CASE HISTORIES OF INTESTATE WILLS

The rules of precedence, for intestate wills, can be summarised as follows:

The general rule, in England and Wales, apart from when there is a surviving spouse, is that direct descendants (children and grandchildren) always come first. If there are no direct descendants, then look for direct ancestors (parents and grandparents). In the absence of direct ancestors, search for other direct descendants of those ancestors (i.e. collateral relatives). Therefore, in the absence of parents, look for brothers and sisters and then nephews and nieces and finally, great nephews and great nieces. Failing that, in the absence of grandparents, uncles and aunts come next and then first cousins.

Under intestate rules, stepchildren do not count as children, but legitimate children, illegitimate children and adopted children do. In cases where no relatives can be found, the estate passes to the Crown. The following examples, all assume that inheritance tax has already been deducted. The rules are similar in Scotland and Northern Ireland, but where any differences occur they will be mentioned.

1. Unequal Shares

A common misconception about intestate wills is that if two or more people have the same relationship to the deceased, they will inherit the same amount. This may happen if the person makes a will to that effect, but without a will, the rules are quite simple. Children each receive the same amount from their deceased parent. If one of the children is already dead, the share he or she would have received, is divided equally between that person's children, (i.e. the grandchildren of the deceased). In the extreme case where only grandchildren survive their grandparent, each grandchild's share will depend on how many brothers and sisters he or she has. It is unfortunate, therefore, if a grandchild comes from a large sib family.

Example A widower leaves £500,000. Of his 5 children, 2 daughters are still alive, but his 3 sons are already dead. Son no. 1 leaves 3 children, no. 2 leaves one child and no. 3 leaves 6 children.

The estate is divided as follows:

The 2 surviving daughters receive £100,000 each. The 3 children from son no. 1 receive £33,333 each.

The only child from son no. 2 receives £100,000. The 6 children from son no. 3 receive £16,666 each.

The above rule also applies when a person's only surviving relatives are nephews and nieces. In the absence of brothers and sisters of the deceased, who would have received equal shares, the shares received by each nephew and niece depends on how many brothers and sisters each has.

In Scotland the rules are more complicated. If one or some of the children are already dead, as in England and Wales, the offspring of those children divide their parent's share according to how many brothers and sisters are in each family. However, if all the children are dead, the grandchildren get equal shares, irrespective of family size. The same principle applies to brothers and sisters and nephews and nieces.

2. Relationship Limits

Another fallacy is that because you are the only surviving relative, you will automatically inherit from an intestate person. In England and Wales, great aunts and great uncles, second cousins and more distant relatives do not inherit. If they are the only relatives, the estate passes to the crown. However, in Scotland and Northern Ireland these rules do not apply, and they can inherit provided they are the only surviving relatives.

Example An intestate person dies leaving £100,000. He has 3 first cousins and 2 second cousins as the only relatives. Their precise relationship to the deceased is shown in Figure 17.

Figure 17 First and Second cousins

O♂ is the deceased; P♀, Q♀ and R♂ are his first cousins; and S♀ and T♀ are his second cousins.

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The second cousins (S and T) would not receive anything, the entire estate would pass to the first cousins (P, Q and R). However, the first cousins would not inherit equally, because first cousins only benefit if no aunts or uncles survive. Each uncle's or aunt's share is divided between his or her children. Since one uncle had two children and the other only one, cousin P would receive £50,000 and cousins Q and R would each only receive £25,000.

If one of the cousins is already dead, his or her children (not shown), who have the relationship of first cousins once removed (forwards), to the deceased, would share that cousin's inheritance.

In Scotland, each first cousin (P,Q and R) would receive £33,333, since both uncles are dead (see rules on here); also, in Scotland and Northern Ireland, in the absence of first cousins and their descendants, the order of priority would then be: great uncle (E♂); first cousin, once removed (backwards) (M♂); and finally, second cousins (S♀ and T♀).

