed. point (ii) changes so that the surviving spouse takes income only from half the residue of the estate where there is only one child, but income from one third where there is more than one child. Point (iii) above remains the same, as do points (iv) and (v).

• In Scotland, intestacy is governed by Statutory Prior Rights and Legal Rights, with Prior Rights taking priority. The rules are intended to ensure that the surviving spouse is left with house and cash, and cannot be overridden by a will.

1. Prior Rights entitle the surviving spouse to the house or a cash sum of up to £110,000, and furniture up to the value of £22,000, plus £85,000 cash where there are no children, or £35,000 where there are children.

2. Legal Rights affect movable property not distributed under Prior Rights. Where spouse only survives, he/she qualifies for half of the remainder of the movable property after deducting outstanding debts, funeral and certain administration expenses. Where children only survive, they are entitled to half of the moveable estate. Where children and spouse survive, the surviving spouse gets one third of the movable estate, the children one third, the remainder becoming 'free estate', which is distributed to remaining family, or the Crown if no one qualifies.

• If this exercise has been avoided until retirement, then retirement must be the time to get this and other things in order.

• The will document often uses the phrase "last will and testament". A testament, strictly speaking, deals only with the testator's personal property, not any land that forms part of the estate.

• Informal or nuncupative wills may merely be spoken by the testator, providing it is in the presence of a credible witness, and provided it is clearly an unforced expression of wish, clearly intended to have testamentary effect. Such 'wills' may constitute the will of people in the armed forces, provided they are on active service away from barracks, whether aged 18 or not.

REMEMBER You should not use any information contained on this page as the basis of any action until you have discussed matters with your financial adviser.