When someone passes away without leaving a valid Will behind, their estate must be distributed according to the rules of intestacy. These rules can be complex; however, they are vital to understand so you can ensure your assets are distributed in line with your wishes and values.
In this guide, we’ll explore the rules of intestacy in more detail, including how your estate would be distributed and how the rules vary depending on your circumstances.
The Rules of Intestacy: Definition and Variations
A common misconception in estate planning is that if you pass away without a Will, everything will pass to your spouse or civil partner if you are married. However, this is a myth – the rules of intestacy dictate where your assets will go without considering your relationships, who are most in need, or your personal preferences.
The rules vary depending on your circumstances, and different rules apply if you live in Scotland.
Married/Civil Partnership With Children
If you are married, your spouse will be entitled to all the assets, including property up to the value of £270,000, plus all of your personal possessions, regardless of their value. If your estate amounts to more than £270,000, your spouse will receive half of the remaining value, and the remainder will be evenly split between your children.
For example, if your estate is worth £300,000, your spouse would receive £285,000 – the first £270,000 plus half of the £30,000 remaining. If you have two children, they would then receive £7,500 each.
If you own property together, this could affect how your estate is shared. There are two ways to own property together: as beneficial joint tenants and as tenants in common. Joint tenants own the entire property together, and when one party passes away, the property automatically passes to the other owner.
Tenants in common own a separate share of the property together. This does not have to be an equal split – you may own 75%, and your partner may own 25%. Therefore, you can leave your shares to whomever you would like to.
If you own your home as beneficial joint tenants, your property would automatically pass to your partner and not be included in your estate. If the remainder of your estate, excluding your home, does not exceed £270,000, your children would not inherit anything.
Married/Civil Partnership Without Children
Your spouse would receive all proceeds from your estate.
Unmarried With Children
Children receive the proceeds from the estate when they turn eighteen. All children receive an equal share, and biological and adopted children are treated equally. Grandchildren and great-grandchildren can inherit their parent’s claim if they have passed away.
If you have a long-term partner but are not married to them, the rules of intestacy would pass over them entirely.
Unmarried Without Children
If you do not have children and are not married, your estate will pass to your relatives in the following order:
- Uncles and aunts
Unmarried Without Living Relatives
Your estate would pass to the Crown in what is known as bona vacantia.
Intestacy in Scotland
In Scotland, the rules governing intestacy differ from those in England and Wales. If you pass away without a valid will, your surviving spouse or civil partner is entitled to “prior rights.” These include a share in the family home valued up to £473,000 (assuming the partner was a resident at the time of death), furniture valued up to £29,000, and moveable assets worth up to £50,000 (if you have children) or £89,000 (no children).
The remainder of the estate will be divided among your surviving family members based on their “legal rights,” which are shared between the spouse and any children or other immediate family members. If you have no surviving spouse, your estate will be shared among your children. If you have no spouse or children, the estate will be distributed among your immediate family according to the Succession (Scotland) Act rules.
Even if there is a Will in place, your loved ones may have to deal with partial intestacy if it doesn’t cover the entirety of your estate. For example, if you don’t specify what should happen to the remainder of your estate when all debts and inheritances are paid out. Or, if some beneficiaries have passed away and no others have been named, these assets would be subject to intestacy law.
Partial intestacy can add to the complexity of an estate’s administration and may lead to additional legal fees and delays. However, you can avoid it by reviewing and updating your Will when necessary. It’s essential to check a will every few years or after any significant life changes, such as marriage, divorce, or child birth. This is to ensure that it accurately reflects your wishes and addresses changes in the law that may impact the estate’s distribution.
Deed Of Variation
If one of your loved ones is unhappy with how the estate has been shared under the rules of intestacy, they can rearrange how things are distributed. This is known as a deed of variation or a deed of family arrangement.
This can also be used if a Will has been left behind, but people are not satisfied with how the estate has been distributed. Everyone’s circumstances are different, but some of the main reasons people want to amend how assets are shared out include the following:
- They want their share to benefit someone else
- They want part of their share to go to charity
- Nothing is being passed to children or grandchildren
- The rules of intestacy have excluded someone, such as a child or unmarried partner
- To distribute the estate more evenly
Everyone affected by these changes must agree before anyone can redistribute the estate. They must understand the potential consequences of making these changes and the problems that could arise if one beneficiary does not consent or legally cannot. Any changes must be made within two years of the person’s death.
Start Your Will Today
The rules of intestacy dictate where your assets should go if you don’t have a Will. However, they may not reflect your wishes or consider modern family structures and relationships between unmarried partners and step-children.
With a Will from the expert paralegals at The Planning Bee, the rules of intestacy don’t have to take over your estate plan. Start writing your Will to ensure your loved ones receive the inheritance you want for them, not the one the rules of intestacy will give them. Get in touch with us today to arrange your free consultation