If someone dies without leaving a Will, they are said to be intestate. If they leave a Will but it does not deal with the whole of their estate, they are partially intestate.
When someone dies intestate, their estate is distributed in accordance with the Rules of Intestacy (the Rules). The Rules set out in order of preference who is entitled to inherit. If someone leaves a spouse and children, then the spouse will inherit all of their personal possessions plus the first £270,000 of the net estate. The rest of the estate is split in half, with the spouse receiving one half and the children sharing the remainder equally. This can mean that children receive substantially less than a spouse.
Under the Rules, some people will not inherit anything, including cohabitees and stepchildren.
When a Will does not deal with the whole of an estate
Drawing up and executing a Will so that it is valid can be complicated. There are strict rules governing Wills and the way in which they must be signed and witnessed. If mistakes are made, it can mean that a Will is invalid or, in some circumstances, partially invalid.
Partial invalidity could arise if the residue of the estate, which is everything that is left after gifts have been made to named individuals, is left to a beneficiary or beneficiaries who have already died.
There is also the risk that if a Will is drafted by someone other than a qualified professional, the wording may be ambiguous and some of the gifts made in the Will may fail. If they cannot be distributed to the beneficiaries for whom they were intended, then that portion of the estate will have to be dealt with under the Rules of Intestacy.
This means that some of the deceased’s assets may pass to individuals whom they would not have chosen to receive them. It can also mean that those they wanted to inherit could miss out if the Will is ambiguous or poorly drafted.
Dealing with partial intestacy
Where partial intestacy has arisen, it can make the winding up of an estate more complex and time consuming. The executors will need to try and identify the beneficiaries who are entitled to inherit. This is not always straightforward and there is a risk that a beneficiary could be omitted, in which case they could subsequently make a claim against the executor.
If relatives cannot be found, then the executor will need to arrange for funds to be safeguarded until such time as they are located. It may also be necessary to put insurance in place to cover the risk of beneficiaries turning up in the future.
This is likely to involve the estate in expenses, which will mean that there is less money available for named beneficiaries.
Avoiding partial intestacy
It is fairly simple to take steps to avoid partial intestacy. Having a Will drawn up by a professional will remove the risk of ambiguity or clauses that fail. Reviewing the Will every five years or in the light of any changes, such as the death of a beneficiary, will also ensure that a Will is effective when the time comes. Appointing substitute beneficiaries or stipulating that a beneficiary’s share will pass to others if they have died will also avoid a gift being unable to pass.
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