3. Spouse's Entitlement

It is often thought, wrongly, that if no will is made, the spouse of the deceased will inherit the whole estate. This only occurs when the spouse survives for at least 28 days and when the estate is worth £125,000 or less. If it is worth more than this and the deceased has children, the spouse gets the first £125,000, all personal goods, and a life interest in half the remainder; the children share the rest. The children are all those of the deceased, not necessarily of the spouse. This does not apply in Northern Ireland, as there is no life interest rule; if there is only one child, the spouse keeps half the remainder, without any conditions; but if there are two or more children, the spouse only keeps one third.

If there are no children, the spouse gets the first £200,000 and personal goods plus half the remainder. The balance then goes to the deceased's parents. If the parents are dead, brothers and sisters share the remainder. If there are no surviving brothers and sisters, the spouse inherits everything. If the spouse owns half of the house, that is not included in the estate. In Scotland, the rules for the spouse's entitlement for house and contents is different from England, Wales and Northern Ireland; for full details see Elmhirst (2004).

Example 1 A man with a wife and one son dies intestate, leaving an estate worth £700,000.

The wife gets £125,000 and all personal goods plus a life interest in £287,500. The son receives £287,500 immediately, and the capital from the remaining £287,500 when his mother dies. In Northern Ireland the wife would receive £412,000 and the son only £287,500, but if there had been two children, she would only have received £316,666, and the children £191,666 each.

Example 2 A woman dies leaving £300,000 and is survived by a husband, father and brother.

The husband gets £250,000 and all personal goods. The father receives £50,000 but the brother gets nothing. If the deceased had meant the brother to have a legacy, she should have made a will. As shown in the next section, the situation is different in Scotland, the father and the brother would each have received £25,000.

4. Parents versus Brothers and Sisters

If a person is unmarried, or has no surviving spouse or children, the parents, as seen in the previous example, have priority over brothers and sisters. Two parents would divide the estate but a single surviving parent would receive everything. If the parents are both dead, then the estate would be divided equally between the brothers and sisters. If a brother or sister is already dead, then the nephews and nieces, who are the children of that sibling, would inherit the dead sibling's share. However, in Scotland, if parents and siblings both exist, the estate is split in half and one half is divided equally between the two parents, and the other between the siblings.

Example A man dies and leaves £60,000. His father is still alive and there are four brothers and sisters.

In England and Wales the father receives the entire £60,000; but in Scotland he would only receive £30,000 and each of the 4 sibs would inherit £7,500. However, if one of the brothers or sisters is already dead, his or her children would share the £7,500.

5. Full versus Half Relationships

Full relationships always take precedence over half relationships in England, Wales and Scotland, but not in Northern Ireland. Therefore, full sibs have priority over half sibs; full uncles and aunts over half uncles and aunts; and full first cousins over half first cousins. Since second cousins do not inherit, half second cousins would have no entitlement, except in Scotland and Northern Ireland.

Example 1 A man dies intestate leaving property and goods to the value of £400,000. He originally had two full brothers and two half sisters. One brother is already dead but is survived by his son.

The half sisters would not receive any inheritance. One full brother would receive £200,000 and the son of the other brother, also £200,000. A will would have produced a fairer result. In Northern Ireland, however, each half sister and full brother would have received £100,000.

Example 2 A woman dies leaving £50,000; her only surviving relatives are two half uncles. A third half uncle is already dead and leaves one daughter, who is the half first cousin of the deceased.

The inheritance is split three ways, the two half uncles each receive £16,666 and the half first cousin also receives the same amount (£16,666).

6. Grandparents versus Uncles, Aunts and First Cousins

In England, Wales and Northern Ireland, any surviving grandparents, in the absence of other close relatives, would have priority over uncles and aunts and first cousins; but in Scotland, the situation is reversed and uncles and aunts have precedence over grandparents.

Example A man dies leaving £200,000. His nearest relatives are a grandfather and two uncles.

In England and Wales, the grandfather would receive the entire £200,000; but in Scotland, the two uncles would each have received £100,000. In Scotland, first cousins would only inherit if their parents were dead. In England and Wales, they would only inherit if both grandparents and parents were dead.