Grandparents, should they be alive, would take priority over cousins. The practical reality is that grandparents are usually deceased in these situations. However, there are occasional exceptions and the application of the relevant law cannot simply be ignored. To clear this up:
Order of Entitlement under the Intestacy Rules
The intestacy rules are contained in the Administration of Estates Act 1925 (AEA 1925).
Property within an estate (or part of an estate) which has not been disposed of by a Will is held on what is called the 'statutory trusts for sale' and will pass according to the intestacy rules, which lay down a strict order of entitlement.
Section 33 AEA 1925 places a statutory trust for sale over all the property in respect of which the deceased died intestate. The estate is divided between the deceased's family under the rules set out in section 46 AEA 1925.
Section 46 Administration of Estate Act 1925 lists the categories of beneficiaries in order of priority. The general principle is that the estate is shared by the relatives in the highest category, excluding those in a lower category from benefiting.
If the deceased has no surviving spouse, the order of beneficial entitlement is:-
• issue on the statutory trusts, but if none, then to
• parents absolutely (and equally if both are alive), but if none, then to
• brothers and sisters of the whole blood (i.e. the children of the same parents as the deceased) on the statutory trusts, but if none, then to
• brothers and sisters of the half blood (i.e. those who share one parent with the deceased) or their descendants on the statutory trusts, but if none, then to
• grandparents absolutely and equally if more than one, but if none, then to
• uncles and aunts of the whole blood (i.e. brothers and sisters of the whole blood of one of the parents of the deceased) on the statutory trusts, but if none, then to
• uncles and aunts of the half blood (i.e. those with one parent in common with one of the parents of the deceased) on the statutory trusts, but if none, then to
• the Crown (as bona vacantia).
The wording of section 46 is such that each category must be considered in the order listed above and only if there is no one in a particular category is it necessary to consider the next category. Put another way, a surviving member of any of the above classes excludes all members of the lower classes.
Whenever issue take on intestacy they take their entitlement on the statutory trusts: section 46(1) AEA 1925. Statutory trusts are defined by section 47(1)(i) and operate on the principle of distribution of the estate among the issue per stirpes ('through the stems'). This means that the estate is distributed through the stems or branches of the family, each of which is entitled to an equal share. The number of branches is determined by the number of children that survived the intestate or who predeceased the intestate but left issue surviving him. It is accordingly necessary to consider the descendants of individuals in each category where the statutory trusts apply.