Chapter 1) Introduction

Question 1

What must be considered when determining how a deceased’s estate will pass?

Answer 1

1. Whether the deceased left a valid will
2. The nature of the assets owned by the deceased

Question 2

What is a ‘testator’?

Answer 2

A person who has left a valid will

Question 3

What does the term ‘succession estate’ refer to?

Answer 3

The collective assets capable of passing under a will or by intestacy

Question 4

What is meant by ‘testate’?

Answer 4

The deceased’s will covers their entire succession estate

Question 5

What is ‘partial intestacy’?

Answer 5

When the will does not cover the entire estate, leading to intestacy rules applying to remaining property

Question 6

What does it mean if a person dies ‘intestate’?

Answer 6

They died without making a valid will

Question 7

What are the intestacy rules found in?

Answer 7

The Administration of Estates Act 1925, amended by the Inheritance and Trustees’ Powers Act 2014

Question 8

What happens to assets not disposed of by a will in cases of partial intestacy?

Answer 8

The intestacy rules apply to any remaining property

Question 9

What is a donatio mortis causa (DMC)?

Answer 9

A gift made in contemplation of death with specific requirements

Question 10

What are the requirements for a valid DMC?

Answer 10

1. Made in contemplation of death
2. Conditional upon dying
3. Donor parts with property

Question 11

What happens to discretionary pension scheme benefits upon the deceased’s death?

Answer 11

They do not form part of the estate for distribution purposes

Question 12

How are insurance policy proceeds treated if written in trust?

Answer 12

They do not form part of the succession estate

Question 13

What is the difference between joint tenants and tenants in common?

Answer 13

Joint tenants pass property by survivorship; tenants in common have separate shares that pass into the succession estate

Question 14

What is the significance of a spouse surviving the deceased by 28 days under intestacy rules?

Answer 14

If not, the spouse has no entitlement under the intestacy rules

Question 15

What does the term ‘issue’ refer to in intestacy rules?

Answer 15

Children and remoter linear descendants, including legitimate, illegitimate, legitimated, and adopted children

Question 16

What does a spouse inherit if the intestate leaves no issue?

Answer 16

The entire succession estate absolutely

Question 17

What is the statutory legacy amount for a spouse under intestacy rules?

Answer 17

£322,000 free of tax and costs plus interest from the date of death

Question 18

What happens if an entitled beneficiary dies before the intestate?

Answer 18

Their own issue can inherit in their place, provided they satisfy the contingency limb

Question 19

What is the contingency limb in statutory trusts?

Answer 19

Each entitled beneficiary must survive the intestate and reach the age of 18 to inherit

Question 20

What happens to trust property upon a beneficiary’s death?

Answer 20

It usually does not form part of the succession estate and is distributed according to the trust deed

Question 21

What is an express trust?

Answer 21

A trust declared over property that specifies equitable and beneficial ownership

Question 22

What is an implied trust?

Answer 22

A trust that may arise even without an express declaration, often inferred from circumstances

Question 23

What is the role of personal representatives in the case of an intestate deceased?

Answer 23

They hold the undisposed of property on trust with power to sell under the Administration of Estates Act 1925

Question 24

What is the definition of ‘beneficial co-ownership’?

Answer 24

Ownership of property where two or more individuals hold benefits under the property

Question 25

What is the significance of statutory nominations?

Answer 25

Monies in the nominated accounts pass to the nominee rather than under the will or intestacy

Question 26

What is a 'life interest' in trust property?

Answer 26

A beneficial interest that does not form part of the succession estate and expires on the life tenant's death

Question 27

What is the effect of a power of appointment in a will regarding trust assets?

Answer 27

The deceased can determine the distribution of trust assets through their will

Question 28

What is the statutory order of entitlement set out in?

Answer 28

Section 46 of the Administration of Estates Act 1925

Question 29

What is the role of the death certificate in releasing benefits from discretionary pension schemes and insurance policies?

Answer 29

Benefits are released upon production of a death certificate

Question 30

What must each entitled beneficiary do to inherit under intestacy rules?

Answer 30

Survive the intestate and reach the age of 18.

Question 31

What type of interest does a beneficiary have if they are 18 or older when the intestate dies?

Answer 31

Vested interest.

Question 32

What is a contingent interest?

Answer 32

An interest that depends on a beneficiary reaching the age of 18.

Question 33

What happens if an entitled beneficiary dies before the intestate?

Answer 33

The beneficiary’s own issue can inherit in their place, provided they satisfy the contingency limb.

Question 34

In Example 1, who inherits A's entire estate?

Answer 34

B, the spouse.

Question 35

In Example 2, what is the status of B's interest in A's estate?

Answer 35

B's interest is vested because B is 18.

Question 36

What is the contingency status of B in Example 3?

Answer 36

Contingent upon reaching age 18.

Question 37

In Example 4, how much do B and C each inherit?

Answer 37

B and C share £250,000 each on the statutory trusts.

Question 38

What is the statutory legacy amount under intestacy rules?

Answer 38

£322,000.

Question 39

What is the process to calculate the residue in Example 5?

Answer 39

£530,000 (net estate) - £10,000 (personal chattels) - £322,000 (statutory legacy).

Question 40

In Example 6, who inherits C's share after C predeceases A?

Answer 40

D inherits C's share via the substitution limb.

Question 41

What is the order of entitlement if the intestate dies without a spouse or issue?

Answer 41

Parents, siblings of whole blood, siblings of half blood, grandparents, uncles/aunts of whole blood, uncles/aunts of half blood, the crown as bona vacantia.

Question 42

In Example 1 under the intestacy rules, who is entitled to the entire estate?

Answer 42

B, the mother.

Question 43

What happens if both parents survive the intestate?

Answer 43

The succession estate is divided equally.

Question 44

What is the statutory definition of 'personal chattels'?

Answer 44

Tangible movable property, excluding money, business property, and investment property.

Question 45

What can the surviving spouse do regarding the marital home?

Answer 45

Make an election to appropriate the home in satisfaction of their statutory entitlements.

Question 46

What must the surviving spouse do to appropriate the home?

Answer 46

Make an election in writing within 12 months of the grant.

Question 47

In the distribution of intestate assets, what is the first step?

Answer 47

Determine the surviving spouse's entitlement.

Question 48

If a deceased person is survived by a spouse and children, what is the spouse entitled to?

Answer 48

Personal chattels, a statutory legacy, and half of the residue.

Question 49

What happens to the remaining half of the residue if the deceased has children?

Answer 49

It is distributed to the children on the statutory trusts.

Question 50

What is the implication of a beneficiary having a vested interest?

Answer 50

The beneficiary's interest does not depend on reaching a certain age.

Question 51

True or False: The spouse has an automatic right to the deceased’s share of the marital home.

Answer 51

False.