What happens if you die without a will?

Dying without a valid will, otherwise known as dying intestate, means your estate is distributed according to strict legal rules. These rules are known as the ‘rules of intestacy’ and crucially, may not reflect the deceased’s wishes.

If you have business assets, the consequences of dying intestate can be particularly problematic. For example, shares in a company or an interest in a partnership may pass to family members under the intestacy rules, which may not align with how the business is run or what the other owners expect. This can lead to delay and uncertainty at a critical time, including while the estate is administered and decisions about the business need to be made.

What are the rules of intestacy?

The rules of intestacy are established by the Administration of Estates Act 1925. They determine how your estate, which includes all your property, investments, money and possessions, is distributed if you leave no will. The rules differ depending on the relatives you leave behind, whether that’s a spouse, children, both or neither.

The rules of intestacy apply only to assets situated in England and Wales. This means that for assets located in Scotland, Northern Ireland and the rest of the world, rules specific to those jurisdictions decide how a person’s estate passes.

Not only will the rules of intestacy apply where you haven’t written a will, but they will also apply where you have written a will that is later found to be invalid. This can mean that, despite attempting to control how your estate passes, the distribution you intended may not be followed if there’s a flaw that renders your will invalid.

There are also situations where assets won’t pass under the rules of intestacy. For example, where property is held as joint tenants (rather than as tenants in common) it usually passes automatically to the surviving owner(s) on death, regardless of a will or the rules of intestacy.

Who inherits under intestacy?

This depends on the relatives you have at the time of your death. In all the situations below, any inheritance tax payable and liabilities and expenses are deducted before the estate is distributed.

If you leave a spouse (or civil partner) and children

Your spouse or civil partner will receive the first £322,000 (the statutory legacy for deaths on or after 26 July 2023) of your estate under the rules of intestacy. Your spouse is also entitled to all your personal belongings (known as “personal chattels”). This includes furniture, jewellery, clothing and vehicles.

If there’s value remaining in your estate after the initial £322,000, the remainder (the “residue”) is split in half: one half goes to your spouse (in addition to the initial £322,000), and the other half goes to your children (in equal shares if there’s more than one child). If any of your children predecease you, their children (your grandchildren) will inherit in their place.

If any of your children are under the age of 18, their inheritance will typically be held on trust and looked after by trustees until they turn 18.

The following is a case study of what this might look like in practice:

Case study

Deceased: John
Marital Status: Married to Olivia
Children: Two - Emily (aged 12) and Thomas (aged 15)
Assets: Aside from a house which they own as joint tenants (meaning it automatically passes to Olivia), £600,000 of assets are held solely by John

If you leave children but no spouse 

Your estate is divided between your children in equal shares. Again, where any of your children predecease you, their children (your grandchildren) will inherit in their place.

Your ‘children’ include those who have been legally adopted but do not include stepchildren (unless legally adopted). 

If you leave only a spouse and no children

This is straightforward. The spouse or civil partner will inherit everything. 

If you had children who predeceased you but left children of their own, those grandchildren may inherit in their parent’s place.

If you leave no children and no spouse

If you die intestate, and you have no spouse, and no children, grandchildren or remoter issue, your estate would be distributed to your surviving relatives in the following order:

1. Parents
2. “Whole-blood” siblings (share both parents with the deceased)
3. “Half-blood” siblings (share one parent with the deceased)
4. Grandparents
5. “Whole-blood” uncles and aunts (brother/sister of parent of deceased)
6. “Half-blood” uncles and aunts (half-brother/half-sister of parent of deceased)

Your estate will be divided equally at each level, between however many relatives fall into that category, so for example, if you died without parents but you had three living “whole blood” siblings, your estate would be divided into thirds with one third going to each of those siblings.

If you have no relatives who satisfy the above, your estate will pass to the Crown (otherwise known as “bona vacantia”). The Treasury Solicitor is then responsible for dealing with your estate. The Crown can make grants from your estate to individuals who apply, but doesn’t have to. If someone isn’t a surviving relative but believes they have a good reason to apply for a grant, it’s best to seek legal advice.

A very common misconception is that cohabiting partners (unmarried couples living together) have an automatic right to inherit under intestacy rules. This is incorrect. Cohabitees have no automatic right to inherit, regardless of the length of the relationship. The surest way to ensure that any cohabiting partner inherits part of your estate is to write a will and include them in it.

Can you contest the rules of intestacy?

If someone believes that the distribution through intestacy fails to make reasonable financial provision for them, it’s possible to contest the rules of intestacy by making a claim under the Inheritance (Provision for Family and Dependants) Act 1975. Claims must be made within six months of the date of the letters of administration (the grant applied for in intestate estates) being granted.

Eligible claimants include unmarried partners who have lived together for at least two years, children, stepchildren and anyone financially maintained by the deceased. In order to be successful in a claim, it must be proven that the intestacy rules don’t sufficiently provide for the claimant’s financial needs, which is particularly relevant if they were financially dependent on the deceased.

This process can be expensive and requires quick action in a time when family members may wish to process the death of a relative.

Summary

Ultimately, a valid will is the best and only way to ensure that, on your death, your estate passes in accordance with your wishes and that unintended outcomes are avoided.

Having your will professionally drafted helps ensure your assets are left to the correct people by clearly identifying beneficiaries and setting out your intentions in a way that reduces the scope for uncertainty or dispute. It also protects your loved ones and assets by reducing the risk of an arduous and often expensive process of contesting intestacy.

If you have any questions regarding intestacy or wish to draft a will, please feel free to get in touch with a member of the Mills & Reeve private client team.

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