Chapter 3: Drafting and Interpretation Flashcards
Will-Drafting: Non-Dispositive Clauses
Professionally drafted wills tend to follow a similar structure and style. Precedents from practitioner texts or a firm’s precedent bank are used to create the basic structure of the will.
When preparing a will the wording should be clear, concise and unambiguous. Colloquial and technical language (unless needed for precision) should be avoided.
Wills are traditionally drafted without punctuation.
It is common to capitalise the words which explain the purpose of the clause: e.g. I GIVE; I APPOINT.
Overview
Numbered paragraphs and the use of sub-clauses make it easier to read and cross reference.
Precedents are an aid to drafting and may not reflect what is required without amendment.
The basic overview of a standard will is shown below. This element will explain the effect of each of the clauses shown in bold. Key drafting aspects are also considered.
Overview
Commencement
Revocation
Burial / Funeral wishes
Appointment of executors & trustees
Appointment of guardians
Specific gifts
General gifts
Pecuniary gifts
Residuary gift
Administrative clauses
Date & Attestation
Introductory clauses
Commencement
I TOM JAMES JONES sometimes known as JAMES JONES of [ ] a solicitor declare this to be my last will and testament
Purpose is to identify the testator (stating their full name and address). The testator’s occupation is sometimes also added.
If the testator is known by another name that should be referred to (see example above).
If the testator owns assets in another name the grant of representation must refer to each possible alias. If it does not, it will not be possible to administer all of the estate and this causes delays.
The date can be included in the commencement or at the end of the will.
Revocation
I hereby REVOKE all former wills and testamentary dispositions and declare this to be my last will
A revocation clause can be included as part of the commencement or as a separate clause.
It ensures that all previous wills/codicils (both are testamentary documents) are revoked so only one valid will exists at any one time.
A will is valid without a revocation clause but one should be included as a matter of good drafting to avoid uncertainty.
Revocation
If a testator has more than one valid will the later will impliedly revokes the earlier will but only to the extent that it is inconsistent with or merely repeats the terms of the earlier will.
There are other methods of revoking a will either in whole or in part. For example by way of codicil, in the event of a testator’s marriage/divorce, or civil partnership or its dissolution, destruction of the will, or making effective manuscript amendments. However, the most common form of revocation is express revocation by way of a later will.
Burial and Funeral Wishes
I WISH for any part or parts of my body where possible to be used for transplantation and for the treatment of others but subject to this I request that all burial and funeral arrangements conform with Bahá’í law and tradition
Many testators want to direct what should happen to their body after their death and have specific funeral and burial instructions they would like followed. These clauses are usually inserted at the start of the will before the operative provisions.
The instructions are not legally binding on the personal representative (‘PRs’) but will normally be followed where possible.
Appointment of Executors
The role of the personal representative
The role of a personal representative (‘PR’) is to collect in the deceased’s assets and administer the estate (s.25 Administration of Estates Act 1925); they must pay the deceased’s debts, administration costs and expenses and distribute assets to the correct beneficiaries.
A PR appointed by will is referred to as an executor and their power to act derives from the will.
If a will does not appoint an executor who can act the Non Contentious Probate Rules determine who acts as PR. A PR appointed by the NCPR is an administrator.
This element considers the appointment of an executor by will.
Appointment of executors
Free to choose
A testator is free to choose their executor. However, a minor or someone who lacks mental capacity cannot act. An executor who is bankrupt can act but may be unable to perform all PR functions and is therefore an unwise choice.
A minimum of 1 executor is required, but it is often better to appoint at least two in case a sole executor does not survive the deceased or is unwilling/unable to act. A maximum of 4 can apply for the grant of representation. If more than 4 are named in the will then power is ‘reserved’ to those who do not apply initially to apply later if any vacancy arises.
Surviving spouse or close family member
It is common for a surviving spouse or close family member to be named. The role can be complex and it is often an onerous responsibility, especially if the executor will be grieving the death of their close relative. The testator should obtain consent from the executor in advance.
Unless stated otherwise the appointment of a spouse/civil partner becomes ineffective if the testator later divorces/dissolves their civil partnership (s18A / C Wills Act 1837).
Appointment of executors
In most cases the scope of an executor’s appointment is absolute and unrestricted. However, qualified appointments are possible. An executor’s role may be qualified by time (e.g. to take effect only for a fixed period or if they survive the testator by a certain period), location of the assets (e.g. only UK assets) or type of assets (e.g. only business assets).
Where a qualified appointment is made the drafter must ensure all of the estate will be administered and no assets passing under the will are left without an executor appointed to deal with them.
