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Introduction
When someone dies without a Will the Intestacy Rules apply and they can create a complex situation. They dictate how an estate will be divided up and, in some cases, they create family difficulties and can increase the inheritance tax paid. You may know exactly what someone wanted to happen when they died even if they didn’t get around to making a Will. These cases all differ, and they can be complex. Mckenzie Law will give you expert advice to help you do the right things and achieve the best outcome if someone dies without a Will. Please read the case study below for a recent example.
Case study
James contacted us for help and advice because his cousin Martin had died without a Will a few weeks earlier.
Martin was an only child. He had never been married, never had any children and he had no surviving parents or aunts and uncles.
As cousins James and Martin had been close and they kept in regular contact throughout their lives. James knew that Martin was a keen supporter of various charities and thought that he would have made a Will leaving his estate to these charities. James even remembered Martin asking him once if he would be an executor of the Will. He agreed to this and then heard nothing more about it.
Searching for a Will when someone dies
For this reason, James assumed that Martin had left a Will when he died; now he had to find it. He began by searching Martin’s house for the Will but couldn’t find the Will or a clue about where it might be. James contacted some local firms of Solicitors to see if they had the Will in storage. Again, he drew a blank. It began to look like Martin had died with no Will. James had already spent quite some time looking for a Will and he was beginning to feel anxious that he wouldn’t find it; he knew things would be more complicated if Martin had died without a Will. James also knew that there was lots to sort out and he didn’t know what he could do about it if there was no Will.
It was at this point that James sought out the assistance of McKenzie Law, and the first thing we did was conduct a Certainty Will Search. This checked whether Martin had made a Will that was recorded with the National Will Register. The Will search also automatically contacted all the law firms and will writers within a targeted search area of where Martin lived to try and find a Will for him.
What can be done if there is no Will?
While Certainty was trying to find a Will for Martin. James asked us ‘what can I do if there is no Will?’ We advised James that while Certainty was searching for a Will, he should limit what he did. If Martin had made a Will which didn’t appoint James as executor, it was important that he didn’t ‘intermeddle’ (the term for taking steps to administer an estate without the authority to do so). However, there were some things that James could do to protect Martin’s estate (which had quite a large value) in the meantime without overstepping. With our advice and help James made sure Martin’s unoccupied house was properly insured.
28 days later the Will Search result arrived from Certainty. It confirmed that even though Martin had asked James to be his executor, Martin had died without making a Will.
How is the estate divided if there is no Will?
This meant the Intestacy Rules would apply. James and his four siblings as first cousins would be entitled to share in Martin’s estate, each receiving a 1/5 share. Because there was no Will it then got a bit more complicated, as one of James’ siblings had died before Martin (predeceased), also leaving two children (first cousins once removed of Martin) – we explained that they would share (equally) in their late father’s 1/5 interest in the estate.
What happens if the estate is not shared correctly?
It is easy to incorrectly apply the Intestacy Rules, for example to treat first cousins once removed as second cousins, and there is always a possibility that a person doesn’t know their relations and family tree as well as they think they do. If an estate is incorrectly distributed, the person responsible (the ‘administrator’ or ‘executor’ or ‘personal representative’) will be liable to the disappointed beneficiaries.
So, to protect James from the risk of incorrectly distributing the estate, we asked a genealogist to verify the distribution of Martin’s estate was correct before James proceeded.
Who sorts things out when there is no Will?
James now had to consult all the beneficiaries. Luckily in this case the family wasn’t too large, and beneficiaries got on with each other and agreed. If the beneficiaries don’t agree then again things get more complicated and ‘complicated’ also means expensive. Martin’s family agreed that James knew him best and that James should act as the Personal Representative; with our legal advice and assistance, because James was taking on a lot of responsibility in that role and didn’t want to get it wrong.
What if there is inheritance tax to pay?
Martin’s estate was fairly substantial. There was going to be inheritance to pay. There were now Inheritance tax deadlines and obligations that fell on James, so he was relieved that we were helping him.
