19.3 Intestacy and Property Passing Outside the Estate

Intestacy is not a consolation prize for an unfair will. It is a statutory scheme that applies when the deceased left no valid will, or left a will that does not dispose of some or all of the estate (a partial intestacy). The scheme is in Administration of Estates Act 1925 s.46, as rewritten by the Inheritance and Trustees' Powers Act 2014. It applies to the free estate: assets the deceased owned beneficially in their own name, or as a tenant in common, that were not already nominated, written in trust, or held with survivorship. Before you apply s.46, strip out property that passes outside the estate. This independent OpenExamPrep section covers that FLK2 topic.

When s.46 applies

Use s.46 where there is no valid will, the will is revoked, every gift has failed, or residue is undisposed of. On a partial intestacy, s.49 applies the intestacy rules to the undisposed property, with modifications so that a spouse who has already taken under the will is not double-counted in a crude way. Always identify the date of death: the statutory legacy, the 28-day spouse rule, and the 2014 rewrite all turn on that date.

A surviving spouse or civil partner must survive the intestate by 28 days (s.46(2A)). If they die on day 10, they are treated as not having survived. The estate is then distributed as if there were no surviving spouse. That is a specific intestacy rule. Do not confuse it with the general commorientes rule in Law of Property Act 1925 s.184 (the older is deemed to have died first where the order of death is uncertain).

Personal chattels go to a surviving spouse or civil partner in the issue cases below. Since the 2014 Act, s.55(1)(x) defines them as tangible movable property, excluding money and securities, property used solely or mainly for business, and property held solely as an investment. A family car used privately is a chattel. A taxi used in a trade is not. A bought-in art collection held only as an investment may be excluded. When in doubt, classify asset by asset.

The s.46 ladder

If there is a spouse or civil partner who survives 28 days, and there is issue:

• personal chattels absolutely to the spouse or civil partner;
• the statutory legacy (the "fixed net sum") to the spouse or civil partner, plus interest from death;
• one half of the remaining residue to the spouse or civil partner absolutely;
• the other half of the remaining residue to the issue on the statutory trusts.

If there is a spouse or civil partner who survives 28 days, and there is no issue: the spouse or civil partner takes the whole estate. Parents and siblings no longer share. That was the 2014 change. Do not advise a 2026 intestacy using the old "spouse plus parents" model.

If there is no spouse or civil partner (including a spouse who failed the 28-day rule), s.46 uses this order. The first class that exists takes, and you stop:

1. issue on the statutory trusts;
2. parents absolutely (equally if both are alive);
3. brothers and sisters of the whole blood on the statutory trusts (their issue taking if they have predeceased);
4. brothers and sisters of the half blood on the statutory trusts;
5. grandparents equally;
6. uncles and aunts of the whole blood (siblings of the deceased's parents of the whole blood) on the statutory trusts;
7. uncles and aunts of the half blood on the statutory trusts;
8. bona vacantia to the Crown, or to the Duchy of Lancaster or the Duke of Cornwall in their territories.

Cousins take, where they take at all, as issue of uncles and aunts under those statutory trusts. There is no "next of kin" mop-up beyond that list.

Who takes nothing under s.46: an unmarried cohabitant (however long the relationship), a fiancé(e), an unadopted stepchild, a mother-in-law, a friend, and a carer. Adoption makes the child the child of the adopters (Adoption and Children Act 2002). The old distinction between legitimate and illegitimate children does not apply (Family Law Reform Act 1987). Disappointed cohabitants and some others may have a separate claim under the Inheritance (Provision for Family and Dependants) Act 1975; that is a family-provision claim, not an intestacy share.

The statutory legacy: use the prescribed figure for the date of death

The fixed net sum is set under Schedule 1A to the 1925 Act. It is reviewed by statutory instrument. Do not memorise a figure from an old textbook and apply it to every death.

For deaths on or after 26 July 2023, the prescribed sum is £322,000. That is the figure in the Administration of Estates Act 1925 (Fixed Net Sum) Order 2023, and it is the figure recorded in HMRC's Inheritance Tax Manual at IHTM12122 (HMRC's table of statutory legacy rates, updated into 2026). Earlier deaths used earlier sums (including £270,000 from 6 February 2020 to 25 July 2023, and £250,000 from 1 October 2014 to 5 February 2020). On a live file, confirm the instrument in force for that death. Interest on the legacy runs from death; under Schedule 1A the rate is the Bank of England rate having effect at the end of the day of death.

If the estate after chattels is worth £322,000 or less, the spouse or civil partner takes that remainder as well, and issue take nothing under s.46 (they may still have a 1975 Act claim on the right facts).

Worked example A. Jordan dies intestate on 1 March 2026. Net estate £800,000, of which personal chattels are £20,000. He leaves a wife who survives 28 days and two adult children.

