What happens if someone dies and there’s no will?
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It’s estimated that around 57% of the British adult population have either never written a will or have one that is out of date or invalid. For many of them, they feel that this is something that they can attend to later on in life. For others, they see it as a potentially expensive and complicated process that simply isn’t necessary.
This is also despite the fact that there are frequent campaigns are run by everyone from charities to legal firms to encourage will writing, often with pretty limited success. But having a proper will written and ready when you die, is one of the most important pieces of life administration that you can have in place, both for your own peace of mind and for the people who will be left behind.
This article will explain exactly why this is, outline the consequences of not having a will and, hopefully, encourage you to write one if you haven’t already done so.
When anyone dies, one of the first important things to be done is to find the will. In it, there should be all the information needed to discover how the person wanted their estate – in other words, their property, money, investments and possessions – to be divided up and passed on after they are gone. It can also contain information such as details of their wishes for their funeral and even where they might like their ashes to be scattered if they are cremated.
However, if there is no will, or one can’t be found, the person is said to have died “intestate”. In the absence of any direct instructions about their estate, this means that the rules of intestacy will apply. Put briefly, these layout the order in which partners, blood relatives and adopted children will inherit the estate as well as stipulating how it should be divided.
In some cases it can be quite straightforward and may even closely reflect what might have been included in a written will. But, as you’ll see, the rules are fairly inflexible depending on particular situations.
An additional issue of someone dying intestate is that they will not have nominated an executor to handle the distribution of their estate. This means that a family member will have to apply to a body called the Probate Registry for permission to be made an administrator. There is a strict order of priority to who can apply which is:
Alternatively, an official legal representative can take on the role, a service that we have a, great deal of experience of providing at Eatons.
Just as there is a fixed order of priority when it comes to nominating an administrator, there is also one that governs who will inherit an estate.
If there is a surviving married or civil partner, they will be the first in line to inherit the estate. The one stipulation is that they must have still been married or in a civil partnership at the time of death. Even if they were separated and living apart, they will still inherit money, savings and possessions. Property is a little more complex and we will explain this a little later.
If there are children, the picture becomes more complicated. This is because if the estate is worth more than £270,000 they will generally stand to inherit a share of the amount over this figure. If it is under £270,000 and there is a surviving partner they may receive nothing. This is because, in all cases of intestacy, the first £270,000 of any estate automatically goes to the partner. Any amount over this is shared equally between the partner and the child, or children.
To give an example, Sarah was married to Simon and they had a daughter called Angela. Sarah died without leaving a will. Her estate is worth £450,000. After Simon inherits his share of £270,000, the estate that is left is worth £180,000. Angela can have half of this - £90,000.
On the other hand, if there is no surviving partner then the children, including adopted children, will receive all of the estate to be shared out equally between them. However, there is also the stipulation that children will not receive their part of the estate either until they reach the age of 18 or they get married or enter into a civil partnership.
A grandchild or great-grandchild can inherit from the estate of an intestate person as long as their parent or grandparent has died before the intestate person. They can also qualify in some very unusual circumstances, for example when their parent is alive when the intestate person dies before reaching the age of 18 without marrying or entering a civil partnership.
In this case, the grandchildren and great-grandchildren will inherit equal amounts of the estate to which their parent or grandparent would have been entitled.
For example, Colin has two sons, Richard and Julian. Julian has one daughter, Eve. Julian dies when Eve is two years old. Colin dies intestate when she is 20. Eve then inherits Julian’s share of Colin's estate.
Parents, brothers, sisters, nieces and nephews of the person who has died intestate might also inherit under the rules of intestacy, but this is going to depend on a number of circumstances and conditions:
While it is quite unusual for inheritances to have to go so far down the list of priority, it’s by no means unheard of. And the more complex the situation, the more confusion and friction it can cause. Another good reason to avoid intestacy from occurring.
There is also a fairly long list of people who cannot inherit under the rules of intestacy. These include unmarried partners, who are sometimes incorrectly called “common-law” partners. This is even the case if they have lived together for many years.
Divorced partners are also excluded - and this brings up another important point for people who may actually have a will leaving part or all of their estate to an ex-partner. Divorce nullifies any will made naming the divorced person as the law treats them as having pre-deceased the holder of the will.
Relations by marriage such as brothers, sisters or parents in law are also excluded as are friends, neighbours and other acquaintances.
Similarly carers of any capacity cannot receive anything unless they have been specifically named in a will, whether in an original version or added in an amendment that is known as a codicil.
Property is generally the single most valuable asset in an individual’s estate but is treated slightly differently to other parts of it when it is jointly owned. This can cause even more issues when one of the joint owners dies intestate. This is because there are two different forms of ownership, joint tenancies and tenancies in common.
If the partners were joint tenants when the first partner dies, the surviving partner will automatically inherit the other partner's share of the property. But, if they are tenants in common, the surviving partner does not automatically inherit the other person's share.
Couples may also have joint bank or building society accounts. If one dies, the other partner will automatically inherit the whole of the money. Property and money that the surviving partner inherits do not count as part of the estate of the person who has died when it is being valued for the intestacy rules.
For example, Tim and Ann are married and own their home as beneficial joint tenants. They have a child called Amy. Tim dies intestate leaving the jointly-owned home worth £300,000, and £50,000 in shares in his own name. The flat goes automatically to Ann. This leaves an estate of £50,000 which also goes to Ann, as it is worth less than the £270,000 threshold. This means that, by law, Amy unfortunately receives nothing.
But if Tim had owned the flat in his name alone, his estate would have been worth £350,000 and, under the rules of intestacy, Ann would get the first £270,000 leaving an estate of £80,000. Ann would get £40,000 and Amy would get £40,000 too.
In some cases, people who have inherited under the rules of intestacy may want to redistribute their inheritance – for example in the first of the above situations in which Tim’s daughter Amy would receive nothing by law but where Ann felt she should receive some inheritance.
This is done by arranging something called a deed of family arrangement or variation and has to be carried out within two years of the death. For this to be possible, everyone who has inherited under the rules of intestacy would have to agree and a legal professional would be able to make all of the arrangements.
In some instances, a situation arises in which there are no surviving relatives who can inherit under the rules of intestacy. When this happens the whole estate passes to the Crown. This is a situation that’s known as bona vacantia and a solicitor appointed by the Treasury is responsible for dealing with the estate.
Even if this is the case, it’s still possible to apply for a grant from the estate if there is a good reason and all applications are judged on their merits.
For example, someone who was living with the deceased for at least two years up until they died, but was not married or in a civil partnership, can ask for reasonable financial help from the estate.
Another example could be for individuals who had always been treated by the person who died as a child of their family.
All applications need to be made within certain time limits, but in some situations these can be extended. If successful, regular payments or a lump sum from the estate might be granted or even a transfer of property may be allowed.
As you can see, dying without making a will sets up quite a number of issues for all concerned – issues that may make an already difficult time even more upsetting when no will is found.
When balanced against the speed and ease with which it’s possible to write a simple will it’s definitely a situation to avoid. And, the more complex and involved your estate, the more important it may be to make your wishes known.
If this article has given you cause to think about writing or replacing a will, we will be happy to take care of everything for you. We can also put you in touch with independent advisors who can help with Inheritance Tax Planning. And, should you even find yourself in a situation where a family member has died intestate, we will be able to help with this too.
Our expert team have all the experience and knowledge you may need. So simply contact us whenever is most convenient for you.
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