Dying without a will (intestacy)

When someone dies without leaving a valid Will in England & Wales, their estate (property, money, belongings, etc) must be distributed in accordance to the rules of intestacy.

When someone dies intestate, their estate is usually administered by the next of kin, who must stick to intestacy rules to determine who benefits from the estate.

It will depend on how the house is owned:

If the deceased owned the house in their sole name then the rules of intestacy will apply

If the deceased owned the house with someone else as Tenants in Common, the rules of intestacy also apply.

If the deceased owned the house with someone else as Joint Tenants, the house will pass automatically to the surviving joint tenant.

If there’s a spouse/civil partner and children

The spouse/civil partner will receive everything up to the value of £250,000, and the deceased’s personal items

Anything over £250,000 is divided in two. Half goes to the children (at 18), and the other half is added to the spouse/civil partner’s inheritance.

If there’s a spouse/civil partner but no children

The spouse/civil partner receives everything

If there are children but no spouse/civil partner

The children receive everything equally once they turn 18. Adopted children can inherit but stepchildren can’t.

No partners are considered unless they were married to or in a civil partnership with the deceased

If there’s no spouse/civil partner and no children

The estate goes to the deceased’s parents. If their parents are dead, the order is the following:

  1. Brothers and sisters (or nieces and nephews if a sibling died before the deceased);
  2. Grandparents
  3. Uncles and aunts (or cousins if an uncle or aunt has died before the deceased).

If there are no surviving relatives

The estate goes to the Crown.

Financial dependents who don’t inherit under the intestacy rules will have to claim under the Inheritance Act 1975.

Intestacy rules don’t provide inheritance for the following:

  • Unmarried partners
  • Couples not in a civil partnership
  • Relations by marriage (e.g. stepchildren)
  • Close friends
  • Carers
  • Charities

If you think that these rules will affect how your estate is distributed and that loved ones would be overlooked, you should make sure you a have a Will in place.

You will need to find out first whether a will has been made and if so, where it is.

You can ask the deceased’s solicitors, banks, search their home or carry out an online search via Certainty (The National Will Register).

If you can’t find a will, the deceased probably didn’t make one and their estate will be administered by the next of kin in accordance to the rules of intestacy.

If there’s no will, then the next of kin can apply to become the administrator of the estate. They will apply for “Letters of Administration”.

It is normally the closest living relative (spouse/civil partner followed by any children 18 or over, including legally adopted children but not step-children). You can find more information about the next of kin here Intestacy – who inherits if someone dies without a will? – GOV.UK (www.gov.uk).

Executors

An Executor is the person legally responsible for dealing with your estate and carrying out the terms of the Will. This includes applying for probate, pay inheritance tax and distributing the estate, amongst other things.

Yes, you can have up to 4 executors but they must make all the decisions jointly.

Yes, executors must make all the decisions jointly.

Any issues need to be resolved in order for probate to move forward. If there’s an issue between executors you will need to seek legal advice.

As Executor, you will be responsible for carrying out the instructions in the Will and administering the estate.

Executors need to collect all assets and money due to the estate, pay outstanding liabilities, apply for probate and distribute the estate according to the Will.

Executors can claim reasonable expenses from the estate.

Before you agree to be an Executor, think whether you will have the time to do it. If you haven’t started to deal with the estate, you can renounce to the role. If you have already started, you cannot step down unless you have a good reason.

The executor of a will has a duty to administer the deceased person’s estate in line with the law and the terms of the Will.

The Court can remove an executor who is not following the law, the will or who is not fulfilling his duties. The court can appoint a new personal representative to oversee the estate.

Yes, as long as the beneficiaries agree.

There are a few reasons why an executor may want to change a will, for example, to reduce the amount of IHT/CGT, or to provide for someone who was left out.

To change a Will you need to make a “variation”.

No, an Executor has to distribute the estate in accordance to the terms of the Will.

However, if the Wills doesn’t give clear instructions, the executor will then have the power to make a decision

If you appoint a professional executor, they will normally charge for this appointment. They will get paid out of the estate.

If you appoint a family member or friend or another non-professional executor, then they are generally not paid for the work.

Because of the responsibilities of the role, it is important that you choose people you trust. Depending on the size and complexity of your estate, you may consider appointing professional executors, but bear in mind they will charge for their service.

You can appoint friends and family members. Although many executors delegate their role to a solicitor or another professional, they will oversee everything and they’ll know how you want your wishes to be carried out if there’s a dispute.

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Yes, it is quite common for an executor to also be a beneficiary but it’s important that any beneficiary under the Will doesn’t witness the will, otherwise they won’t be entitled to receive their legacy.

