Disaster on holiday
Whilst Eric and Jing were on a short holiday, Eric decided to go scuba-diving. Resurfacing from a dive, Eric lost consciousness and collapsed onto the deck of the boat. He never regained consciousness and was declared dead later that day.
Amongst Eric’s papers, Peter found an unsigned copy of the recent draft will as well as the earlier original signed will under which Eric left his entire estate to his two children in equal shares. Peter asked his father’s lawyer for confirmation that this meant he and Jane would share their father’s estate to the exclusion of Jing.
At a meeting requested by Eric’s lawyer, Peter was shocked to learn that, as his father’s signed will had been made before he had married Jing, it was automatically revoked by the marriage. Unless Eric had validly executed a will after his marriage to Jing, which was doubted, he would be treated as having died intestate.
Intestacy Rules (England & Wales)
The rules determining how an intestate’s estate is distributed were changed in 2014:
- Where the deceased is survived by his spouse or civil partner and children (which includes adopted and illegitimate children but not stepchildren) the estate is distributed as follows:
i) the spouse or civil partner receives all personal possessions;
ii) the spouse or civil partner receives £250,000 (or the whole estate if worth less than £250,000); and
iii) the rest of the residuary estate is split equally into two halves: the spouse or civil partner takes one half and the children the other half (held on statutory trusts where a child is under 18).
- Where the deceased is survived by his spouse or civil partner but no children, the spouse or civil partner receives everything.
- Where the deceased has no spouse or civil partner nor children, his surviving relatives inherit in the following order: parents, siblings, grandparents, uncles or aunts.
- Where the deceased has no surviving relatives, everything passes to the Crown.
Peter was disappointed to learn that not only was Jing automatically now the sole owner of his father’s home but in addition she was entitled to all of Eric’s personal possessions, to £250,000 and to half of all his other remaining assets, including EW Ltd.
Peter was further advised that Jing was entitled to be appointed as his father’s personal representative with sole authority to administer his father’s estate.
Jing meanwhile took her own independent legal advice. Although Eric would not have approved of the way his children have behaved towards her since his death, Jing knew he would not have wanted her to receive such a large share of his estate.
Jing was advised that she could vary the distribution of Eric’s estate by a deed of variation so that all or part of her entitlement passed instead to Peter and Jane. Entering into such a variation was at her discretion and, provided she did so within two years, any variation of her entitlement would be treated for tax purposes as if it had been made by Eric rather than Jing.
Jing decided that she would surrender all her right to Eric’s estate, other than their home which had passed to her automatically by survivorship, and redirect this to Peter and Jane in equal shares and, if Eric was right that they could not work together, that was their problem. She thought it would do them no harm to wait before she told them and flew off to Singapore whilst her lawyer prepared the necessary documents…
For part two of this article on succession planning and other issues for the Warrington family, click here.
For part one in this series, click here.
