What property constitutes an individual’s estate for succession purposes?
Under the law of England and Wales, an individual’s estate for succession purposes comprises all property they own in their sole name. It also includes the deceased’s interest in any property owned jointly with others under a tenancy in common. With a tenancy in common, each co-owner has a fixed share in the property, succession to which is determined by their will or intestacy rules.
The estate also comprises assets over which the deceased had power to control their use and determine their destination, known as a general power of appointment, together with assets in the estate of an individual who predeceased them to which the deceased is entitled.
For these purposes, a deceased’s estate does not include jointly owned property held under a joint tenancy, in which the co-owners each own an indivisible share. In these circumstances, on the death of a co-owner, the rule of survivorship applies to vest their interest in the property in the other joint tenants.Disposition
To what extent do individuals have freedom of disposition over their estate during their lifetime?
Under the law of England and Wales, individuals have freedom of disposition over their entire estate during their lifetime. There is no marital property or forced heirship regime to place restrictions on an individual’s freedom of disposition.
In the event of a divorce, the dissolution of a civil partnership or a legal separation, the English court has wide discretion to order the distribution of assets between a couple to achieve fairness in accordance with the principles of need, contribution and sharing, which may effectively restrict an individual’s freedom to deal with their assets as they choose. In doing so, following case law in this area, the court will generally give effect to a valid marital property agreement entered into by parties to a marriage provided that, in all the circumstances, it is fair to do so. This is notwithstanding the fact that under the existing law of England and Wales marital property agreements are not contractually enforceable.
To what extent do individuals have freedom of disposition over their estate on death?
Under the law of England and Wales, individuals have complete freedom of disposition over their estate. There is no system of forced heirship, nor are there any provisions for clawback of lifetime gifts.
The rules relating to jointly owned property will affect an individual’s ability to dispose of such property.
Individuals with specified relationships to a deceased who died domiciled in England and Wales under common law may make a claim under the Inheritance (Provision for Family and Dependents) Act 1975 for financial provision or increased financial provision from their estate if they consider they have not been adequately provided for. However, this does not restrict the individual’s testamentary freedom.Intestacy
If an individual dies in your jurisdiction without leaving valid instructions for the disposition of the estate, to whom does the estate pass and in what shares?
The rules of succession on intestacy are set out in Part IV of the Administration of Estates Act 1925. In each case, minors inherit at the age of 18 and, until they reach that age, marry or enter into a civil partnership earlier, their share is held on statutory trusts under which the income is either used for their maintenance, education or benefit, or is accumulated.
Intestates leaving a surviving spouse or civil partner
Since 1 October 2014, if an individual dies leaving a surviving spouse or civil partner but no issue (broadly, children or grandchildren, etc), the entire residuary estate passes to the surviving spouse or civil partner.
If the same individual leaves issue, the surviving spouse or civil partner takes the deceased’s personal chattels, a fixed statutory sum of (currently) £270,000 plus interest from the date of death and half of the residuary estate of the deceased absolutely. The issue receives the other half of the estate on statutory trusts. The issue inherits on a per stirpital basis, a grandchild taking only if their parent has predeceased the intestate, for example.
If the same individual died before 1 October 2014, leaving a spouse or civil partner but no issue, and was survived by one or more of their parents, full siblings or issue of such siblings, the spouse or civil partner would have received the personal chattels, a fixed statutory sum of £450,000 and half of the residuary estate absolutely. The other half passed to the parents of the deceased absolutely or in equal shares if one or both survived. If the parents had died, the other half passed to the full siblings of the deceased.
Intestates leaving no surviving spouse or civil partner
If a deceased leaves children or other issue but no surviving spouse or civil partner, their issue take their residuary estate in equal shares at age 18.
If the same individual leaves no issue but is survived by one or both of their parents, the parents take the residuary estate either alone or in equal shares absolutely.
If the same individual leaves no issue or parent, their residuary estate passes to the following people in order of priority:
- full siblings and, if none, then;
- half siblings and, if none, then;
- grandparents and, if none, then;
- uncles and aunts (being full siblings of a parent of the deceased) and, if none, then;
- uncles and aunts (being half siblings of a parent of the deceased) and, if none, then;
- bona vacantia, to the Crown, the Duchy of Lancaster or the Duchy of Cornwall.
In relation to the disposition of an individual’s estate, are adopted or illegitimate children treated the same as natural legitimate children and, if not, how may they inherit?Adopted children
Adopted children are treated as the legitimate children of an adopter or adopters and of nobody else. Once they have been adopted, they do not have any rights of inheritance from the estate of their biological parents, other than any to which they became entitled prior to adoption. Before 1 October 2014, only interests to which the child had an unconditional entitlement (‘vested in possession’) would have been preserved. For adoptions made on or after 1 October 2014, an interest of a child in the estate of a deceased biological parent, which is a contingent interest other than one in remainder, will also be preserved. A contingency is a condition that must be fulfilled before the child has an absolute entitlement to the interest. For example, the interest may be contingent on the child attaining the age of 18 years. A contingent interest is in remainder and, therefore, not preserved by the rules introduced in 2014 if it is subject to the interest of another person. An example would be a gift in a will of a deceased’s estate to a person for life and then to the child at 18 years. The child’s interest is contingent on reaching 18 years but is in remainder to the above person’s life interest and, therefore, not preserved by the new rules.
As a testator has complete testamentary freedom over their estate, no child has a right to inherit from a parent; however, if a will provides for a legacy to children without expressly naming individuals, adopted children would be entitled to inherit in the same way as biological children.