If you don’t want to be an executor, it is important that you seek legal advice immediately and you should not start dealing with the estate in any way. You can renounce completely by filling a form and sending it to the probate registry, or appoint an attorney to act on your behalf.

If you’ve already started dealing with the estate, you will need a good reason to step down.

Legacies

A gift in a will is called a ‘legacy’.

Once the executors or the administrators have received the grant of probate they can close the bank accounts and sell assets (such as shares and property). If money is just in a bank account it is generally quicker (weeks) than if there is a property to sell (which could be months). If the estate is likely to take some time to settle executors may suggest an interim distribution – so a part payment to the beneficiaries whilst they complete the administration of the estate.

‘Pecuniary legacies’ are a fixed sum of money – ie a ‘cash gift’.

‘Specific legacies’ are specific items just as personal possessions.

‘Residuary gifts’ is money after cash gifts and personal possessions have been distributed and after tax & liabilities have been paid.

There are two ways of doing this – either leaving a ‘pecuniary legacy’ – a fixed sum, or a ‘residuary gift’ – a percentage.

The debts of an estate – funeral, tax and money owing to companies/ businesses – gets paid first, and then the beneficiaries.

The money is collected in by the executors of an estate and then distributed to the beneficiaries.

A ‘legacy will’ is a will that leaves money or specific items to an individual or charity.

You can leave a legacy in your will. By including a legacy in your will it makes the gift legally binding.

You need to decide who the beneficiary is going to be and how much you would like to leave them. You need to ensure that the amount you are leaving them won’t be greater than the total value of your estate when you as the beneficiaries receiving the ‘residue’ then won’t receive anything.

An example of a ‘pecuniary legacy’ or a ‘cash gift’ is £5,000 to each of my grandchildren.

Guardians

A guardian is the person will be looking after your minor children if both their parents die before they are 18. They will take over the “parental responsibility”.

They are responsible for the day-to-day care of the children and make decisions about their upbringing, education and health until they are adults.

You can leave a “Letter of Wishes” alongside your Will detailing how you would like your children to be raised. This letter is not legally binding but there shouldn’t be a reason why your guardians wouldn’t follow your wishes.

You can appoint a guardian in your Will.

Family and friends you trust is always a good option, however, you’ll need to think that the children will be moving in with them, so you may need to take into account things like: where they live (i.e. is it close enough to the children’s current residence? If too far, this may have an impact on schools, friendships, etc); how old they are (i.e. grandparents may not be appropriate if they’re too old); financial situation, lifestyle and their own family circumstances.

Usually appointing two guardians (a couple) is appropriate, but you can appoint up to four. However, the more people you choose the higher the likelihood of conflicts arising.

It is a good idea to appoint a backup guardian, so if the primary appointed have died or don’t wish to act, your substitute guardians can take their place.

To ensure that someone you trust will be looking after your children if you die before they are 18.

If you don’t, the courts will decide who looks after them and they may be taken into temporary care while a decision is made.

You can do so by amending your Will (either writing a new Will or writing a codicil).

There is no legal problem with your guardians and executors/trustees to be same people, however, your guardians will be looking after your minor children and spending the money from your estate in their upbringing (i.e. food, clothes, school fees, etc) in accordance to your wishes. Whereas your executors/trustees, have a duty to look after your estate and maximize the returns.

Sometimes the trustees have to make financial decisions for the benefit of the children that also benefits the guardian, which could potentially cause a conflict between the two roles.

The guardian cannot benefit personally from the estate and it is advisable to either separate the two roles or also appointing an independent trustee (e.g. a professional) to make sure that the guardians don’t have too much control or access over the assets.

Residuary Estate

You will need to include beneficiaries in your will as well executors and perhaps trustees and guardians. Your beneficiaries can either be left a fixed sum of money (a ‘legacy’) or all or a share of your estate (the ‘residue’).

The residuary beneficiary or residuary beneficiaries receive the residue of an estate.

Residuary estate is the balance of an estate after tax, liabilities and any specific personal items or cash gifts (legacies) have been paid.

The residue of an estate is valued for probate. The debts, tax and liabilities are paid from the residue before it is distributed as per the will. If there is no will, the rules of intestacy are followed.

‘Estate’ is the collective term for anything that a person owned when they die.

The residue of an estate is distributed as per the will. If there is no will, it is distributed following the rules of intestacy.

The residuary beneficiaries in your will will receive the residue. If you don’t have a will the residue will be distributed following the rules of intestacy.

If a residuary beneficiary dies during the administration of an estate, their own estate will still receive the money due (and pass via the terms of their own will). If they die before the deceased, any gift usually lapses and will be added proportionally to the other residually beneficiaries to the original will.

