If you die without having a valid will in place, then your estate is subject to the rules of intestacy. This dictates which of your living relatives will be granted a share and how much they will receive. In October 2014 the Intestacy rules in England & Wales changed.
Last year the intestacy rules changed. Since 1 October 2014, if a parent dies and leaves a surviving spouse and children, the estate is split as follows:
- Spouse receives:
- All personal chattels (ie movable property)
- First £250,000 of the estate
- Half of the remainder absolutely (this was previously held in trust)
- Children receive:
- The other half of the remainder (this will be held in trust until they are 18)
- Parents, siblings and their issue receive nothing.If there are no children, everything goes to the surviving spouse.
If there are no children, everything goes to the surviving spouse.
Joint property is not subject to the rules of intestacy. So if the family home is owned jointly by spouses, the surviving spouse automatically inherits by survivorship, not by intestacy. If a property is owned 50:50 (or any other ratio) as tenants in common, rather than as joint owners, then the deceased’s share of the property falls within the intestacy rules.
If there is no surviving spouse, the estate is divided equally between the deceased’s issue (children, grandchildren and further descendants). Couples who are not married or in a civil partnership should bear this in mind.
If there is no surviving spouse or issue then the estate is divided up between the wider family in the following order, to the exclusion of anyone in a lower category:
1. Parents
2. Brothers and sisters (or their issue)
3. Half brothers and sisters (or their issue)
4. Grandparents
5. Uncles and aunts (or their issue)
6. Parents’ half brothers and sisters (or their issue)
If there are no such relatives, the estate will go to the Crown.
So, for example, if you pass away after your parents and with no surviving spouse or children, your estate would be divided between your siblings.
The new rules are not significantly different from the old ones, but the changes are a timely reminder of the importance of putting a valid will in place. This is the only reliable way to ensure your estate ends up with your desired beneficiaries, especially if you have a partner and are not married or in a civil partnership with them.