No distinction is made between legitimate and illegitimate children. This rule applies to wills and trusts made on or after 4 April 1988 and to the intestacy rules where the intestate died on or after 4 April 1988.
The courts have generally been willing to approve variations that enlarge the class of beneficiaries to include adopted and illegitimate children. The High Court has recently held that trustees could appoint funds on a new trust that defined the class of beneficiaries as including illegitimate and adopted children where a trust was made before the present rules began to apply.Distribution
What law governs the distribution of an individual’s estate and does this depend on the type of property within it?
In England and Wales, generally succession will be governed by the law of an individual’s domicile in relation to movable property and the law of the situs of property in relation to immovable property. Where all factors point to England, English law will apply. Where there is a foreign element English conflicts of laws rules apply and these will incorporate the law of a foreign jurisdiction where an individual died domiciled in that foreign jurisdiction or they owned real estate in a foreign jurisdiction.Formalities
What formalities are required for an individual to make a valid will in your jurisdiction?
In England and Wales, a will must be made in writing and must be signed by the testator, testatrix or by some other person in their presence and by their direction. This signature must be made or acknowledged by the testator in the presence of two witnesses, who must be present at the same time. Each witness must either sign the will or attest their signature in the presence of the testator or testatrix, but not necessarily in the presence of another witness.
There is no requirement for a will to be dated unless it appoints guardians of a minor. However, if there is doubt regarding the date on which a will was executed, evidence may be required to establish it.
If a beneficiary under the will, or their spouse or civil partner, witnesses the will, the legacy to that beneficiary is void.
Formalities are relaxed for wills for servicepeople on active service. These may be written in a paybook or even made verbally.
The Law Commission issued a consultation on the reform of the law of wills in England and Wales in July 2017, which proposes regulations to permit electronic wills or electronically executed wills. This reform was paused at the request of the government but was in March 2021 confirmed as part of the Law Commission’s agenda for its next programme of reforms. Temporary legislation came into effect on 28 September 2020, permitting wills executed between 31 January 2020 and 31 January 2024 to be witnessed virtually, where it is not possible to do so in person. This rule was introduced in recognition of the difficulties presented by social distancing and other rules for executing wills during the covid-19 pandemic.
All or part of a will formally valid under English law may nevertheless become substantively invalid if, for example, it attempts to dispose of assets that the laws of another jurisdiction govern (eg, due to the existence of marital property or forced heirship regimes applicable due to the domicile of the deceased or the situs of immovable property).Foreign wills
Are foreign wills recognised in your jurisdiction and how is this achieved?
A will formally valid under the law of another country can be recognised in England and Wales, provided that the will is formally valid and complies with the law of a country in or of which the testator was domiciled, habitually resident or a national either at the time of the execution of the will or at the date of their death, or both.
A grant of probate or grant of representation will usually be required to administer property in England and Wales owned by a deceased person who died domiciled outside the jurisdiction. However, if the deceased was domiciled in a country to which the Colonial Probates Acts 1892 and 1927 apply, and a grant has been issued in that country, an application may be made for the grant to be resealed to administer the estate in England and Wales.Administration
Who has the right to administer an estate?
The personal representatives (PRs) of the deceased have the right to administer an estate in England and Wales. Where someone has left a valid will appointing PRs, they are called executors, and where the deceased died intestate or failed to appoint executors in his or her will, the PRs are appointed by the court and are called administrators. The court will also appoint administrators if validly appointed executors choose to renounce probate (ie, if they choose not to act as executors). The persons who are entitled to apply to be appointed as administrators depend on whether the deceased left a valid will but the will did not contain a valid appointment of executors, or whether the deceased died intestate. In the latter case, the entitlement to the grant under the applicable practice rule broadly follows the entitlement to benefit from the estate under the intestacy rules.
How does title to a deceased’s assets pass to the heirs and successors? What are the rules for administration of the estate?
Where the deceased left a valid will, their estate vests in the executors at the date of death. Where a deceased dies intestate, the estate vests in the public trustee until a grant of administration is made by the court, at which point the estate vests in the administrators.
The grant of probate or administration (together a grant of representation) enables the PRs to obtain title to the assets of the deceased and to distribute them to their heirs.Challenge
Is there a procedure for disappointed heirs and/or beneficiaries to make a claim against an estate?
Under the Inheritance (Provision for Family and Dependants) Act 1975 (Inheritance Act), the following categories of individuals can make a claim for reasonable financial provision from the estate of a deceased person if a will or the applicable intestacy rules do not do so:
- present or former spouses and civil partners (provided they have not entered into a subsequent marriage or civil partnership);
- cohabitees, whether same-sex or opposite-sex, who had lived with the deceased for two years prior to their death;
- a child of the deceased or anyone who was treated by the deceased as a child of a family in which the deceased stood in the role of parent; or
- any other person who was being maintained wholly or partly by the deceased immediately before their death.
Claims under the Inheritance Act can only be made if the deceased was domiciled in England and Wales under common law at the time of death. Such a claim can be made regardless of whether the deceased left a will and must be commenced within six months of the grant of representation being issued.
The measure of an award that the court may make depends on the claimant’s relationship to the deceased. Most claimants may only make a claim for provision that is reasonable in all circumstances of the case and is strictly limited to maintenance. Spousal claims are not so restricted.
Alternatively, a person with a potential interest in an estate can bring an action to challenge the validity of the will on the following grounds:
- it was not validly executed;
- the deceased lacked mental capacity at the time of its execution;
- the deceased did not know or approve its contents;
- in making it, the deceased was subject to undue influence; or
- it was forged or there was some other type of fraud involved.