Intestacy rules - Distribution under s46 Administration of E...

Learning Outcomes

This article outlines intestacy distribution under s46 AEA 1925 for SQE1 preparation, including:

• The statutory order of entitlement, how to determine which class takes in total or partial intestacy, and the effect of representation within each class
• Surviving spouse or civil partner entitlement with and without issue, covering personal chattels, the statutory legacy and interest, the share of residue, and typical calculation steps
• Statutory trusts for shares taken by issue, including vesting at 18 or earlier marriage or civil partnership, trustees’ powers of maintenance and advancement, and the treatment of children en ventre sa mère
• Priority between whole‑blood and half‑blood relatives, and representation through issue in collateral lines when a relative in a closer class has predeceased
• Property that bypasses intestacy, such as joint tenancy survivorship, pension nominations, and life policies in trust, and how these assets are excluded from the calculation of the intestate estate
• The 28‑day survival requirement for spouses or civil partners, application of the commorientes rule, and appropriation of the family home to a surviving spouse or civil partner
• Persons not entitled on intestacy (including unmarried partners and stepchildren unless adopted), and when the Crown takes as bona vacantia so that alternative remedies, such as claims under the Inheritance (Provision for Family and Dependants) Act 1975, must be considered

SQE1 Syllabus

For SQE1, you are required to understand distribution on intestacy under s46 AEA 1925, with a focus on the following syllabus points:

• The statutory hierarchy of beneficiaries under s46 AEA 1925 and when each class takes
• Spouse/civil partner rights: personal chattels, statutory legacy (amount and interest), and share of residue
• Meaning of personal chattels under s55(1)(x) AEA 1925 and common inclusions/exclusions
• Issue taking on statutory trusts: vesting at 18 or earlier marriage/civil partnership; maintenance (s31 TA 1925) and advancement (s32 TA 1925)
• Representation among collateral relatives; whole blood vs half blood priority
• Adopted and non-marital children; exclusion of stepchildren unless adopted
• Effect of survivorship, property outside the estate, and partial intestacy
• 28‑day survival requirement for spouses/civil partners and the commorientes rule (s184 LPA 1925)
• Appropriation of the family home for a surviving spouse/civil partner (s41 AEA 1925)
• Bona vacantia where no entitled relatives survive; the role of the Crown

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Who inherits the estate if a person dies intestate leaving a spouse and two children?
2. What is the statutory legacy, and who is entitled to it?
3. If an intestate dies leaving no spouse, children, or parents, who is next in line to inherit?
4. How are shares for minor beneficiaries managed under the intestacy rules?

Introduction

When a person dies without a valid will, their estate is distributed according to the statutory intestacy rules set out in section 46 of the Administration of Estates Act 1925 (AEA 1925). These rules provide a fixed order of entitlement among relatives and determine how assets are divided. Understanding the statutory hierarchy and the operation of statutory trusts is essential for advising clients and answering SQE1 questions on intestacy. The rules apply on both total intestacy and partial intestacy where a will fails to dispose of all assets.

Key Term: intestacy
Intestacy occurs when a person dies without leaving a valid will, or when a will does not dispose of all their property (partial intestacy).

Key Term: partial intestacy
Where a valid will exists but does not dispose of the whole estate; the undisposed part passes under the intestacy rules.

The Statutory Order of Entitlement

Section 46 AEA 1925 sets out a strict order in which relatives inherit an intestate estate. The rules apply to both total intestacy (no valid will at all) and partial intestacy (where a will fails to dispose of all assets).

Key Term: intestacy
Intestacy occurs when a person dies without leaving a valid will, or when a will does not dispose of all their property.

The Hierarchy of Beneficiaries

The intestacy rules distribute the estate in the following order:

1. Surviving spouse or civil partner
2. Issue (children, grandchildren, etc.)
3. Parents
4. Brothers and sisters of the whole blood (and their issue)
5. Brothers and sisters of the half blood (and their issue)
6. Grandparents
7. Uncles and aunts of the whole blood (and their issue)
8. Uncles and aunts of the half blood (and their issue)
9. The Crown (bona vacantia)

The estate is distributed to the first category in which a relative survives; more distant relatives are ignored if a closer category is satisfied. Representation through issue applies within the collateral lines listed, so the children of a predeceasing whole-blood sibling can inherit their parent’s share.

Key Term: whole blood and half blood
Whole blood means sharing both parents with the intestate; half blood means sharing only one parent. Whole-blood siblings rank ahead of half-blood siblings and their issue.

Key Term: issue
Issue means all direct lineal descendants of the deceased, including children, grandchildren, and so on. It includes adopted children and non‑marital children.

Key Term: bona vacantia
Where no entitled relatives survive, the estate passes to the Crown (or to the Duchy of Lancaster/Cornwall for property in those areas) as ownerless property.

Children adopted by the intestate, and the intestate’s own children born outside marriage, are included in “issue”; stepchildren are not, unless formally adopted. An adopted child inherits from adoptive parents (and their family), but not from biological parents (and their family).