We obtained the correct valuations of all estate assets and liabilities to prepare the Inheritance Tax forms for James and arranged to pay the Inheritance Tax due before the 6-month deadline. Then we could apply for a Grant of Letters of Administration, so James had legal authority to cash/sell Martin’s assets.
We also arranged for Trustee Act Notices to be published to protect James from any unknown creditors.
What if there is a letter or expression of wishes but no valid Will?
A couple of months into proceedings James contacted us in something of a panic. While he was clearing Martin’s house, he had found a Letter of Wishes on Martin’s computer, along with some emails Martin had had with a local Solicitor about making a Will. In Martin’s last email to them he said he would prepare a list of his wishes and send it to them. James had in fact contacted this firm of Solicitors at the outset, and they had told him that they did not hold a Will for Martin. A letter of wishes is not the same as a legal Will. Martin had written down his wishes on his computer, but he had not made a Will. Not all Solicitors are the same, and we were puzzled about why they hadn’t shared this information with James when he made his enquiry as it would have helped us to understand why we had not found a Will for Martin!
We considered the Letter of Wishes carefully with James. It was not signed by Martin and there were no witnesses. The letter of wishes did not meet the requirements of s9 Wills Act 1837 and it could not even be loosely construed as a valid Will. Many families at this point would have thought ‘phew’ and continued with the process of taking the estate for themselves – but not all families are the same either…
How to change the Intestacy Rules
James said straightaway that he felt a moral obligation to explore the possibility of varying the distribution of Martin’s estate to change the way the Intestacy Rules worked. It was clear from the Letter of Wishes on the computer that distributing Martin’s estate in accordance with the Intestacy Rules was going to go against Martin’s wishes.
We discussed all the options available (including a lengthy and potentially expensive court application) and explained that a Deed of Variation would be the most straightforward way of dealing with this, BUT this would require agreement from ALL the beneficiaries entitled under the Intestacy Rules.
Martin’s Letter of Wishes said that his estate should pass to a combination of some family members and his favourite charities.
A proposal was therefore put to the Intestacy beneficiaries that Martin’s estate be distributed largely in accordance with his Letter of Wishes, so that all of Martin’s specific gifts/ legacies would be paid, and the residue of the estate would still be distributed between the family members as per the Intestacy Rules. This seemed to strike a fair balance between Martin’s wishes and the default legal position.
If all the beneficiaries agreed, a Deed of Variation on these terms would also result in an Inheritance Tax saving of approx. £95,000.
James had to remain strictly neutral about the outcome, as did we as his legal advisers. Although no disagreement or dispute was anticipated, we worked with a contentious probate specialist so that the initial correspondence with the Intestacy beneficiaries was drafted to best effect.
We were delighted for both Martin and James when we received agreement from all the Intestacy beneficiaries that they would like to vary the distribution of the estate to respect Martin’s wishes, and a Deed of Variation was later signed to make the agreement legal.
The charities were all then notified and received their legacies – receipts arrived with great thanks to the family and to us for enabling Martin’s wishes to be honoured, even though he hadn’t made a proper Will.
The Deed of Variation was accepted by HM Revenue & Customs and a refund of Inheritance Tax of just over £95,000 repaid to the estate.
Conclusion
So, all in all a positive outcome was achieved in this case which meant that;
– Martin’s wishes were honoured;
– His favourite charities received money from his estate;
– His family benefited from his estate;
– There was an inheritance tax saving of just over £95,000.
The moral of this story is that it is still better to take good legal advice and make a Will, because dying without a Will creates unnecessary complications and expense. In Martin’s case however, even though he hadn’t made a proper Will, we were still able to help his family to achieve the outcome that everyone thought Martin wanted. A good family received good legal advice and got a good result.
Please contact us for advice and assistance if you need to deal with an intestate estate and there is no Will.
Thank you to our clients who kindly agreed to an anonymised version of their case being shared.
