If someone dies without a will, they are said to have died ‘intestate’. There is a set of rules that governs who gets what in this situation and, as of 1 October 2014, these rules are changing.
What stays the same:
‘Common law’ partners
If you are in a long-term relationship but you are not married or in a civil partnership and you die without a will, your partner is not entitled to any share of your estate. There is no such thing as a ‘common law’ partner. The only way to make sure your partner is left something when you die is to marry them or leave a will.
Estates worth under £250,000
The changes to the intestacy rules don’t affect people with estates worth less than £250,000 but with the housing boom, the estates of an increasing number of homeowners will be worth more.
The pecking order
Who gets what when there is no will and no spouse:
1. Children or their descendants;
3. Brothers or sisters or their descendants;
4. Half siblings or their descendants;
6. Uncles and/or aunts or their descendants;
7. Half uncles and/or aunts or their descendants;
8. Whole estate passes to the Crown.
Each ‘class’ described above only gets an inheritance when the previous ones don’t exist. So for the Crown to inherit an estate, the deceased would have to have no family. This is unusual – hence the rise of ‘Heir Hunters’, trying to find long lost relatives to claim their inheritances (and get a tidy cut themselves).
Married couples / civil partners without children
Under the old rules, if a spouse died intestate and there were no children then the first £450,000 of the estate plus half of the rest went to the surviving spouse. The other half was split between the deceased’s blood relatives. Under the new rules, the surviving spouse will receive everything.
Married couples / civil partners with children
Under the old rules, the surviving spouse took everything up to £250,000. The children would receive half of the balance above £250,000 immediately (or it would be held in trust for them until they were 18). The other half would also go to the children but the surviving spouse would have a ‘life interest’ in the money while they were alive. The life interest meant they could take income from the money but not the capital.
Under the new rules, the surviving spouse will take all of the first £250,000 and then be fully entitled to half of the remainder. All the children will get is half of anything above £250,000 and they will have to be 18 before they get it.
Under the old rules, if someone died leaving a child under the age of 18 who was subsequently adopted by someone else, the adopted child could lose their inheritance from their natural parent. Under the new rules, the adopted child does not lose their right to receive an inheritance from their natural parent.
Under the old rules, the old-fashioned word ‘chattels’ was used to describe personal property. Its meaning included carriages, linen and scientific instruments (so you get an idea of when the rules were first drafted).
Under the new rules, ‘chattels’ are now defined as anything that is not monetary, business assets or ‘held as an investment’. However, what one person sees as an ‘investment’, another may see as a chattel’, e.g. a valuable painting or an antique car, so this is still open to interpretation.
So, out with the old and in with the new! But why let the intestacy rules govern your estate? Make a will and ensure that what you want goes to who you want. A clear set of instructions in a will can help avoid arguments among family and friends, and provide for your loved ones, at a time when emotions can be running high.