Where no will is made or where circumstances create intestacy – practical consequences case studies

I have dealt with two intestacy cases recently, both of which have brought into sharp focus the reasons why people really should make Wills.

To recap, the intestacy rules determine which of your next of kin benefit from your estate if you do not leave a valid Will. The intestacy rules changed on 1st October 2014, but the cases referred to below concern estates where the intestate died under the previous intestacy rules. However, if the intestates in my cases had died after 1st October 2014, then the same problems would still have been encountered, problems which could have been avoided if properly drafted Wills had been put in place.

Case study 1 – no wife, no children

In the first case, the intestate (who I shall call Mr A) was a bachelor with no children. He was an only child and both of his parents and both sets of grandparents had died before him. The intestacy rules therefore provided that the estate was to be divided between his uncles and aunts on both the maternal and paternal sides (or their issue if any had predeceased).

I was initially consulted by one of Mr A’s first cousins, who informed me that Mr A had always been like a brother to her. She mentioned that she had cooked and cleaned for Mr A for many years and was really the only close relative who took an interest in him. Mr A’s cousin also informed me that Mr A had always led her to believe that he had made provision for his cousin in his Will. However, following Mr A’s passing and despite a thorough search of Mr A’s papers, no Will or any paperwork suggesting there might be a Will was found.

Mr A’s cousin explained that Mr A had had six uncles and aunts across the maternal and paternal sides of his family but all had died before Mr A and although she had some details of these uncles and aunts (and their issue), it was very sketchy and certainly could not be safely relied upon to calculate entitlement under the intestacy rules.

Case study 2 – incomplete will and change of circumstances create intestacy

In the second case, the intestate (who I shall call Mr B), was a widower with no children. He had, in fact, made a valid Will but the Will simply appointed Mr B’s late wife to be the sole executor and beneficiary and made no further provision as to whom his estate was to pass in the event that his wife were to die before him (which is what, in fact, happened). The intestacy rules therefore applied to Mr B’s estate.

In Mr B’s case, I was initially consulted by Mr B’s sister, who informed me that Mr B originally had eight brothers and sisters but that six had died before Mr B, all of whom had left children but some of whom had also died before Mr B. Mr B’s sister informed me that, following the passing of Mr B’s wife, Mr B had repeatedly stated that his estate would pass to Mr B’s sister and another relative and Mr B’s sister therefore repeatedly urged Mr B to make a Will so that his wishes would be effected but for one reason or another, Mr B did not make a Will. Fortunately, Mr B’s sister had a good idea of the extent of Mr B’s family and had contact details for most of the beneficiaries. However, as in the case of Mr A, the information held by Mr B’s sister could not be safely relied upon to calculate entitlement under the intestacy rules.

Who could apply to administer the estate?

In both cases, the person who initially consulted me in relation to the estate was one of the people entitled to administer the estate by virtue of them being a beneficiary under the intestacy rules. However, this is not always the case and so care needs to be taken at the outset, to ensure that the correct person is taking the necessary steps to administer the estate.

Once I was satisfied that I was taking instructions from the right person, I then advised both Mr A’s cousin and Mr B’s sister as to their responsibilities and obligations as personal representatives for the respective estates generally (which I will not go into detail here, suffice to say that I explained that they were responsible for identifying the nature and extent of the estate, collecting in same, settling the debts and liabilities of the estate (including all relevant taxes) and lastly, ensuring that the correct beneficiaries receive their rightful entitlements from the estates). It is this last point that became problematical in my two cases.

Complications associated with intestate situation

I had to explain to both of my clients that, whilst they both had useful information regarding the respective next of kin of Mr A and Mr B, it was still necessary to instruct a professional probate genealogy firm to prepare a report as to entitlements to Mr A and Mr B’s estates under the intestacy rules. I further recommended that missing beneficiary indemnity insurance be obtained, to protect my clients from personal liability to reimburse an overlooked beneficiary for their due entitlement were such a person to prove their claim to entitlement following the distribution of the estate. I explained that such indemnity insurance could only be obtained if a professional genealogy report had been obtained beforehand.

In advance of obtaining the professional genealogy reports and missing beneficiary indemnity insurance, I recommended undertaking missing Will searches using the service provided by Certainty (The National Will Database). This was to rule out the possibility of valid Wills being in existence. If valid Wills were showing to have been in existence and the distributions of the estates had nevertheless proceeded on the basis of intestacy, then again, my clients would be held personally liable for the misdistribution.

Practical consequences and costs where no will or no valid will

In summary, the effects of the fact that Mr A and Mr B did not leave valid Wills were as follows:–

• The persons that the intestates had intended to benefit from their respective estates did not benefit to the extent that the intestates had intended;
• Missing Will searches needed to be undertaken (costing approximately £100 each).
• Professional genealogists needed to be instructed to investigate entitlement to the estate and to produce a report capable of supporting an application for missing beneficiary indemnity insurance (costing approximately £3,750 plus VAT and disbursements each).
• Missing beneficiary indemnity insurance had to be obtained (costing approximately £7,000.00 each).
• In Mr A’s estate, 16 beneficiaries were identified and in Mr B’s estate, 20 beneficiaries were identified, all of whom had to be corresponded with and consulted, thus significantly adding to the costs of administering the estate.

Conclusion

If Mr A and Mr B had made valid Wills, they would have ensured that their respective estates passed to their chosen beneficiaries in the proportions that they wanted, and the costs of administering the respective estates correctly would have been significantly reduced.

The intestacy rules should never be relied upon to ensure that your estate passes to your chosen beneficiaries. Making a valid Will is therefore essential if you want to be sure of leaving your estate to your loved ones in the way in which you intend.

For advice on wills generally or estate administration, whether there is a will in place or not, or other concerns or complications with probate, get in touch. We have the expertise and experience to help.

Experts in wills, trusts, probate and power of attorney matters

Contact IBB Solicitors today for expert advice on lasting power of attorney. Please call us on 03456 381381 or email estatemanagement@ibblaw.co.uk.