Dealing With Intestacy
When an individual dies, the first port of call is generally their will. This outlines their intentions with regard to the disbursement of their estate, and other arrangements such as their funeral or guardianship of children. In an alarmingly high number of cases, however, individuals pass away without having made a will. This is known as dying 'intestate'.
Dealing with intestacy can be a difficult, time-consuming process. In most cases it is advisable to seek the help of a solicitor who is experienced in such matters; it would be particularly helpful to find one who specialises in probate law. You will be able to find such solicitors by using the Law Society website.
Letter of AdministrationWhether or not you choose to use a solicitor, the intricacies of the process are the same. Rather than the disbursement of the estate occurring according to the will, it will take place under the direction of the laws of succession. In the first instance, you will need to work out who is legally entitled to take on the responsibility for dealing with the estate of the deceased individual. In most circumstances this will fall to the nearest relative; this is most likely to be a surviving spouse, followed in precedence by the children, and then by the parents of the deceased. Once the individual has been identified, they must apply for a Grant of Letters of Administration. This is a legal ratification of that individual's right to take control of the affairs of the estate, including the assets of the deceased. This is the equivalent of a Grant of Probate (which would be required by the executor of a will), and is required before a bank or other relevant institution will hand over control of the assets.
Inheritance TaxIt should also be noted that Inheritance Tax may be payable on the estate. If this is the case, a Grant of Letters of Administration will not be made until a proportion of any such tax has been paid. As a result, it is advisable to begin to make a valuation of the estate while your application is in progress.
The rules around who will inherit are strict. These are also covered in more detail in another article elsewhere on this site, but the basic principles are outlined here. In the first instance, if the estate is valued at less than £125,000 and the deceased was either married or in a civil partnership, then the entire estate falls to the surviving spouse or partner. If, on the other hand, the estate is worth more than this, the surviving spouse or partner will be entitled to a £125,000 tax free, as well as personal effects and a life interest in 50% of the remainder of the estate. The other 50% will fall, in order of precedence, to the children, followed by grandchildren, followed by parents, followed by brothers and sisters. If none of these relatives exist, then the entire estate will fall to the surviving spouse or partner.