Wills and Administration of Trusts – The Intestacy Rules,
The effect of the intestacy rules.
The intestacy rules contained in the administration of estates act 1925 apply to
decide who is entitled to an individual’s property when he dies without disposing of
it by will.
o This may occur because the deceased died intestate or because his will failed
to dispose of all of his estate.
The intestacy rules apply only to property which is capable of being left by will.
Statutory trust for payments of debts:
o The intestacy rules impose a trust over all the property in respect of which a
person dies intestate.
o This trust is similar to the usual express trust found in a will and includes a
power of sale: it provides that the personal representatives must pay the
funeral, testamentary and administration expenses and any debts of the
deceased.
o The balance remaining after setting aside anything left to pay legacies etc is
the residuary estate to be shared among the family under the rules of
distribution set out on section 46 AEA 1925.
o The personal representatives have power under section 41 to appropriate
assets in or towards satisfaction of a beneficiary’s share.
Spouse or civil partner and issue.
o Under the intestacy rules a spouse is the person to whom the deceased was
married at his death, whether or not they were living together. A same sex
spouse has exactly the same rights as an opposite sex spouse.
o A former spouse is excluded once the decree absolute is obtained.
o A cohabitee has no rights under the intestacy rules.
o Civil partners are treated in the same way as spouses.
o The term issue includes all direct descendants of the deceased.
Adopted children are included as are those whose parents were not
married at the time of their birth.
Descendants of the deceased’s spouse or civil partner are not issue of
the deceased unless adopted.
o Entitlements - where the intestate is survived by both spouse or civil partner
and issue the ‘residuary estate’ is distributed as follows:
The spouse or partner receives the personal chattels absolutely.
Personal chattels are defined in section 55(1)(x) AEA 1925 as
tangible moveable property other than property which
consists of money or securities for money or was used at the
death of the intestate solely or for business purposes or was
held at the death of intestate solely as an investment.
The spouse or civil partner receives a statutory legacy or £250,000
free of tax and costs plus interest from death until payment.
The rest of the residuary estate is divided in half. One half is held on
trust for the spouse or civil partner absolutely. The other half is held
for the issue on the statutory trusts.
, o The intestate’s spouse must survive the intestate for 28 days in order to
inherit.
Applying the statutory trusts:
o The primary beneficiaries are the children of the intestate who are living at
the intestate’s death.
o The interests of the children are contingent upon attaining the age of 18 or
marrying or forming a civil partnership under that age.
o If any child of the intestate predeceased the intestate, any children of the
deceased child who are living at the intestate’s death take their deceased
parents share equally between them contingently upon attaining the age of
18.
o If children or issue survive the intestate but die without attaining a vested
interest their interest normally fails and the estate is distributed as if they
had never existed.
Right of spouse or civil partnership to require appropriation of the matrimonial home.
o If the matrimonial home forms part of the estate passing on intestacy, the
surviving spouse or civil partner can require the personal representatives to
appropriate the matrimonial home in full or partial satisfaction of any
absolute interest in the estate.
o If the property is worth more than the entitlement of the spouse or civil
partner, the spouse or civil partner may still require appropriation provided
he or she pays the difference ‘equality money’ to the estate.
o The election must be made in writing to the personal representatives within
12 months of the grant of representation.
Spouse or civil partner and no issue.
o where the intestate leaves a surviving spouse or civil partner but not issue,
the whole estate, however large, passes to the spouse or civil partner
absolutely.
o The spouse or civil partner must survive the intestate for 28 days in order to
take.
Distribution where there is no surviving spouse or civil partner.
o Where there is no surviving spouse or civil partner the residuary estate is
divided between the relatives in the highest category:
Issue on the statutory trusts
Parents, equally if both,
Brothers and sisters of the whole blood on the statutory trusts
Brothers and sisters of the half blood on the statutory trusts
Grandparents, equally if more than one,
Uncles and aunts of the whole blood on the statutory trusts
Uncles and aunts of the half blood on the statutory trusts
The crown, duchy of Lancaster or duke of Cornwall.
o The statutory trusts:
Statutory trusts mean that members of the specified class share the
estate equally and that issue of a deceased relative may take that
relatives share.
