Intestacy refers to the estate of a person who leaves an inheritance, but does not indicate where he or she wishes that money to go by use of a Will or other binding declaration.
In most contemporary common-law jurisdictions, the law of intestacy is patterned after the common law of descent. Property goes first or in major part to a spouse, then to children and their descendants. If there are no descendants, the rule sends you back up the family tree to the parents, the siblings, the siblings’ descendants, the grandparents, the parents’ siblings, and the parents’ siblings’ descendants, and usually so on further to the more remote members of family.
Where a person dies without leaving a Will, the rules of succession of the person’s place of habitual residence or of their domicile apply. In certain jurisdictions such as France, Switzerland and much of the Islamic world, entitlements arise whether or not there was a Will. These are known as forced heirship rights and are not typically found in common-law jurisdictions; where the rules of succession without a Will play a back-up role where an individual has not (or has not fully) exercised his or her right to dispose of property in a Will.
In England and Wales the rules of succession are the Intestacy Rules set out in the Administration of Estates Act and associated legislation. The Act sets out the order for distribution of property in the estate of the deceased.
In larger estates, the spouse will not receive the entire estate where the deceased left other blood relatives and left no Will. They will receive:
- All property passing to them by survivorship (such as the deceased’s share in the jointly owned family home)
- All property passing to them under the terms of a trust (such as a life insurance policy)
- A statutory legacy of a fixed sum (being a larger sum where the deceased left no children), and
- A life interest in half of the remaining estate
The children (or more distant relatives if there are no children) of the deceased will be entitled to half of the estate remaining immediately and the remaining half on the death of the surviving spouse.
In the United States, each of the separate States uses its own intestacy laws to determine the ownership of its resident’s intestate property.
As you can see from the above, Intestacy is unlikely to provide adequate provision for the complex 21st century family. The only way to have your wishes met is to set up a valid Will or to use more complex trust arrangements.