• Wife takes chattels £20,000.
• Remaining £780,000: wife takes the statutory legacy of £322,000.
• Remaining residue £458,000: wife takes half (£229,000) absolutely; the two children share the other half (£229,000) on statutory trusts (already contingently vested, because they are adults).
• Wife's total: £20,000 + £322,000 + £229,000 = £571,000. Children's total: £229,000.

Worked example B. Same family, net estate £280,000 including chattels of £10,000. Wife takes the chattels and the remaining £270,000. That is less than the prescribed statutory legacy, so she takes everything. The children take nothing under s.46.

Worked example C. Jordan never married. He lived with a partner for 20 years and has one adult child. The partner takes nothing under s.46. The child takes the whole estate on the statutory trusts. Advise the partner about a possible 1975 Act claim, not about an intestacy share they do not have.

Statutory trusts (s.47)

Where s.46 says property is held "on the statutory trusts" for issue (or for siblings, or for uncles and aunts), s.47 supplies the terms. For issue:

• the class is the intestate's children living at the death, plus issue of a predeceased child;
• a child's own share is contingent on attaining 18 or marrying or forming a civil partnership under that age;
• if a child of the intestate has already died leaving issue, those issue take per stirpes the share the child would have taken, themselves subject to the same contingencies;
• a child en ventre sa mere at the death can take;
• a child who fails to attain 18 (and does not marry or form a civil partnership under that age) drops out, and their issue may take by substitution.

The old hotchpot rules that brought lifetime advances into account were stripped out by the 2014 Act. Do not reduce a child's intestacy share because the parent paid their university fees.

Income may be used for maintenance while a share is contingent. Capital advances need the statutory or court power in play on the file. If you are the administrator, you are a trustee of those contingent shares.

Joint property

A beneficial joint tenancy passes by survivorship. It does not pass under the will and it does not pass under s.46. The survivor takes, even if the will says "I leave my half of the house to my children". There was no half in the free estate.

A tenancy in common is different. The deceased's undivided share is in the estate and does pass by will or intestacy. On a joint legal title, always check the restriction, any severance notice, and the beneficial ownership evidence. A Form A restriction is the land-registry flag for a tenancy in common.

Joint bank accounts need facts. Some are true joint beneficial accounts with survivorship. Some are convenience accounts where the money was still the deceased's, so the balance is in the estate (a resulting-trust analysis on the evidence). Do not assume every joint account is outside the estate.

Life policies

Ask who the policy is payable to.

• Payable to the estate (or to "executors or administrators"): the proceeds are an estate asset and pass by will or intestacy.
• Written in trust, including a policy under Married Women's Property Act 1882 s.11 for a spouse, civil partner, or children: proceeds pass to the trustees for those beneficiaries and outside the estate for succession purposes.
• Assigned to a lender or to another person: follow the assignment.

A client who says "my life insurance will look after the children" may be wrong if the policy is still payable to the estate and the intestacy (or an outdated will) sends the estate somewhere else. Check the schedule, the trust wording, and the last assignment.

Pension scheme benefits

Occupational and personal pension lump-sum death benefits are commonly paid at the trustees' or scheme administrator's discretion. An expression of wish or nomination guides them; it is usually not binding and it is not a will. Those discretionary benefits typically do not form part of the estate for succession (and often fall outside the estate for inheritance tax, which is a separate analysis).

Some older schemes, and some contract-based products, have a binding nomination or pay to the estate. Defined-benefit survivor pensions for a spouse may sit on the scheme rules, not on s.46. Drawdown funds remaining at death depend on the product: many still sit under a discretionary or nominated payment, not under the will.

Advise clearly: making or updating a will does not, by itself, dispose of discretionary pension death benefits. The client must keep expressions of wish up to date, especially after divorce, because a former spouse may still be named on a dusty nomination form.

Trust property

Property the deceased held as trustee is not in their beneficial estate. Property in which they were only a life tenant does not pass as their free estate; the capital follows the trust instrument (to remaindermen). What is in the estate is a beneficial interest they owned absolutely, including a remainder or reversion they held, and a tenancy-in-common share under a trust of land.

Do not put the family home into the intestacy working if the deceased was a joint tenant of the beneficial interest. Do put in a 50% tenancy-in-common share. Do not put in a discretionary pension lump sum. Do put in a life policy payable to executors.

Exam traps. Cohabitants have no s.46 share. The 28-day rule is for spouses and civil partners on intestacy, not a hidden term of every will. Joint tenancy is survivorship, not a gift in the will. The statutory legacy is a prescribed figure: for deaths from 26 July 2023 it is £322,000, and you still check the current instrument. Statutory trusts for issue are contingent on 18 or earlier marriage or civil partnership. Discretionary pension death benefits are usually outside the estate even if the will tries to give them away.