Introduction
The order of priority on intestacy is set out in Section 46 of the Administration of Estates Act 1925 (AEA 1925), as amended. The rules in relation to a surviving spouse also changed significantly following the Inheritance and Trustees’ Powers Act 2014 (ITPA 2014).
The current intestacy rules state that, initially:
- Where there is a surviving spouse and no children, the spouse is entitled to the entire residuary estate.
- Where there is a surviving spouse and children, the spouse is entitled to the ‘personal chattels’ (movable property, but not money) of the deceased and a statutory legacy (following the enactment of The Administration of Estates Act 125 (Fixed Net Sum) Order 2020, currently £322,000), including interest from the date of death. The residuary estate, if any, is then divided equally between the spouse (50%) and the children (50% divided between however many children there are).
- – Prior to ITPA 2014, 50 per cent of the residue should have been held on a life interest trust for the spouse (rather than an outright entitlement), which was often misunderstood or incorrectly implemented.
There is a ‘survivorship period’ imposed for a spouse (a time in which they cannot inherit) of 28-days. If the spouse dies within that time, they are treated as having not survived the deceased. The next class of beneficiary becomes entitled, for whom there is no survivorship period.
What happens to an intestate estate if there is no spouse?
Where there is no surviving spouse, the following classes of beneficiaries are entitled to the estate. If there is no-one within a class, the persons in the next class become entitled:
- Initially, the children of the deceased receive the estate. This includes legitimate, illegitimate or legitimated children, as well as children adopted by the deceased. A child of the deceased adopted by another person will not be entitled, unless the adoption occurred after the death. This remedies the situation where a child may be adopted by another person following the death of their parent and as a result loses their entitlement to their parent’s estate. Step-children or foster children are not entitled under intestacy. If a child has died before the intestate, their children will inherit in their place, each equally sharing their parent’s entitlement.
- If there are no children, the parents of the deceased are entitled in equal shares when both are alive, or solely to the surviving parent. In addition, the Family Law Reform Act 1987, as amended by ITPA 2014, states that where parents were unmarried when the intestate was born and the father (or parent other than the mother) is not named on the birth certificate or any record of birth, there is a presumption that the father, and any person related to the intestate solely through their father, died before the intestate unless the contrary is shown. This means that it may not be necessary to attempt to locate a missing father, or any other relatives on the father’s side, unless there is evidence that they are alive.
- If no parents survive, siblings described as ‘of the whole blood of the deceased’, meaning siblings who share both parents, or their issue, are entitled. If a sibling has died before the intestate, leaving children of their own, these children will benefit in their place, sharing their late parent’s entitlement.
- – To illustrate this point: Mary has two brothers, Phil and Josh. Phil has four children and Josh has two children. Both die before Mary who dies intestate, leaving her nieces and nephews as the only persons entitled to her estate. Half of the estate goes to Phil’s four children and half to Josh’s two children. Although they are all related to Mary in the same degree, the share of the estate that they receive depends on their own family tree.
- If no whole blood siblings survive, siblings of ‘half-blood’, meaning with one parent in common with the deceased, or their issue, are entitled. The half-blood siblings may be related to the deceased through their mother or father.
- If there are no siblings of whole or half blood, the grandparents of the deceased receive equal shares of the estate.
- If there are no grandparents, then aunts or uncles of the whole blood, or their issue, will be entitled to an equal share of the estate.
- If there are no aunts or uncles of the whole blood (or their issue), then aunts or uncles of the half blood, or their issue, will be entitled to an equal share of the estate.
- If there are no aunts or uncles of the half blood or their issue, then the Crown, Duchy of Lancashire or Duke of Cornwall, will inherit. The Treasury Solicitor will deal with the estate. The Gazette lists these ‘unclaimed estates’.
It should be noted that an estate is held on statutory trusts for beneficiaries under the age of 18. When they reach 18 (or marry earlier) they become entitled to their share of an estate. If they die before becoming entitled, their share is redistributed among other beneficiaries.