Partial Intestacy

What is Partial Intestacy?

Partial intestacy refers to a scenario where a deceased person’s will does not cover all of their assets, resulting in those assets being distributed according to intestacy rules. While the will may effectively dispose of a portion of the estate, any assets not addressed by the will are subject to the statutory intestacy rules.

Example:

Suppose an individual’s will leaves specific bequests to friends and charities but fails to address the residue of the estate. In that case, the residue will be distributed according to intestacy rules. This means that the assets not explicitly mentioned in the will are divided among the deceased’s relatives as if no will existed for those particular assets.

Causes of Partial Intestacy

Several factors can lead to partial intestacy, including:

Incomplete or Poorly Drafted Wills

A will that does not comprehensively address all of the deceased’s assets can result in partial intestacy. This often occurs when a professional does not draft the will, leading to omissions and ambiguities.

Failure of Specific Bequests

Specific bequests in a will can fail for various reasons, such as the death of a beneficiary before the testator (the person who made the will) without an alternative beneficiary being named or the asset no longer being part of the estate at the time of the testator’s death.

Changes in Asset Ownership

Changes in the ownership or value of assets between the time the will is written and the testator’s death can result in partial intestacy. For example, if the testator sells an asset bequeathed explicitly in the will and does not update the will to reflect this change, the proceeds from the sale may not be adequately addressed.

Overlooked Assets

Sometimes, assets may be overlooked and not included in the will. This can happen with newly acquired property or assets the testator simply forgot to mention.

Legal Framework and Rules of Intestacy

When partial intestacy occurs, the assets not covered by the will are distributed according to the rules of intestacy, which are set out in the Administration of Estates Act 1925 and subsequent amendments. The rules of intestacy dictate how an estate is divided among surviving relatives, ensuring a fair and predetermined distribution.

Order of Priority

The rules of intestacy establish an order of priority for who is entitled to inherit:

1. Spouse or Civil Partner: The surviving spouse or civil partner has the first right to inherit. They are entitled to the deceased’s personal chattels (personal possessions) and a statutory legacy (a fixed sum of money). The remaining estate is divided between the spouse and other relatives, depending on the presence of children or other heirs.
2. Children: If there are surviving children, they are entitled to a share of the estate after the spouse’s entitlements have been satisfied. If a child has predeceased the testator but has surviving descendants, those descendants inherit their parent’s share.
3. Parents: If there are no surviving spouse, civil partner, or children, the estate is distributed to the deceased’s parents.
4. Siblings: If there are no surviving parents, the estate goes to the deceased’s siblings or descendants.
5. More Distant Relatives: If there are no surviving siblings, the estate is distributed to more distant relatives, such as grandparents, aunts, uncles, and cousins.
6. The Crown: If no relatives can be found, the estate ultimately passes to the Crown.

Statutory Legacy

The statutory legacy for a surviving spouse or civil partner is a fixed sum set by law, currently £270,000 as of 2021. This amount may be subject to change and should be verified with up-to-date legal resources.

Division of Residue

After the statutory legacy and personal chattels have been distributed, the remaining estate (residue) is divided between the surviving spouse or civil partner and the children or other relatives, according to the rules of intestacy.

Implications of Partial Intestacy

Partial intestacy can have significant implications for the estate, the beneficiaries, and the administration process:

Unintended Beneficiaries

One of the primary implications of partial intestacy is that assets may be distributed to individuals whom the testator did not intend to benefit. This can lead to disputes among family members and other potential beneficiaries.

Increased Complexity and Costs

The administration of an estate subject to partial intestacy is often more complex and time-consuming. Executors and administrators must navigate the terms of the will and the intestacy rules, which can increase legal and administrative costs.

Potential for Disputes

Partial intestacy can lead to disputes among beneficiaries, particularly if there are ambiguities in the will or disagreements over the application of the intestacy rules. These disputes can further delay the administration process and deplete the estate’s value through legal fees.

