Intestacy

Question 1

What is the entitlement of estate for intestacy?

Answer 1

S.46 AEA 1925
* if deceased has been survived by spouse/civil partner (by at least 28 days) and/or issues, they are the only class of relatives that needs to be considered.
* if deceased leaves no spouse or issue, its necessary to consider wider class of relatives.

Question 2

Entitlement of spouse and issue?

Answer 2

• if intestate leaves a spouse but no issues, spouse inherits entire succession estate absolutely.
• if intestate leaves issue but no spouse, issue inherits entire succession estate on the statutory trusts.
• if intestate leaves both spouse and issue, position is more complex and depends on nature and value of assets forming succession estate.

outliving deceased is a requirement specific to spouses

Question 3

What happens if intestate leaves both spouse and issue.

Answer 3

• Spouse
  
  • personal chattels absolutely
  • statutory legacy of £322,000 free of tax and costs plus interest from date of death to date which payment is made
  • one half of residue (if any) absolutely
• Issue
  
  • other half of the residue (if any) on the statutory trusts

Question 4

What happens to the issues, if they do or do not survive the deceased?

Answer 4

• if they do not survive the deceased their own issue may still inherit their entitlement under the ‘substitution limb’ of the statutory trusts.
• if they do survive deceased, there is no requirement that they do so by 28 days, but they will need to survive the ‘contingency limb’ before obtaining vested interest.

Question 5

What is the contigency limb of the statutory trusts?

Answer 5

• Each entitled beneficiary must survive the intestate and reach age of 18 in order to inherit - until satisfied, the beneficiary has a contingent interest.
• If beneficiary is already 18 or older when intestate dies they will inherit absoluetly and immediately, as contingency is already satisfied - beneficiary has a vested interest.

Question 6

What is the substitution limb of the statutory trusts?

Answer 6

• if entitled beneficiary dies before the intestate that beneficiary’s own issue can inherit in their place, provied the beneficiary’s issue themselves staisfy the contingency limb.
• would apply in scenario where beneficiary survives intestate but dies before attaining vested interest.

Question 7

How is the estate distributed where intestate dies without leaving spouse/civil partner or issue?

Answer 7

S.46 AEA sets out order of entitlement:
1. Parents
2. Siblings of whole blood (share both parents) on statutory trust
3. Siblings of half blood (share one parent) on the statutory trust
4. Grandparents
5. Uncles and aunts (whole blood siblings of parent) on the statutory trust
6. Uncles and aunts (half blood siblings of parent) on the statutory trust
7. The crown

where more than one person in relevant category, succession estate equal

Question 8

What is a personal chattel?

Answer 8

Tangible moveable property but excludes:
* money or securities for money
* property used by the intestate at their death or mainly for business purposes
* preoperty heald at death of the intestate solely as an investment.

Question 9

The appropriation of the marital home?

Answer 9

• spouse has** no automatic right** to receive deceased’s share of marital home
• however, they can make an election which enables them to appropriate the home in full or partial satisfaction of their statutory entitlement - essentially have right to ‘buy’ the deceased share of property from personal representatives using money they would have recieved from estate

Question 10

How does one make an election?

Answer 10

• surviving spouse/civil partner must make an election in writing to personal representative within 12 months of date of grant - during period, personal representative cannot normally sell house without spouse’s consent
• where entitlement under intestacy rules is lower than value they are appropriating (home is the only/main asset) the spouse/civil partner must pay difference from personal funds - home valued from date of appropriation not death
• some restrictions on right to appropriate - consent of court is required where home is only part of a building owned by deceased.