A residuary beneficiary receives the estate or a share of the estate after all liabilities, debts and taxes are paid. A beneficiary is a general term of someone who receives money or an item from the estate.

The residuary estate is left up of everything else that hasn’t already been left to a beneficiary (for example personal items, fixed cash gift/ legacy.

The purpose of a residuary clause is to leave money to beneficiaries that has not already been left to beneficiaries either through a fixed cash gift (a legacy) or in a personal item to beneficiaries.

You do need a residuary clause in a will as you cannot effectively list out every asset to leave beneficiaries.

A residuary bequest means money that is left after fixed cash gifts have been made and debts, liabilities and tax have been made. A residuary beneficiary receives a residuary bequest.

This is a beneficiary who is set to receive a share or the whole of the residuary estate.

Trustees

A trustee is the person responsible for managing assets that have been set aside in a trust for the benefit of someone else. The Trustee must look after the assets in trust and only use them for the benefit of the beneficiary.

The specific powers of a trustee will be determined by the trust deed (or will) and by law, however, a trustee normally has the following powers: investment, insurance, remuneration for professional trustees, advancement of capital, delegation to agents, dealing with land, pay, transfer or lend funds to beneficiaries and maintenance to minor beneficiaries.

The trustees must exercise their powers only and in the best interest of all the beneficiaries

Sometimes a Trust is created by Will, for example, if a beneficiary is under 18. The Trustees will then be responsible for looking after the assets in trust until the beneficiary reaches 18 (or the specific age set out in the Will).

Other times, the Will sets up a Trust to hold part of the estate and the Trustees will be appointed to manage the ongoing administration.

Ideally, you would want to appoint someone who you trust and understands your wishes, and has no interest in the trust fund to avoid any potential conflict of interests between their position as trustee and beneficiary.

You don’t have to appoint a professional trustee, but in some cases this may be appropriate, depending on the size and complexity of the estate assets, or where family relationships require an independent party.

Yes, there is no legal reason preventing a trustee being a beneficiary, however, the role of Trustee and the position as beneficiary could create a conflict of interest, particularly in discretionary trusts where the trustees have the power to decide by how much each beneficiary can benefit.

The role of the Executor is to administer the deceased’s estate. They will deal with the funeral, registration of death, calculation of the value of the estate, reporting to HMRC, payment of IHT, probate application and distribution to the beneficiaries.

The role of the Trustees is to manage any ongoing Trusts once the administration of the estate has been completed. They will look after the assets in trust for the benefit of the beneficiaries.

It is common for the same people to be Executors and Trustees, but it is important that they keep the two roles separate and are clear on their specific duties.

Trustees must follow the terms of the trust and are accountable to the beneficiaries for their actions. They may be held personally liable if they use trust assets for their own benefit.

Pets

Similarly to children you can appoint a ‘guardian’ – a ‘pet guardian’ – in your will for your pets. This is a person who you leave your beloved pet – your ‘fur baby’ to. This person will become the new owner – the new parent of your pet. It can be quite a responsibility taking on a pet so you may want to ask them first before giving them your pet when you die!

No you can’t but you can leave money to the person you are leaving your pet to. This can range from leaving a ‘legacy’ (a fixed amount of money) right through to leaving them a share of the ‘residue’ (a percentage of your estate).

It can be quite a responsibility taking on a pet so you may want to ask the person first before giving them your pet when you die!

Other considerations you should think about are how long will my pet live? Typically a horse will live much longer than a goldfish. Will the person be able to take care of my pet? For example walk the dog everyday.

There is of course the financial side of things too. If you’re not going to leave money with your pet, will pet guardian be able to afford your pet?

o It can be that the person who you are giving your dog or cat to changes their mind. It may be their personal circumstances change. In this situation, they may not be able to or don’t want to take your pet. It will then be up to the executors of your will to rehome your pet, which may be with a family member or friend or an animal shelter.

No, you don’t need to include a clause in your will leaving your pet to someone when you die. If you wanted a less formal route for taking care of your pet you can always include them in your letter of wishes. You need to bear in mind the letter of wishes whilst more flexible is not legally binding.

If you don’t make specific provisions for your pets when you die it will be up to your executors of your will to find a home for them. This is because pets are classed as an asset of your estate.

If you die without a will it will be your administrators who will rehome your pets.

If you die without making a will you leave a lot to chance. So make sure you’ve not only got a will in place but you’ve considered your pets when you die.

Letter of Wishes

A letter of wishes gives you an opportunity to give guidance to your executors as to how you would like certain aspects dealt with. It is just guidance, it is not legally binding.