Bona Vacantia – What Happens When An Estate Is Unclaimed?
Many people find themselves facing their highest marginal tax rate after they have died, with Inheritance Tax at 40% for any amount over the £325,000 nil rate band, or up to £500,000 if you include the Residence Nil Rate Band and you have children. There are ways to reduce your liability by working with a solicitor or will writer to design your will in the most efficient way.
However, estimates suggest that more than half of UK adults don’t have a will, increasing the likelihood they will die intestate. When this happens, it is the State that decides who gets what from your worldly goods, and there is no guarantee they would go to who you want to have them.
What are the intestacy rules?
The intestacy rules dictate who gets what from someone’s estate if they die without a will. People often think of a will being important to ensure the right person gets their belongings when they die. But it is equally important to ensure the wrong person doesn’t get your belongings by virtue of being a blood relative, if you have someone close that you would want to disinherit.
Under intestacy, if the person who died was married or in a civil partnership and they had no children, then the spouse or civil partner will receive the entire estate, once any IHT liability has been accounted for. If they did have children, then the spouse or civil partner would inherit all property and possessions, the first £325,000 of the estate, and half of anything that remains. Any children will inherit what remains, although this doesn’t apply automatically to stepchildren, and the remainder will be split equally between all other children.
If there is no spouse or civil partner, then the estate will be divided equally among all children including adopted children. If there are no children, then surviving parents will inherit, if there are no surviving parents, then it will go to full siblings. If full siblings have died, then their children will inherit ahead of any half siblings.
If the person who died has no surviving parents, children, siblings or half siblings, then any surviving grandparents will inherit. Without living grandparents, whole aunts or uncles will inherit, or their children if they have already died. When there are no surviving family members, the estate passes to the Crown, and is known as ‘Bona Vacantia’.
Where can I find out about unclaimed estates?
The Government publishes lists of unclaimed estates online, so if you think you may be entitled to an inheritance as the only living relative of someone whose estate is Bona Vacantia, then you have the right to notify the Government and make a claim. First, you would need to check that you are the right person in the order of intestacy rules to make a claim. Then you can apply for a share of the estate.
Some genealogy companies will scan the unclaimed estates lists and then work towards finding claimants, who will then pay them a proportion of their inheritance in return. But you don’t need to use one of these companies to make a claim on an estate you think you are entitled to. You can go to the relevant page on Gov.uk and begin the process yourself for free.
Remember, someone doesn’t only have to die without a will to be intestate, they can have a will that is invalidated for some reason, such as they created it under duress or while they weren’t of sound mind. So, when you make your will, ensure you use a good solicitor or will writer who will do everything you need to do legally to make your will watertight. This will also help to prevent any family squabbles once you’re gone.
We can help you meet your obligations
The sooner you write your will, the sooner your estate will be protected – after all, none of us knows when we will leave this mortal coil. You will need to know the value of all your assets, especially if you have a company. So, please ask us for advice and we can explain everything you need to know.
