13.3 Gifts in the will Flashcards
What is a specific legacy?
Specific legacy:
Gift of property forming part of the testator’s estate at death and distinguished in the will from other property of the same kind.
E.g. a house, a car
What is a general legacy?
General legacy:
Gift of property not distinguished in the will from other property of the same kind. ** Doctrine of ademption does not apply to general legacies.
E.g. “all of my possessions”, or £1000
What is a demonstrative legacy?
Demonstrative legacy:
General legacy payable out of a specific designated fund (such as a bank account).
What is a pecuniary legacy?
Pecuniary legacy:
Cash gift which may be specific, general or demonstrative
What is a residuary legacy?
Residuary legacy:
The residue of an estate is what is left after all debts, liabilities, legacies and other expenses have been paid.
Also, if a beneficiary for a non-residuary gift predeceases the testator, the gift will lapse (fail) and subject matter of gift falls into the residue.
Ensures that all the estate passes under a will rather than being partially intestate.
What are class gifts?
Class gifts
Testators often leave property to a class of beneficiaries, such as those who are in a particular relationship to the testator. Sometimes, the members of that class could change after the testator’s death.
The law assumes, unless the contrary is known, that the class closes on the testator’s death, where the gift is an immediate one.
What are the rules for gifts made to children under a will?
Gifts to children - A gift to someone’s ‘children’ includes illegitimate and adopted children but not stepchildren.
Minors cannot give valid receipt for a gift, so the gift is held on statutory trust by the executors or by the minor’s parents / guardian.
Best way to give a gift to a minor is to put it on trust for them and under a trust deed to allow them to inherit once they reach a certain age (e.g 25 years old)
When does a partial intestacy occur?
Partial intestacy occurs when a gift fails (e.g specific gift) and there is no residuary clause or the beneficiary of the residuary has died before the testator.
Effect of partial intestacy: Failed gift will have to pass via the intestacy rules
What is the ‘residuary clause’ exception to partial intestacy?
Exceptions to partial intestacy route:
1) Residuary clause
If there was a residuary clause and a beneficiary was entitled to the residuary, the failed gift would fall into the residuary and go to the person entitled to the residuary estate
What is the ‘s33 WA’ exception to partial intestacy?
Exceptions to partial intestacy route:
2) Gift rescued by s33 WA (issue takes per stirpes)
S33 WA: If the will gives a gift or the residue to the testator’s child, and that child dies before the testator, it goes to their child(ren) (and, if they have predeceased, their grandchildren) in equal shares - per stirpes.
S33 can be excluded by the will, but if it is not excluded, it will apply
What is the doctrine of ademption and when does it apply to gifts?
Doctrine of ademption for specific legacies
Ademption means that a specific gift will fail (or adeem) if:
- it is no longer part of the testator’s estate,
- is subject to a binding contract for sale or
- no longer meets the description in the will
A change in the substance in the subject matter of a specific gift causes that gift to adeem but a mere change in the name or form does not
What is the ‘substitutionary gift’ exception to partial intestacy?
Exceptions to partial intestacy route:
3) Substitutionary gift (‘gift over’)
There is no residuary but the will has dealt with how the gift will pass if it fails (e.g will might state if the gift does not pass to X, it is to pass to Y rather than falling into the residuary)
What is the exception to the doctrine of ademption?
Doctrine of ademption only applies to specific legacies.
For general or pecuniary, the executor has the power to “make up” the lost/sold asset - power of appropriation
What are the main reasons for failing gifts?
Reasons for failing gifts:
1) Will is not sufficiently clear on what the gift is (no subject) - link to Trusts
2) Will is not sufficiently clear on who the intended beneficiary is or what shares they should have (no object) - link to Trusts
3) Will is not sufficiently clear on intention (no intention) - link to Trusts
4) The beneficiary disclaims the gift because of its associated costs
5) Lapse - the beneficiary dies before the testator (but note s33 WA)
6) Ademption of specific legacies - at the time of death, the testator no longer owns the gift under the will
7) Gift changes in nature - applies to bank accounts that have changed
8) The beneficiary or a spouse / CP of the beneficiary witnesses the will. Gift falls into residue (unless the will is re-executed via a codicil with the beneficiary not witnessing it or there are 2 other witnesses)
9) Divorce - divorce also means the ex cannot act as executor