The effect of the intestacy rules.
The intestacy rules contained in the administration of estates act 1925 apply to
decide who is entitled to an individual’s property when he dies without disposing of
it by will.
o This may occur because the deceased died intestate or because his will failed
to dispose of all of his estate.
The intestacy rules apply only to property which is capable of being left by will.
Statutory trust for payments of debts:
o The intestacy rules impose a trust over all the property in respect of which a
person dies intestate.
o This trust is similar to the usual express trust found in a will and includes a
power of sale: it provides that the personal representatives must pay the
funeral, testamentary and administration expenses and any debts of the
deceased.
o The balance remaining after setting aside anything left to pay legacies etc is
the residuary estate to be shared among the family under the rules of
distribution set out on section 46 AEA 1925.
o The personal representatives have power under section 41 to appropriate
assets in or towards satisfaction of a beneficiary’s share.
Spouse or civil partner and issue.
o Under the intestacy rules a spouse is the person to whom the deceased was
married at his death, whether or not they were living together. A same sex
spouse has exactly the same rights as an opposite sex spouse.
o A former spouse is excluded once the decree absolute is obtained.
o A cohabitee has no rights under the intestacy rules.
o Civil partners are treated in the same way as spouses.
o The term issue includes all direct descendants of the deceased.
Adopted children are included as are those whose parents were not
married at the time of their birth.
Descendants of the deceased’s spouse or civil partner are not issue of
the deceased unless adopted.
o Entitlements - where the intestate is survived by both spouse or civil partner
and issue the ‘residuary estate’ is distributed as follows:
The spouse or partner receives the personal chattels absolutely.
Personal chattels are defined in section 55(1)(x) AEA 1925 as
tangible moveable property other than property which
consists of money or securities for money or was used at the
death of the intestate solely or for business purposes or was
held at the death of intestate solely as an investment.
The spouse or civil partner receives a statutory legacy or £250,000
free of tax and costs plus interest from death until payment.
The rest of the residuary estate is divided in half. One half is held on
trust for the spouse or civil partner absolutely. The other half is held
for the issue on the statutory trusts.
, o The intestate’s spouse must survive the intestate for 28 days in order to
inherit.
Applying the statutory trusts:
o The primary beneficiaries are the children of the intestate who are living at
the intestate’s death.
o The interests of the children are contingent upon attaining the age of 18 or
marrying or forming a civil partnership under that age.
o If any child of the intestate predeceased the intestate, any children of the
deceased child who are living at the intestate’s death take their deceased
parents share equally between them contingently upon attaining the age of
18.
o If children or issue survive the intestate but die without attaining a vested
interest their interest normally fails and the estate is distributed as if they
had never existed.
Right of spouse or civil partnership to require appropriation of the matrimonial home.
o If the matrimonial home forms part of the estate passing on intestacy, the
surviving spouse or civil partner can require the personal representatives to
appropriate the matrimonial home in full or partial satisfaction of any
absolute interest in the estate.
o If the property is worth more than the entitlement of the spouse or civil
partner, the spouse or civil partner may still require appropriation provided
he or she pays the difference ‘equality money’ to the estate.
o The election must be made in writing to the personal representatives within
12 months of the grant of representation.
Spouse or civil partner and no issue.
o where the intestate leaves a surviving spouse or civil partner but not issue,
the whole estate, however large, passes to the spouse or civil partner
absolutely.
o The spouse or civil partner must survive the intestate for 28 days in order to
take.
Distribution where there is no surviving spouse or civil partner.
o Where there is no surviving spouse or civil partner the residuary estate is
divided between the relatives in the highest category:
Issue on the statutory trusts
Parents, equally if both,
Brothers and sisters of the whole blood on the statutory trusts
Brothers and sisters of the half blood on the statutory trusts
Grandparents, equally if more than one,
Uncles and aunts of the whole blood on the statutory trusts
Uncles and aunts of the half blood on the statutory trusts
The crown, duchy of Lancaster or duke of Cornwall.
o The statutory trusts:
Statutory trusts mean that members of the specified class share the
estate equally and that issue of a deceased relative may take that
relatives share.
