Most people who die nowadays leave a will, dictating what happens to their possessions when they die. It’s a simple matter to draw up a final testament nowadays, what with all the free templates available on the internet. All should go well if they follow the procedure correctly. But what happens to the investments, properties and personal chattels in intestate estates, if they get it wrong?
Definitions to Keep Us On the Same Page
We’ll start with a few definitions to make sure we are speaking the same language:
- If the deceased person left a will that is legal and correct, then they left a ‘testate’ estate.
- This means they appointed an executor, named their beneficiary(s), and explained their wishes clearly.
- However if any of the above are not true, then the will is not valid and they left an ‘intestate’ estate.
The above ‘rules’ decide what happens to a deceased person’s possessions when they pass away. Nothing escapes the net. The following principles applies to investments, properties and personal chattels in intestate estates, regardless of what we may wish otherwise.
Chattels Versus Investments in Deceased Estates
- A chattel is a movable physical possession, that the owner could move around if they wished to.
- This distinguishes chattels from investments which are virtual, and immovable land and property.
With those definitions behind us, we can move on to our topic of chattels where there is no valid will.
Will Anybody Appreciate Our Chattels (Avery Associates)
Personal Chattels In Intestate Estates
If a person dies without leaving a valid, legally-correct will, then the law takes over and dictates what happens to their possessions. First, the Probate Registry of the UK High Court declares them an intestate person, upon application by someone with an interest in the estate.
The Probate Registry then appoints a third party – which may be the applicant – to distribute the estate according to the laws of succession. These legal principles dictate what happens next to the assets of the deceased estate:
- If the deceased person was married or in a civil partnership at the time of their death, then their partner is first in line to inherit.
- This includes if the partners had separated, but were still legally an item. However, it excludes the partner if the relationship legally ended.
- However, any children are entitled to equal shares to half the value of the intestate estate, above the first £322,000.
- A child includes one adopted by the deceased. Children / adopted children from previous relationships also qualify.
Distributing the Assets in Intestate Estates
This step sounds simple, except the surviving partner, and the natural and adopted children, must must receive their pro-rated entitlements:
- If there is fixed property, this often makes up most of the value of an estate. If is is worth less than £322,000, it goes to the surviving partner.
- If the property is worth more than £322,000, and there are children, then those heirs share half the balance.
- If they can’t agree, then the estate administrator may have to sell the fixed property out of hand, and share the proceeds equitably.
- The same applies to the deceased’s investments. These must be cashed-in, and the proceeds shared between the heirs.
Sharing Personal Chattels In Intestate Estates
This just leaves the movable personal chattels to resolve, and here the administrator often has to rely on their negotiating skills. That’s because the chattels may include items of significant value, and heirlooms that encapsulate family history, as well as items of low or no real value.
These Items Are Clearly Chattels (Avery Associates)
The administrator’s problem may begin when close family members start helping themselves to the deceased’s possessions. It can happen that the deceased was the last surviving partner in the relationship, and that the children start quarreling over their more valuable chattels.
Therefore, the administrator’s first task may be to explain to the heirs that personal chattels in intestate estates are part of the estate, and must be distributed legally. After all, they do have to determine the value of the estate first, and settle any inheritance tax that may be due.
How Accurate Must This Valuation Be?
Any assets that are of significant value must be assessed correctly, in order to close out on inheritance tax legally. In this regard an administrator (or executor) may be personally liable, if they fail to follow the process correctly. Although it may be sufficient to apply an approximate globular value to furniture and clothes.
However, the catch may lie in collectible items that the administrator and heirs may not recognize as such. Fashions come and go, and can surprise the uninitiated. Some say there is hardly an English home that that does not have something a collector will pay good money for.
That may be somewhere over the top in terms of Avery Associates’ extensive experience. We have, however, discovered many remarkable items that we recognized instantly, thanks to our thirty years experience. Please do reach out to us if you think we could assist. We’ll be delighted to chat.
More Information
Selling Chattels Without Grant of Probate
Chattels and Capital Gains – An Update
I cannot thank Mr Avery enough, the valuation was prompt, accurate and excepted easily by HMRC. I would thoroughly recommend this company if you are in need of inheritance tax valuations of house contents. (Jamie)