Emotional Impact on Beneficiaries

The uncertainty and potential conflicts arising from partial intestacy can have a significant emotional impact on the beneficiaries, adding stress and strain to an already challenging time.

Practical Considerations for Avoiding Partial Intestacy

To prevent partial intestacy and ensure that an estate is distributed according to the testator’s wishes, it is essential to take proactive steps in estate planning and will drafting:

Professional Will Drafting

Engaging a professional solicitor to draft the will is crucial. A solicitor can ensure that all assets are comprehensively addressed and that the will is clear, unambiguous, and legally valid.

Regular Updates to the Will

Regularly reviewing and updating the will is essential, particularly after significant life events such as marriage, divorce, the birth of children, or the acquisition or disposal of assets. Keeping the will current reflects the testator’s most recent intentions and circumstances.

Comprehensive Asset Inventory

Maintaining a detailed inventory of all assets, including property, bank accounts, investments, and personal possessions, helps ensure that nothing is overlooked in the will. This inventory should be updated regularly and kept in a secure location.

Clear Residual Clauses

Including a clear and comprehensive residuary clause in the will is vital. The residuary clause addresses the distribution of any remaining assets not specifically bequeathed, preventing partial intestacy by ensuring that all assets are covered.

Contingency Planning

Planning for contingencies, such as the possibility of a beneficiary predeceasing the testator, helps prevent the failure of specific bequests. Naming alternative beneficiaries and considering various scenarios in the will can mitigate the risk of partial intestacy.

Case Studies

The Estate of Mr. Green

Mr. Green, a retired teacher, passed away, leaving a will that bequeathed specific assets to his children and grandchildren. However, the will did not address a recently acquired property or several investment accounts, so these assets fell into partial intestacy.

Mr. Green’s children, acting as executors, had to navigate both the will’s provisions and the intestacy rules. The unaddressed assets were distributed according to the laws of intestacy, which led to unexpected beneficiaries receiving shares of the estate. This caused significant delays and increased legal costs, ultimately reducing the estate’s value.

The Case of Mrs. White

Mrs. White’s will included specific bequests to her siblings and friends but failed to include a residuary clause. When Mrs. White passed away, her executors discovered that the will did not cover several assets, including her savings and an antique collection.

The lack of a residuary clause resulted in partial intestacy. The unaddressed assets were distributed according to the intestacy rules, leading to disputes among the beneficiaries. Mrs. White’s friends, who were named in the will for specific bequests, received less than expected, while distant relatives, who were not mentioned in the will, inherited part of the estate.

Avoiding Partial Intestacy through Regular Updates

Mr. and Mrs. Brown regularly reviewed and updated their wills with the help of a solicitor. After purchasing a holiday home and acquiring new investments, they updated their wills to include these assets and named alternative beneficiaries. They also ensured that their wills included comprehensive residuary clauses.

When Mr. Brown passed away, his estate was administered smoothly, with all assets covered by the updated will. The comprehensive planning and regular updates prevented partial intestacy, ensuring the estate was distributed according to Mr. Brown’s wishes without disputes or delays.

Conclusion

Partial intestacy is a significant concern in estate planning and administration. It occurs when a will does not comprehensively address all assets. Understanding the causes, implications, and legal framework of partial intestacy is essential for solicitors, executors, and beneficiaries.

To avoid partial intestacy, it is crucial to engage professional solicitors for will drafting, maintain comprehensive asset inventories, include clear residuary clauses, and regularly update the will. By taking these proactive steps, individuals can ensure that their estates are distributed according to their wishes, minimising the risk of disputes and the emotional and financial costs of partial intestacy.

Solicitors play a vital role in guiding clients through the complexities of estate planning, helping them navigate the legal landscape and achieve their objectives. Through careful planning and diligent execution, the challenges of partial intestacy can be effectively managed, providing peace of mind for the testator and their loved ones.