The ‘Intestacy Provisions’ are a set of rules which set out how your estate will be divided amongst your relatives if you die without making a Will. These rules essentially work as a flow chart – if you do not have any living relatives in one category then you move on to the next until someone can be found to inherit your estate. If no living relatives can be traced and you do not have a Will, then your estate will ultimately be inherited by the Crown.
The Intestacy Provisions have recently been revised to change what happens if you die without a Will and are survived by a spouse or civil partner and children or grandchildren.
The revised rules state that all of your personal chattels together with the first £270,000 of your estate will be inherited by your spouse or civil partner. If your estate is worth more than £270,000 on your death, 50% of the remainder will go to your spouse or civil partner and the remaining 50% will be divided equally amongst your children. If any of your children have died before you then their own children will inherit in their place. Under the Intestacy Provisions, step-children cannot inherit your estate unless they have been legally adopted by you. Further, all biological children will inherit equally and when they reach 18 (or marry under that age), which may not always reflect your wishes.
This fixed sum of £270,000, known as the ‘Statutory Legacy’, was increased on 6 February 2020. Prior to this, the amount was set at £250,000 in October 2014. The Intestacy Provisions are reviewed and revised regularly and are therefore subject to change. If you rely on your estate being distributed on the basis of the Intestacy Provisions your estate will be distributed in line with the provisions in force at the date of your death, which, again, may not reflect your wishes.
If your estate is worth more than £270,000 spouse or civil partner may not inherit your whole estate automatically on your death. Note, however, that any property held in your joint names will generally pass to the survivor, depending on how it is held. Not only may this not reflect your wishes but it could also have Inheritance Tax consequences.
If you are not married, it is important to note that the Intestacy Provisions only recognise a spouse or civil partner. This means that if you are in a relationship but not married or in a civil partnership then your partner may not inherit anything. If you wish your partner to inherit all or part of your estate then you need to make a Will.
Always seek legal advice to ensure that you have control over what happens to your assets on your death. A Solicitor will be able to draft a Will to reflect your wishes and will also be able to advise you of additional inheritance tax reliefs which may be available to you, such as spousal relief, the Nil-Rate Band and the Residence Nil-Rate Band allowance. One final point, if you are dealing with the administration of an estate for someone who did not make a Will, then you should seek legal advice before distributing the estate to ensure that it is inherited by the correct beneficiaries.
If you would like to discuss making a Will or administering an estate without a Will, please contact our Trusts, Wills and Estates team for further information on 01423 566666
Published on 27 April 2020