Business, Legal & Accounting Glossary
legal the state of being intestate, or of dying without having made a valid will
Intestacy is the condition of the estate of a person who dies owning property greater than the sum of his or her enforceable debts and funeral expenses without having made a valid will or other binding declaration; alternatively, where such a will or declaration has been made, but only applies to part of the estate, the remaining estate forms the “Intestate Estate”. Intestacy law, also referred to as the law of descent and distribution or intestate succession statutes, refers to the body of common law that determines who is entitled to the property from the estate under the rules of inheritance.
The concept of intestacy has a limited application in those jurisdictions that follow civil law or Roman law because the concept of a will is itself less important; the doctrine of legitime automatically gives a deceased person’s relatives title to all or a large part of the estate’s property by operation of law, beyond the power of the deceased person to alter by legacy. This share can often only be decreased on account of some very specific misconduct by the heir. When referring to the devolution of estates generally in an international context, the “laws of succession” is the commonplace term covering testate and intestate estates in common law jurisdictions together with forced heirship rules typically applying in civil law and Sharia law jurisdictions.
After the Statute of Wills, 32 Henry VIII c. 1, Englishmen (and unmarried or widowed women) could dispose of their lands and property by a will. Their personal property could formerly be disposed of by a “testament,” hence the hallowed legal merism “Last Will and Testament.”
Common law sharply distinguished between real property and chattels. Real property for which no disposition had been made by will passed by the law of kinship and descent; chattel property for which no disposition had been made by testament was escheat to the Crown, or given to the Church for charitable purposes. This law became obsolete as England moved from being a feudal to a mercantile society, and chattels more valuable than land were being accumulated by townspeople.
In most contemporary common-law jurisdictions, the law of intestacy is patterned after the common law of descent. Property goes first 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 sometimes further to the more remote degrees of kinship. The operation of these laws varies from one jurisdiction to another. Attempts in the United States to make the law with respect to intestate succession uniform from state to state have met with limited success.
In England and Wales, the Intestacy Rules have been uniform since 1925 and strikingly similar rules apply in Northern Ireland, the Republic of Ireland and many Commonwealth countries and Crown dependencies. These rules have been supplemented by the discretionary provisions of the 1989 Inheritance (Provision for Dependants) Act in relation to persons domiciled in any of the jurisdictions making up the United Kingdom so that fair provision can be made for a dependent spouse or other relative where the strict divisions set down in the intestacy rules would produce an unfair result, for example by providing additional support for a dependent minor or disabled child vis-a-vis an adult child who has a career and no longer depends on their parent.
If a person dies intestate with no identifiable heirs, the person’s estate generally escheats (i.e. is legally assigned) to the government.
The distribution of the property of an intestate decedent is the responsibility of the administrator (or personal representative) of the estate: typically the administrator is chosen by the court having jurisdiction over the decedent’s property, and is frequently (but not always) a person nominated by a majority of the decedent’s heirs.
In the United States, intestacy laws vary from state to state under the American practice of federalism. As in England, most jurisdictions apply rules of intestate succession to determine next of kin who become legal heirs to the estate. Also as in England, if no identifiable heirs are discovered, the property may escheat to the government.
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 (intestate succession) 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. For persons with a wealth below a certain threshold (GBP 275,000 in 2005), the whole of the estate will pass to the deceased’s spouse or, from late 2005, their registered civil partner. Such transfers below the threshold are exempt from UK Inheritance tax.
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:
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.
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This glossary post was last updated: 24th April, 2020 | 0 Views.