A number of issues arise for both would-be beneficiaries and executors when someone dies without leaving a valid will. This short article highlights some of the problems faced by beneficiaries inheriting under the rules of intestacy and the potential solutions.

The rules of intestacy

In short, the rules of intestacy govern who inherits the deceased’s estate when no valid Will is left. Firstly, and perhaps most problematically, there is a lack of flexibility in administering the estate. No consideration is provided for the complexities of the deceased’s estate or their own personal circumstances. The lack of testamentary choice may create a further issue and result in claims under the Inheritance (Provision for Family and Dependants) Act.

Additionally, clients dying with larger estates may leave their beneficiaries with unforeseen Inheritance Tax (IHT) liabilities even if the deceased was married or in a civil partnership when they passed away!

What might be the solution for beneficiaries inheriting under the rules of intestacy?

There may be options available to beneficiaries to try and mitigate the above. The beneficiaries may wish to alter their inheritance under the rules of intestacy using a ‘Deed of Variation.’ In essence, the beneficiary of the deceased’s estate can either fully or partially alter their respective interest in the estate to another individual, charity, or trust, which can reduce any IHT due.

On the death of an intestate who was married or in a civil partnership when they passed away, the IHT payable by the children can be reduced by varying their interest to an immediate post-death interest (IPDI) trust.

CTT Group are always on hand to support your clients with estate planning options when they have inherited under the rules of intestacy.

Find out more about using Deeds of Variation at our next Superhero Webinar 99 or get in touch for support.