Surviving Spouse or Civil Partner

The spouse or civil partner is the primary beneficiary under the rules. Their entitlement depends on whether the deceased left issue. Separation is irrelevant; entitlement depends on legal status at death. A former spouse/civil partner (after decree absolute/final order) is not entitled.

• A spouse/civil partner must survive the intestate by 28 days to inherit under s46.
• A void marriage confers no rights; a voidable marriage counts until annulled. See Re Seaford (divorce not yet final at time of death) and Shaw v Shaw (void bigamy: no spouse entitlement).

Key Term: commorientes
If two people die in circumstances where the order of deaths cannot be determined, the elder is deemed to have died first (s184 Law of Property Act 1925).

If there is no issue

• The spouse or civil partner inherits the entire estate.

If there is issue

• The spouse or civil partner receives:
  • All personal chattels
  • A fixed statutory legacy (currently £270,000 for deaths after 6 February 2020), free of tax and costs, plus interest from death at the Bank of England rate applicable on the day of death until payment
  • Half of the remaining estate (the residue)
• The other half of the residue is shared equally among the issue on statutory trusts.

Key Term: personal chattels
Tangible movable property of the deceased, other than (i) money or securities for money, (ii) items used at death solely or mainly for business purposes, or (iii) items held solely as investments (s55(1)(x) AEA 1925). Typical inclusions: furniture, cars used for personal enjoyment, clothing. Typical exclusions: share portfolios, artworks purchased and held purely as an investment, wine collections held as investment stock.

Where the family home is part of the residuary estate, the surviving spouse/civil partner can require it to be appropriated to them in or towards satisfaction of their entitlement under s41 AEA 1925, provided they were living there. If the property exceeds their entitlement, they must pay the “equality money” to the estate.

Key Term: statutory legacy
The fixed sum payable to a surviving spouse/civil partner when the intestate leaves issue (currently £270,000 for deaths on/after 6 February 2020), together with interest at the Bank of England rate from death until payment.

Children and Other Issue

If there is no surviving spouse or civil partner, the estate passes to the issue in equal shares. If a child has died before the intestate but left children of their own, those children inherit their parent’s share equally.

Key Term: per stirpes
Distribution “by the stock” so that each branch of the family takes the share that their deceased ancestor would have taken, with that share subdivided equally among the descendants in that branch.

Issue take on statutory trusts, so a beneficiary’s share is held until they reach 18 or marry/enter a civil partnership earlier. Trustees may apply income for maintenance, education, or benefit (s31 Trustee Act 1925) and may advance capital (s32 Trustee Act 1925) within statutory limits. A child en ventre sa mère (conceived before death but born alive subsequently) can inherit.

Other Relatives

If there is no spouse, civil partner, or issue, the estate passes to the next category in the hierarchy. Each class must be exhausted before moving to the next. Within siblings/uncles/aunts classes, whole blood is preferred to half blood. If none in the listed classes survive (including their issue by representation), the estate passes as bona vacantia.

Key Term: statutory trusts
Trusts imposed by s46 AEA 1925 for shares of issue: vesting at 18 or earlier marriage/civil partnership; with income maintenance and capital advancement powers under Trustee Act 1925.

Statutory Trusts for Minors

Where a beneficiary entitled under the intestacy rules is under 18, their share is held on statutory trusts. The trustees (usually the personal representatives) manage and invest the share until the beneficiary reaches 18 or marries/enters a civil partnership before that age. Income may be applied for maintenance, education or benefit; otherwise, it is accumulated and added to capital. Capital may be advanced for the beneficiary’s benefit under s32 Trustee Act 1925; advances are brought into account when the beneficiary becomes absolutely entitled.

Key Term: trustees
Persons appointed to hold and manage property on behalf of beneficiaries, with duties set by law or trust instrument.

Procedurally, where a minor is beneficially entitled on intestacy, two administrators are generally required to take the grant (reflecting the need to overreach and protect minor interests). The trust usually ends at 18 (or earlier marriage/civil partnership), when capital is transferred.

Key Term: statutory legacy
A fixed sum payable to the surviving spouse or civil partner where the deceased leaves issue, set by statutory instrument (currently £270,000).

Exclusion of Unmarried Partners and Cohabitants

The intestacy rules do not recognise unmarried partners or cohabitants. Only legal spouses or civil partners are entitled to inherit under s46 AEA 1925. Cohabitants must rely on other remedies, such as a claim under the Inheritance (Provision for Family and Dependants) Act 1975, if eligible.

Application of the Rules: Worked Examples

Worked Example 1.1

A dies intestate, survived by a spouse (B) and two children (C and D). The estate is worth £500,000.

Answer:

• B receives all personal chattels, £270,000 statutory legacy, and half of the remaining £230,000 (£115,000).
• C and D share the other £115,000 equally (£57,500 each), held on statutory trusts if they are under 18.

