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There is no such law in place.
The party is free to leave the medals to whoever he wishes, and who inherits the war medals therefore depends entirely on who the deceased has left the medals to in his Will.
If no Will is made, the strict Rules of Intestacy apply, which states that if a party dies without leaving a spouse, the children shall inherit an equal share in his Estate. If the medals can not therefore be divided equally, it is a case of the children trying to come to an agreement as to who should receive them.
I hope this assists and sets out the legal position.