What Happens When You Die Without A Will – Intestacy Explained

Intestacy is the term used when an individual dies without a legal Will in place. In such a situation, their money and estate is shared in accordance to the Rules of Intestacy.

This is not an ideal situation for any person, as it potentially creates trouble for their beloved family members, friends and business partners who are left to deal with the money and the estate.

However, since over 40 per cent of UK citizens do not have a legal Will, this is a common occurrence.

In case you are wondering how much does a Will cost, let us tell you that the amount varies depending on the type of the Will and the complexity of your estate. If you don’t have a Will, we strongly recommend you to make one as soon as possible!

Rules of Intestacy

The rules of intestacy determine a rigid order of people who tend to benefit from the estate of an intestate individual. The order is as given below:

  1. Spouse or civil partner
  2. Children or grandchildren
  3. Parents
  4. Brothers and sisters
  5. Grandparents
  6. Aunts and uncles

The highest existing and surviving relative in the order is given the most priority. For instance, if the deceased has a surviving spouse of civil partner, all of the deceased’s estate will be passed on to them (unless the total value of the estate exceeds £250,000).

If the given deceased’s estate is more than £250,000, and the deceased has children, then the spouse or the civil partner gets to keep all the assets up to £250,000 along with the possessions. The remaining estate is divided equally among the spouse or the civil partner and rest among the surviving spouse or the civil partner and deceased’s children or grandchildren (in case the children have already died).

In case, there is no surviving spouse, civil partner or descendants, the entire estate is given to the next highest relative in the order. If the deceased happen to have no surviving relatives, then their estate is given to the Crown. Such a situation is termed as bono vacantia.

This same order also helps in determining who will act as an administrator for the estate. An administrator is responsible for sharing out the estate and taking care of the inheritance tax or its related issues.

Exclusions in Intestacy

It is important to make a note that none of the following mentioned things are included in the rules of intestacy.

  1. Cohabitants or unmarried partners
  2. Common law spouses
  3. Ex-spouses or civil partners
  4. Step-parents or the stepchildren
  5. Close friends

This implies that in case you die without a legal Will, then none of these relations of friends will benefit from your money and estate.

Exceptions to Intestacy

During some rare circumstances, it is almost possible that a part of the estate of someone who died intestate has gone to someone who normally would not benefit from it. For instance, you are eligible to make a claim for financial provision under the Inheritance Act of 1975.

This is the solution for people who were dependent on the deceased when they died, but do not stand a chance of inheriting the estate under the rule of intestacy.

The success of your claim is dependent on several factors, including how much money you have and how much does the other claimants and beneficiaries have, the size of the estate and what are your future needs likely to be.

Financial provision is awarded in numerous forms, such as, the consistent payments or lump sums. However, all this will be decided by the court and is based on what they think would be the most suitable for the given circumstances.

One can apply for financial provision even if the deceased did have a legal Will. The claim is needed to made within six months of the Grant of Representation being given. Additionally, a solicitor will be needed for guidance.

Understanding the Deed of Family Arrangement

It is even possible to make an inside arrangement among the beneficiaries and executors who would allow some of all of the estate to be passed onto someone else.

For instance, if the deceased had a daughter and a stepson, the stepson would not legally benefit from the estate under the rules of intestacy. However, the daughter and stepson could set up a Deed of Family Arrangement, wherein they are allowed to share the estate.

A Deed of Family Arrangement is only valid if all the affected beneficiaries and executors together agree, and if all the beneficiaries are above 18 years old. This arrangement can also be used to make gifts without having to incur extra inheritance tax. Since making such an arrangement is a complex task, it is advisable and wise to seek legal guidance.

Article written by admin

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