Intestacy rules - Partial intestacy

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Overview

Partial intestacy occurs when a will doesn't effectively cover an entire estate. For SQE1 FLK2 exam candidates, understanding partial intestacy is vital as it intersects with key probate law, estate administration, and intestate succession rules. This guide delves into the legal framework, causes, consequences, and practical aspects of partial intestacy, providing essential insights for future legal practitioners.

Legal Framework Governing Partial Intestacy

The Administration of Estates Act 1925

The Administration of Estates Act 1925 is fundamental to intestacy law in England and Wales. Key provisions include:

  • Section 46: Details the order of distribution for intestate estates
  • Section 47: Defines the statutory legacy for surviving spouses or civil partners
  • Section 48: Covers the distribution of the residuary estate

The Inheritance and Trustees' Powers Act 2014

This Act introduced significant changes to the intestacy rules:

  • Increased the statutory legacy for surviving spouses or civil partners
  • Streamlined distribution rules when the deceased leaves a spouse and children
  • Clarified the position of adopted children in intestacy situations

Case Law Developments

Recent judicial decisions have clarified the application of intestacy rules:

  • Ilott v The Blue Cross and others [2017] UKSC 17: Highlighted testamentary freedom and limits of intestacy rules.
  • Re Leach (Deceased) [2018] EWHC 1132 (Ch): Addressed interpretation of partial intestacy provisions in a will.

Causes and Consequences of Partial Intestacy

Partial intestacy can arise from various circumstances:

  1. Incomplete Residuary Provisions: When a will lacks a comprehensive residuary clause or the clause fails.

  2. Lapse of Gifts: If a beneficiary predeceases the testator and there are no substitution provisions.

  3. Invalid Will Provisions: Clauses may be invalid due to lack of testamentary capacity, undue influence, or formalities failure.

  4. Omission of Assets: Certain assets inadvertently left out of the will.

Application of Intestacy Rules in Partial Intestacy

When partial intestacy occurs, the undisposed portion of the estate follows the statutory order outlined by the Administration of Estates Act 1925, as amended:

  1. Surviving Spouse or Civil Partner:

    • Receives all personal chattels absolutely
    • A statutory legacy (current amount £270,000 for deaths after 6 February 2020)
    • Half of any residue if there are surviving children

  2. Children or Other Descendants:

    • Share the remaining estate equally or inherit entirely if no spouse/civil partner survives
    • If a child predeceases, leaving descendants, those descendants take their parent's share per stirpes

  3. Parents:

    • If no spouse/partner or descendants, parents inherit equally

  4. Siblings:

    • Full siblings take priority over half-siblings
    • If a sibling predeceases, leaving descendants, those descendants take their parent's share per stirpes

  5. Half-Siblings:

    • Inherit if there are no full siblings or their descendants

  6. More Distant Relatives:

    • Estate continues to be distributed among increasingly remote relatives according to order

  7. The Crown:

    • If no eligible relatives exist, the estate passes to the Crown as bona vacantia

Practical Considerations for Legal Practitioners

Estate Planning

  1. Comprehensive Will Drafting:

    • Ensure all assets are covered in the will
    • Draft clear and definite residuary clauses
    • Include provisions for gifts to predeceasing beneficiaries

  2. Regular Will Reviews:

    • Advise clients to update wills regularly, especially after major life events

  3. Asset Inventory:

    • Keep an up-to-date list of assets for comprehensive coverage in the will

Estate Administration Challenges

  1. Identifying Partial Intestacy:

    • Review the will and estate assets carefully to find any undisposed portions

  2. Tracing Beneficiaries:

    • Conduct thorough searches for possible beneficiaries under intestacy rules

  3. Valuation and Distribution:

    • Accurately assess the intestate portion of the estate
    • Calculate and distribute statutory legacies and shares according to legislation

  4. Tax Impacts:

    • Consider potential tax implications when partial intestacy arises

Case Study: Navigating Partial Intestacy

Consider the following scenario:

A testator, Thomas, dies leaving an estate valued at £1,500,000. His will specifies:

  • A gift of £200,000 to his daughter, Emma
  • His holiday home (valued at £300,000) to his son, James
  • A gift of £100,000 to his local charity

The will contains no residuary clause. Thomas is survived by his wife, Sarah, and his two children.

Analysis:

  1. Total specified gifts are £600,000, leaving £900,000 undisposed.
  2. This amount falls into partial intestacy.
  3. Under intestacy rules:
    • Sarah receives all personal chattels and a statutory legacy of £270,000
    • The remaining £630,000 is split equally between Sarah (£315,000) and the two children (£157,500 each)

This may not align with Thomas's intentions, underscoring the need for thorough estate planning.

Conclusion

Partial intestacy presents challenges in estate administration and can lead to unexpected outcomes in asset distribution. For SQE1 FLK2 exam candidates and future practitioners, a solid grasp of the legal framework, causes, and outcomes of partial intestacy is essential. This knowledge supports:

  • Offering informed advice on estate planning
  • Crafting effective wills
  • Managing estate administration complexities when partial intestacy arises

As laws continue to change, staying updated on legislative shifts and case law developments in this area is crucial for effective legal practice in succession and probate matters.