Worked Example 1.2

E dies intestate, unmarried, with no children. E’s parents are deceased, but E has a brother (F) and a niece (G, daughter of a predeceased sister).

Answer:

• F inherits half the estate.
• G (as issue of the predeceased sister) inherits the other half.

Worked Example 1.3

H dies intestate, survived by a long-term cohabitant (J) and a sister (K). H has no spouse, civil partner, or children.

Answer:

• J is not entitled to inherit under the intestacy rules.
• K inherits the entire estate.

Worked Example 1.4

L dies intestate, survived by a spouse (M) but no issue. The estate (after debts) is £320,000, including personal chattels.

Answer:

• M takes the entire estate (no issue means the spouse/civil partner takes all).

Worked Example 1.5

N dies intestate leaving a spouse (P) and one adult child (Q). The estate is £650,000, including a home worth £400,000 in N’s sole name. P was living in the home. There are typical personal chattels worth £20,000.

Answer:

• P takes all personal chattels and the £270,000 statutory legacy (with interest).
• Residue after legacy and chattels is £360,000. P takes half (£180,000) and Q takes half (£180,000) on statutory trusts (Q is adult so takes absolutely).
• P can require appropriation of the home under s41 AEA 1925 towards P’s combined entitlement (£270,000 legacy + £180,000 residue share), paying equality money if needed. If the home is appropriated at £400,000, P must fund the excess over P’s £450,000 total entitlement? No—P’s total entitlement is £270,000 + £180,000 = £450,000, which exceeds the house value, so no equality money is required and P keeps the balance of entitlement in cash or other assets.

Worked Example 1.6

R dies intestate leaving no spouse or civil partner. R is survived by two children, S and T. S predeceased R leaving two children (U and V). Estate is £300,000.

Answer:

• Issue take per stirpes on statutory trusts: S’s branch takes half (£150,000) divided equally between U and V (£75,000 each). T takes the other half (£150,000).

Worked Example 1.7

W dies intestate with no spouse, issue, or parents. W is survived by a half‑brother (HB) and the child (C) of a predeceased whole‑blood sister.

Answer:

• Whole blood ranks ahead of half blood. The class “brothers and sisters of the whole blood (and their issue)” takes before the half blood. C (as issue of the predeceased whole‑blood sister) inherits the whole estate. HB takes nothing.

Statutory Trusts: Trustee Duties

Trustees managing statutory trusts must:

• Invest assets prudently (see Trustee Act 2000), having regard to suitability and diversification
• Apply income for the minor’s maintenance, education, or benefit (s31 Trustee Act 1925), otherwise accumulate it
• Consider advancing capital for a beneficiary’s benefit under s32 Trustee Act 1925 (subject to prior life interests, where relevant)
• Transfer the capital to the beneficiary at 18 or on earlier marriage/civil partnership

Trustees should document decisions, keep trust accounts, and review investments regularly. Where minors are beneficially entitled, two administrators are typically required to take the grant to protect those interests.

Exam Warning

The intestacy rules do not provide for unmarried partners, stepchildren (unless adopted), or friends. Do not assume cohabitants or stepchildren are entitled. A separated spouse/civil partner remains entitled unless there has been a final divorce/dissolution order. A spouse/civil partner must survive the intestate by 28 days. Apply the commorientes rule if the order of death is uncertain: the elder is deemed to die first. Distinguish personal chattels (excluded if held solely as investments or solely/ mainly for business use). Where there is no entitled relative, the estate passes to the Crown as bona vacantia.

Revision Tip

Memorise the order of entitlement and the spouse/civil partner’s three-part package where there is issue (chattels + statutory legacy with interest + half residue). Practise scenarios involving predeceasing children with issue (per stirpes statutory trusts), half‑blood vs whole‑blood priority, and appropriation of the family home.

Summary

Key Point Checklist

This article has covered the following key knowledge points:

• The statutory order of entitlement under s46 AEA 1925 and how representation operates within classes
• The rights of surviving spouses/civil partners: personal chattels, statutory legacy (amount and interest), and share of residue
• The meaning of personal chattels and typical inclusions/exclusions
• Statutory trusts for issue: vesting at 18/earlier marriage or civil partnership, maintenance and advancement powers
• Whole blood vs half blood priority among collateral relatives
• Adopted and non‑marital children included; stepchildren excluded unless adopted
• The 28‑day survival requirement, commorientes rule, and their effect on entitlement
• Appropriation of the family home by the surviving spouse/civil partner under s41 AEA 1925
• Property passing outside the estate (e.g., survivorship, pension nominations, life policies in trust)
• Bona vacantia where no entitled relatives survive; the Crown’s role

Key Terms and Concepts

• intestacy
• partial intestacy
• issue
• per stirpes
• personal chattels
• statutory trusts
• trustees
• statutory legacy
• whole blood and half blood
• commorientes
• bona vacantia