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Revised Intestacy Rules
Welcome to Burley Financial Services

What happens if you die without a valid will? The answer is not always what you would expect – or what you would want.

The rules of intestacy come into play when there is no will and vary between the different constituent countries of the United Kingdom (although England and Wales share the same law). The current English rules (summarised in the box below) were the subject of a partial review which started in June 2005, eventually producing a government announcement at the end of August 2008.

Main Intestacy Rules for England and Wales

If you die leaving:

  1. A spouse or civil partner who survives you by 28 days, but no children, parents, brothers, sisters, nephews or nieces
    Your spouse or civil partner takes everything outright.
  2. A spouse or civil partner who survives you by 28 days and children
    Your spouse or civil partner takes personal chattels (eg jewellery),
    plus £125,000 outright,
    plus a life interest (ie right to income only) from half of the residue.

    Children take half the residue on reaching 18 or marrying below that age,
    plus half the residue on the death of the surviving spouse or civil partner.
  3. A spouse or civil partner who survives you by 28 days, no children, but parents, brothers, sisters, nephews or nieces
    Your spouse or civil partner takes personal chattels (eg jewellery),
    plus £200,000 outright,
    plus half of the residue outright.

    Parents, failing whom brothers and sisters (nephews and nieces step into their parent's shoes if the parent is dead) take half the residue.
  4. No spouse or civil partner who survives you by 28 days
    Everything is taken by children, but if none:
    parents, but if none:
    brothers and sisters of the whole blood (nephews and nieces step into their parent's shoes if the parent is dead) but if none:
    brothers and sisters of the half blood (nephews and nieces step into their parent's shoes if the parent is dead) but if none:
    grandparents, but if none:
    uncles and aunts of the whole blood (cousins step into their parent's shoes), but if none:
    uncles and aunts of the half blood, but if none:
    The Crown

Note: Children includes adopted children and illegitimate children

From 1 February 2009, the lump sum payable to a surviving spouse or civil partner where you leave children will rise from £125,000 to £250,000. If there are no children, but surviving parents, brothers, sisters, nephews or nieces, the lump sum to your surviving spouse or civil partner rises from £200,000 to £450,000.

The increases to the lump sums are overdue. The last revision was made in 1993, since when the average UK house value has virtually trebled (despite recent falls). More changes are on the way – the Law Commission is now undertaking a broad review of intestacy and family provision, with draft legislation due ‘in late 2011'.

Whatever eventually emerges, the rules of intestacy will never be anything other than second best to a properly drafted, up to date will. Intestacy rules take no account of inheritance tax and implicitly assume anybody aged 18 is financially responsible.

ACTION Advice? Call our appointment hotline on 0845 4630462 - first appointment at our cost!

If you do not have a will, then make one. And if you do have a will, make sure it is up to date. If your will is much more than a year old, it may need amending to take account of significant inheritance tax changes announced in last year's Pre-Budget Report.

A will is the cornerstone of much inheritance tax planning, so if you amend your will, make sure you talk through the consequences with us

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This news item is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as at July 2008. No action must be taken or refrained from based on its contents alone. Accordingly no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.

Burley Financial Services Ltd is a private limited company registered in England and Wales under company no. 121 7536.
Burley Financial Services Ltd is authorised and regulated by the Financial Services Authority.
We are entered on the FSA Register no 125891 at www.fsa.gov.uk/register