What Happens if you Die without a Will?
“What happens if you die without a will” is a commonly asked question that many new or expectant parents ask and it is a very important question too, as dying without a will can be very difficult for the relatives left behind. At MyBump2Baby we are very passionate about the protection of families and although the thought of parents, relatives and family members dying is not a nice thought, unfortunately, it happens and it is so important that as a family-focused business we aim to protect as many families as possible should the worst happen.
Today we have an article from Thomas Manson family law solicitors in Birmingham, they kindly share this informative article detailing what happens if you die without a will and why you need to consider one for your surviving relatives.
Intestacy
If someone dies without leaving a valid Will in England and Wales, their estate will pass in accordance with the intestacy rules. Part IV Administration of Estates Act 1925 sets out how the estate will be distributed.
How does probate work when there is no Will and how do I deal with the Estate?
Probate is a generic word that is used to describe the different types of Grant of Representation (more commonly referred to as Grant of Probate) that can be taken out.
Probate works in the same way irrespective of whether or notthere is a Will in place. It is best to look at the Grant of Probate as being yourkey to unlocking a persons assets.
When someone dies without a Will, an application is made bythe proposed personal representatives, for Letters of Administration (Grant of Probate).
Once Grant of Probate has been granted, S33(1) Administration of Estate Act 1925 (as amended) provides that the personal representative(s) must hold the intestates estate on statutory trust with power to sell it. This means the personal representatives must collect in the deceased’s assets and use any ready money, or money arising from the sale of assets (to exclude chattels which pass directly to any surviving spouse/civil partner), to pay funeral, testamentary and administration expenses, debts and other liabilities. It is after this has taken place that the personal representatives can then calculate the amount left for distribution.
Who can apply for Letters of Administration when there is no Will?
The entitlement to apply for Letters of Administration is governed by r22 Non Contentious Probate Rules 1987 and follows the same order of entitlement to a share in the estate on intestacy. Please see “Determining Entitlement” below.
So how does distribution work, does my spouse/civil partner/next of kin get everything?
People often assume that their spouse/civil partner will automatically receive everything, but this is not the case as you will see below.
Determining Entitlement
Determining entitlement is not always straightforward. Although the intestacy rules set out how an intestate estate should be divided, there are some exceptions to these rules which include, but are not limited to, any assets held as beneficial joint tenants, nominated property, trust policies, certain pension schemes and donationes mortis causa (deathbed gifts).
The first thing to do when determining entitlement is to work out who has survived the deceased.
Spouse/Civil Partner and NO surviving issue (this does not include a cohabitee or life time partner) The surviving spouse/civil partner will take the estate absolutely.
Spouse/Civil Partner and issue ( the term issue means lineal descendants such as children and grandchildren. It does not include stepchildren but does include adopted children):
Spouse: – Personal chattels (s55(1)(x) Administration of Estate Act 1925).
- A statutory legacy of £270,000 free of tax and costs. Interest will be payable on this gift from the date of death until payment is made.
- 50% of the remaining residuary estate absolutely
Issue: – 50% of the residuary estate immediately
No surviving spouse but there is issue
The estate will be divided equally between the deceased’s children but if any children have predeceased, their issue will be entitled to the share that their parent would have taken had they survived.
If there is no spouse/civil partner and no issue the estate will pass in the following order:
- Parents – equally if both alive or to the survivor absolutely
- Brothers and sisters of the whole blood and the issue of such brother and sister who have predeceased the deceased
- Brothers and sisters of the half hood and the issue of such of such brother and sister who have predeceased the deceased
- Grandparents – equally if more than one or to the survivor absolutely
- Uncles and aunts of the whole blood or their issue if any have predeceased the deceased
- Uncles and aunts of the half blood or their issue if any have predeceased the deceased
- Crown
What happens to bank accounts when someone dies without a Will?
What happens to a persons bank account(s) depends on how they were held.
Any joint bank accounts will transfer automatically to the survivor on production of a death certificate.
Any bank accounts in the deceased’s sole name will be frozen until such time that the Grant of Probate has been issued.
Banks will release funds for things such a funeral expenses and payment of inheritance tax.
Do I need a Will if I have no assets?
A Will does not just dispose of assets. A Will can include things such as:
- funeral wishes
- provision for guardians
- provision for pets
- provision for personal possessions.
Can you inherit a gift if you are dead
There is no straightforward answer to this question but if you are dead, your estate may be entitled to any gift that you might have been entitled to. This will depend on whether there was a Will or whether the estate in question was passing under the intestacy rules.
If this situation arises, you should seek further legal advice.
What happens to a house when someone dies without a Will? And Who will get the house if my husband/civil partner die?
What happens to a property on death depends on how it is held:
Joint Tenants
If you own the property as joint tenants, the property will pass by survivorship to the survivor.
Tenants in Common
If you own the property as tenants in common you will be entitled to your share in the property; whether you receive your husband/civil partner’s share depends on how much it is worth.
Sole Ownership
If the deceased owned the property in their sole name then it will be distributed in accordance with the intestacy rules.
If you remember from above, if you die leaving a spouse/civil partner and issue, you are entitled to a statutory legacy of £270,000 and 50% of the remaining estate. Therefore, if the value of the property exceeds these amounts, and there is issue, your issue will be entitled to 50% of any value in the property exceeding these amounts.
Schedule 2 of the Intestates’ Estate Act 1952 gives a right for a spouse/civil partner to make an election to buy the home from their entitlement. This election enables the surviving spouse/civil partner, in effect, to buy the matrimonial home or the deceased’s interest in it if they were beneficial tenants in common or if the deceased owned the property in their sole name.
For example: Mr D and Mrs E own a property as tenants in common. Mr D dies without leaving a Will. The property was valued at £600,000 on death. Mr D had other assets totalling £100,000. This means that Mr D’s estate is worth £400,000 (£300,000 + £100,000). Mrs E would be entitled to her 50% (£300,000) of the property immediately. £270,000 of Mr D’s estate would pass to her as a statutory gift plus a further £65,00 being 50% of the remaining estate. This means that Mrs E would have sufficient funds to make an election to purchase Mr D’s share in the matrimonial home. The other £65,000 would be divided between their issue.
What if my spouse dies without leaving a Will.
If your spouse/civil partner dies without leaving a Will, their estate will administered in accordance with the intestacy rules. See above “determining entitlement”.
The same principles that have been discussed above will apply.
Emma Howlett is an experienced lawyer working in the private client department at Thomas Mansfield solicitors. Emma advises clients on Wills, Powers of Attorney, Court of Protection and Probate. Emma is a mum of two so understands the importance and need of having a Will to protect your children. https://www.tmwillsandprobate.co.uk/