Dying without a will: who inherits under the intestacy rules?

Most people assume that their estate will automatically pass to those closest to them when they die. However, if you die without a valid will, you will be deemed to have died intestate and the law will determine who inherits your estate under the intestacy rules.

You may be considered to have died intestate if you have never made a will, you have revoked an existing will, you have destroyed a will with the intention of revoking it, or you have made a will that is subsequently found to be invalid.

WHO INHERITS UNDER THE INTESTACY RULES?

Who inherits your estate depends on which family members survive you. For these purposes, a spouse or civil partner includes same-sex spouses and civil partners, provided the marriage or civil partnership has not been legally dissolved. A surviving spouse or civil partner must survive you by at least 28 days to inherit under the intestacy rules.

Children include biological children, adopted children, and children born outside marriage. Stepchildren are not entitled to inherit under the intestacy rules unless they have been legally adopted.

Spouse or civil partner, but no children: The entire estate passes to the surviving spouse or civil partner.

Spouse or civil partner and children: Your spouse or civil partner will inherit:

• All personal chattels, such as household contents, furniture, jewellery, and vehicles.
• A statutory legacy, currently £322,000 for deaths occurring on or after 26 July 2023.
• One half of the remaining estate (known as the residue).

The other half of the residue will be shared equally between your children. If one of your children has predeceased you, their share will usually pass to their children. If your children are still minors at the time of death, their share will be held on trust until they are adult.

Children, but no spouse or civil partner: In the absence of a surviving spouse or civil partner, the estate will usually be divided equally between the children. If there are no descendants, the estate will be divided among the surviving children.

No spouse, civil partner, or children: Your estate will pass to surviving relatives in the following order:

• Full-blood siblings, or their descendants if they have predeceased you.
• Half-blood siblings, or their descendants if they have predeceased you.
• Full-blood uncles and aunts, or their descendants.
• Half-blood uncles and aunts, or their descendants.

No surviving relatives: Your estate will pass to the Crown as bona vacantia.

WHAT ABOUT UNMARRIED PARTNERS?

A common misconception is that cohabiting partners automatically inherit from each other. In fact, cohabitees have no automatic right to inherit under the intestacy rules, regardless of how long they have lived together.

In some circumstances, a surviving cohabitant may be able to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975, but this can be costly, emotive, and uncertain.

DO THE INTESTACY RULES APPLY TO ALL ASSETS?

The intestacy rules only apply to assets that would otherwise pass under a will. Certain assets pass outside the estate and are therefore unaffected by the intestacy rules. Examples include:

• Assets owned jointly as joint tenants, where the right of survivorship applies. This commonly includes jointly owned property and joint bank accounts. On the death of one owner, their interest passes automatically to the surviving owner and does not form part of the estate for distribution under the intestacy rules.
  • Assets held in trust that pass according to the terms of the trust.
  • Life insurance policies written for the benefit of a named beneficiary.
  • Pension death benefits that are distributed at the discretion of the pension scheme trustees.

For example, where a married couple own their home as joint tenants and one spouse dies without a will, the deceased’s interest in the property will usually pass automatically to the surviving spouse, rather than being distributed under the intestacy rules.

WHO ADMINISTERS AN INTESTATE ESTATE?

Where there is no valid will, there are no executors. Instead, one or more eligible individuals can apply for a grant of letters of administration, which gives them authority to deal with the estate. Executors and administrators are collectively known as personal representatives.

Before distributing the estate, the personal representatives must:

• Identify and value the deceased’s assets.
• Settle any outstanding debts and liabilities.
• Pay any tax due.
• Distribute the remaining estate in accordance with the intestacy rules.

WILL INHERITANCE TAX (IHT) APPLY?

IHT may be payable where the value of an estate exceeds the available tax-free allowances (nil rate bands). The standard nil rate band is currently £325,000. An additional nil rate band, known as the residence nil rate band, of £175,000 might be available where a qualifying residence is left to direct descendants, subject to conditions and taper relief for estates over £2 million.  IHT is then due at 40 per cent on the value of an estate above the available nil rate bands.

In most cases, assets passing to a surviving spouse or civil partner are exempt from IHT. Additional allowances and reliefs may also be available.

THE COMPLICATIONS OF DYING INTESTATE

Although the intestacy rules provide a framework for distributing an estate, they cannot take account of personal circumstances or individual wishes.

Common issues include:

• Loss of control: Your estate may be distributed in a way that does not reflect your intentions.
• Unmarried partners receiving nothing: Long-term cohabiting partners have no automatic entitlement to inherit.
• Family disputes: Disagreements can arise, particularly in blended families, where relationships are strained, or where expectations differ from the legal position.
• Legal complexity and delay: Obtaining authority to administer an intestate estate can be more time-consuming and expensive than administering an estate where a valid will exists.

Many people assume that their share of a jointly owned property will pass under their will or the intestacy rules. However, where the property is owned as joint tenants, it will usually pass automatically to the surviving owner regardless of any contrary intentions.

WHY MAKING A WILL MATTERS

The intestacy rules provide a statutory framework for distributing an estate, but they cannot reflect individual wishes or family circumstances.

A properly drafted will allows you to decide who inherits your assets, appoint trusted people to administer your estate, and provide for those who may otherwise be left without protection. Reviewing a will regularly can help ensure that it continues to reflect your intentions.

If you would like advice on making or updating a will, please contact Private Client partner Charlotte Pollard.