Intestacy rules - Distribution under s46 Administration of Estates Act 1925

Learning Outcomes

After reading this article, you will be able to identify and apply the statutory rules for distributing an intestate estate under section 46 of the Administration of Estates Act 1925. You will understand the order of entitlement among relatives, the treatment of spouses and civil partners, the operation of statutory trusts for minors, and the practical implications for estate administration. This knowledge is essential for answering SQE1-style questions on intestacy.

SQE1 Syllabus

For SQE1, you are required to understand the operation of intestacy rules in England and Wales, particularly the statutory order of entitlement and the application of statutory trusts. In your revision, focus on:

  • The statutory hierarchy of beneficiaries under s46 Administration of Estates Act 1925 (AEA 1925)
  • The rights of surviving spouses and civil partners, including statutory legacy and personal chattels
  • The treatment of children, issue, and other relatives
  • The operation and effect of statutory trusts for minors
  • The exclusion of unmarried partners and cohabitants from entitlement
  • The practical application of these rules to estate administration scenarios

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

  1. Who inherits the estate if a person dies intestate leaving a spouse and two children?
  2. What is the statutory legacy, and who is entitled to it?
  3. If an intestate dies leaving no spouse, children, or parents, who is next in line to inherit?
  4. How are shares for minor beneficiaries managed under the intestacy rules?

Introduction

When a person dies without a valid will, their estate is distributed according to the statutory intestacy rules set out in section 46 of the Administration of Estates Act 1925 (AEA 1925). These rules provide a fixed order of entitlement among relatives and determine how assets are divided. Understanding the statutory hierarchy and the operation of statutory trusts is essential for advising clients and answering SQE1 questions on intestacy.

The Statutory Order of Entitlement

Section 46 AEA 1925 sets out a strict order in which relatives inherit an intestate estate. The rules apply to both total intestacy (no valid will at all) and partial intestacy (where a will fails to dispose of all assets).

Key Term: intestacy Intestacy occurs when a person dies without leaving a valid will, or when a will does not dispose of all their property.

The Hierarchy of Beneficiaries

The intestacy rules distribute the estate in the following order:

  1. Surviving spouse or civil partner
  2. Issue (children, grandchildren, etc.)
  3. Parents
  4. Brothers and sisters of the whole blood (and their issue)
  5. Brothers and sisters of the half blood (and their issue)
  6. Grandparents
  7. Uncles and aunts of the whole blood (and their issue)
  8. Uncles and aunts of the half blood (and their issue)
  9. The Crown (bona vacantia)

The estate is distributed to the first category in which a relative survives; more distant relatives are ignored if a closer category is satisfied.

Key Term: issue Issue means all direct lineal descendants of the deceased, including children, grandchildren, and so on.

Surviving Spouse or Civil Partner

The spouse or civil partner is the primary beneficiary under the rules. Their entitlement depends on whether the deceased left issue.

If there is no issue

  • The spouse or civil partner inherits the entire estate.

If there is issue

  • The spouse or civil partner receives:
    • All personal chattels
    • A fixed statutory legacy (currently £270,000 for deaths after 6 February 2020)
    • Half of the remaining estate (the residue)
  • The other half of the residue is shared equally among the issue on statutory trusts.

Key Term: personal chattels Tangible movable property of the deceased, except money, business assets, or items held solely as investments.

Children and Other Issue

If there is no surviving spouse or civil partner, the estate passes to the issue in equal shares. If a child has died before the intestate but left children of their own, those children inherit their parent’s share equally (per stirpes).

Other Relatives

If there is no spouse, civil partner, or issue, the estate passes to the next category in the hierarchy. Each class must be exhausted before moving to the next.

Key Term: statutory trusts Trusts imposed by law to hold the share of a minor or contingent beneficiary until they reach 18 or marry/civil partner before that age.

Statutory Trusts for Minors

Where a beneficiary entitled under the intestacy rules is under 18, their share is held on statutory trusts. The trustees (usually the personal representatives) manage and invest the share until the beneficiary reaches 18 or marries/enters a civil partnership before that age.

Key Term: trustees Persons appointed to hold and manage property on behalf of beneficiaries, with duties set by law or trust instrument.

Key Term: statutory legacy A fixed sum payable to the surviving spouse or civil partner where the deceased leaves issue, set by statutory instrument (currently £270,000).

Exclusion of Unmarried Partners and Cohabitants

The intestacy rules do not recognise unmarried partners or cohabitants. Only legal spouses or civil partners are entitled to inherit under s46 AEA 1925. Cohabitants must rely on other remedies, such as a claim under the Inheritance (Provision for Family and Dependants) Act 1975, if eligible.

Application of the Rules: Worked Examples

Worked Example 1.1

A dies intestate, survived by a spouse (B) and two children (C and D). The estate is worth £500,000.

Answer:

  • B receives all personal chattels, £270,000 statutory legacy, and half of the remaining £230,000 (£115,000).
  • C and D share the other £115,000 equally (£57,500 each), held on statutory trusts if they are under 18.

Worked Example 1.2

E dies intestate, unmarried, with no children. E’s parents are deceased, but E has a brother (F) and a niece (G, daughter of a predeceased sister).

Answer:

  • F inherits half the estate.
  • G (as issue of the predeceased sister) inherits the other half.

Worked Example 1.3

H dies intestate, survived by a long-term cohabitant (J) and a sister (K). H has no spouse, civil partner, or children.

Answer:

  • J is not entitled to inherit under the intestacy rules.
  • K inherits the entire estate.

Statutory Trusts: Trustee Duties

Trustees managing statutory trusts must:

  • Invest assets prudently (see Trustee Act 2000)
  • Apply income for the minor’s maintenance, education, or benefit
  • Transfer the capital to the beneficiary at 18 or on earlier marriage/civil partnership

Trustees may also advance capital for the beneficiary’s benefit under s32 Trustee Act 1925, subject to statutory limits.

Exam Warning

The intestacy rules do not provide for unmarried partners, stepchildren (unless adopted), or friends. Be alert to this in SQE1 questions—do not assume cohabitants or stepchildren are entitled unless formally adopted.

Revision Tip

For SQE1, memorise the statutory order of entitlement and the spouse/civil partner’s rights. Practice applying the rules to different family scenarios, especially where minors or partial intestacy are involved.

Summary

ScenarioSpouse/Civil PartnerIssue (Children, etc.)Other Relatives
Surviving spouse/civil partner, no issueAll estate——
Surviving spouse/civil partner and issueChattels, legacy, ½ residue½ residue (statutory trusts)—
No spouse/civil partner, issue survives—All estate—
No spouse/civil partner, no issue——Next class in order

Key Point Checklist

This article has covered the following key knowledge points:

  • The statutory order of entitlement under s46 AEA 1925 for intestate estates
  • The rights of surviving spouses and civil partners, including statutory legacy and chattels
  • The treatment of children, issue, and other relatives under the rules
  • The operation of statutory trusts for minors and the duties of trustees
  • The exclusion of unmarried partners and cohabitants from intestacy entitlement
  • The practical application of intestacy rules in common exam scenarios

Key Terms and Concepts

  • intestacy
  • issue
  • personal chattels
  • statutory trusts
  • trustees
  • statutory legacy
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