A person who dies without making a Will or without making a valid Will, dies intestate. The property belonging to such a person is inherited according to a strict set of rules commonly known as the intestacy rules. Instead of the property going to the testator's chosen beneficiaries, it is left to other relatives in a particular order.
If a person dies without leaving a valid Will, they are said to die intestate. This occurs when the deceased never made a Will at all, cancelled their Will and did not make a new Will or because the Will that was made is invalid. Approximately two out of every three people who die in England and Wales die intestate.
A person dies partially intestate if they leave a valid Will, but the Will fails to dispose of all the assets.
If, as is usual, the Will contains a valid residuary gift, a partial intestacy is avoided. A residual gift is one which ensures that all the property which has not been specifically dealt with in the Will (the residue) passes to chosen beneficiaries nominated by the person making the Will (the testator).
The effect of the intestacy rules is that they impose a trust over all the property in respect of which a person dies having provided for them in their Will.
This trust imposes duties and gives certain powers to the PRs (personal representatives, those appointed to manage the estate when someone dies intestate). The PRs must pay the funeral and administration expenses and any debts of the deceased. The balance remaining (after setting aside a fund to meet any cash gift left by the deceased in the Will) is the residuary estate to be shared amongst the family under the rules of distribution.
The PRs have the power to use assets towards satisfaction of a beneficiary's share with the beneficiary's consent. Personal assets must not be sold without special reason. In other words, where money is required to pay debts or expenses and there is a shortage of funds in the estate, the PRs would be entitled to sell personal assets.
The right of a person to benefit on intestacy depends on their relationship with the deceased and whether any closer relatives have survived. The general principle is that the estate is shared by the relatives in the highest category, to the exclusion of relatives in a later category but it is more complicated if there is a surviving spouse.
The spouse has priority over all other categories of beneficiaries, but may have to share the residuary estate with other beneficiaries. If the person who dies intestate has no surviving spouse or civil partner, their estate passes to the following in order: