My brother recently passed away and did not leave a will. He has two grown-up children from a previous marriage but the relationship between them had broken down and they had not had any contact for over 25 years. He left £400,000 in savings in a bank account and he also owned a flat where he lived alone. As contact with his next of kin has been severed, how will his assets be divided and who will be deemed beneficiaries to his estate and assets?
Andrew Cameron, a private client lawyer at Charles Russell, says that as unfair as it may seem, your brother’s personal relationship with his children, or lack of it, has no bearing on how his assets are divided up on his death.
Your brother died “intestate” – legal terminology for dying without having made a valid will. His assets will therefore be divided up under the “intestacy rules”, a set of rules which determine who will inherit the property of a person dying without a will, and the amounts they will receive.
Broadly speaking, the intestacy rules dictate that those with the closest family connection to the deceased, for example a spouse or children, take priority to, and often to the exclusion of, those with a more distant family connection.
The rules are applied strictly and no consideration is given to the nature of the personal relationship that existed between the deceased and the individuals who stand to benefit under the intestacy rules – or those who will miss out.
Unfortunately, it is not uncommon for someone with a close personal relationship to the deceased, an unmarried partner for example, to lose out to someone with a family connection but no personal relationship at all.
It seems from your question that your brother wasn’t married at the time of his death. Under the intestacy rules, his assets will therefore be divided equally between his children, despite the long years of no communication between them.
Before your brother’s assets can be distributed, somebody must apply to the court to take charge of the practicalities of accessing his bank accounts, paying any outstanding debts and tax, dealing with his flat and generally administering his estate.
A different set of legal rules regulate who can be appointed, but broadly they mirror the order of priority in the intestacy rules. It is therefore most likely that one or more of your brother’s children will take on the role of “administrator”, since they are entitled to the estate.
It’s easy to see how the intestacy rules can lead to an unfair or unjust distribution of an estate. When this happens, there are two main options open to somebody who believes they should have received a share of the deceased’s assets – and didn’t.
First, a beneficiary under the intestacy rules may be reluctant or unwilling to accept an unexpected benefit from the deceased’s estate and might be content for someone who was closer to the deceased to benefit instead. It has to be said that this is not particularly common.
An altruistic beneficiary in that position cannot waive their entitlement under the intestacy rules but they can, if they wish, give all or part of it away without the usual tax disadvantages of making a lifetime gift. If you have been left feeling disinherited you might begin by writing to your brother’s children to explain why you hoped or expected to benefit from your brother’s death. You might also mention if there is a specific item, a family heirloom say, that you want or had hoped your brother would pass on to you.
Alternatively, certain categories of person prescribed by law – including a spouse or civil partner, cohabiting boyfriend or girlfriend or person being maintained by the deceased at the time of his death – can apply to a court for a share of the deceased’s assets on the grounds that they were not reasonably provided for by the operation of the intestacy rules.
Siblings are not expressly included, but could still qualify if they were being financially supported by the deceased at the time of his death. This is a more difficult approach to take and will, inevitably, require specialist legal advice.
The only way to guarantee that your assets go to your intended beneficiaries on your death is to make a will during your lifetime. Regrettably, this advice comes too late for your brother.
This advice is specific to the facts in the questions posed. Neither the FT nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies
Get alerts on Tax when a new story is published