Where the executor’s appointment is qualified the grant of representation issued in their name will be similarly limited.
Appointment of executors
In most cases there will be no doubt about who is appointed but an appointment may be void if it is not clear that someone has been appointed to that role, or there is ambiguity about who is supposed to fulfil the role.
Appointment of executors and trustees
I APPOINT [ ] and [ ] (hereinafter called “my Trustees”) jointly to be the executors and trustees of my will but if either of them shall be unable or unwilling to act I appoint [ ] to fill any vacancy thereby arising
If a trust does or could arise following the testator’s death, e.g. an express trust is created or there are minor beneficiaries, at least two trustees should act (or a trust corporation).
Appointment of executors
It is common, but not necessary, to appoint the same person(s) in capacity as both executor and trustee. A defined term of either “Executors” or “Trustees” can be used throughout the rest of the will. Trustees is more common.
The above example appoints two executors to act jointly, in the role of both executor and trustee, and names a third executor to act if either of the two appointed do not act.
A family member will often be appointed along with a legal professional. A professional executor can provide experience, expertise and a neutral perspective that family members cannot offer.
Appointment of law firm partnership
I appoint the partners (which term includes directors or members) at the time of my death in the firm of [ ] or the firm which at that date has succeeded to and carries on its practice including a firm which has been incorporated or formed an LLP ……………..to be the executors and trustees of this my will and express the wish that no more than two of them shall prove my will and act initially in its trusts but that [ ] if then a partner should be one of them
A partnership does not have a separate legal identity distinct from its partners so cannot be appointed. Instead, all of the partners (construed as profit sharing) at the date of death are appointed (‘a’ or ‘any one’ partner is void for uncertainty).
The number who should act can be limited by stating only ‘one/two’ should act. A testator can express a preference for a specific partner but should avoid a personal appointment (that person may no longer practice or work at the firm).
The example above considers that the firm in the future may change its name, merge with another, convert to an LLP or incorporate.
Appointment of LLP / trust corporation
Many law films have LLP status. An LLP has legal capacity to apply for a grant of representation and may be appointed as an executor (see above).
I APPOINT my spouse and [ ] LLP of [ ] jointly to be the executors and trustees of this my will (hereinafter called my Trustees)
A trust corporation is a specific type of corporation with authority to carry out trustee and PR roles. Law firms, banks and financial institutions may have established their own trust corporation and this will have separate legal personality from the limited company or LLP that owns or runs it. A trust corporation may be appointed as executor.
I APPOINT [NAME OF TRUST CORPORATION] to be the only executor and trustee of this my will (hereinafter called my Trustee)
An LLP or trust corporation may be appointed as sole executor and trustee.
Appointment of professional executors
Only professional executors and trustees may charge for their time (s.29 Trustee Act 2000 (‘TA 2000’)). However, this statutory right to charge imposes some restrictions.
Rather than relying on the scope of s 29 TA 2000, professional executors and trustees (whether partners in a law or accountancy firm, an LLP or a trust corporation) will want to include an express charging power. This is commonly added as part of the appointment clause.
Any Professional Trustee is entitled to charge, and be paid, reasonable remuneration for services that the Professional Trustee or their firm provides.
Receiving payment for services under s 29 TA 2000 or an express charging clause is not a breach of fiduciary duty, either by way of making a profit from a fiduciary position or a breach of the prohibition on self-dealing/ no conflict rules.
Appointment of Guardians
I APPOINT [ ] and [ ] jointly to be the guardians of any of my children who have not attained the age of 18 at the death of the survivor of myself and my civil partner [ ]
A testator with parental responsibility may appoint a legal guardian for their infant children by will (s 5 Children Act 1989). Appointment by one parent would not normally take effect until after the death of the surviving parent.
Acting as guardian is a position of responsibly and the testator should obtain consent from the proposed guardian(s) that they are willing to act. A guardian is not required to accept their appointment.
Consider whether any financial provision for the guardian is appropriate e.g. a legacy to be paid only if the guardian is appointed.
Consider whether jointly appointed guardians will work together effectively.
Administrative Powers
As we have seen, executors and trustees are often appointed by the same clause in a will and are frequently the same people. However, their roles are different.
An executor’s primary duty is to administer the estate. Once they have distributed the remaining assets to the beneficiaries their task is complete. A trustee is responsible for the management of any trusts that continue following the estate administration and this role continues for as long as the trust is in existence.
An understanding of the trustee role as well as the executor role is important when drafting a will because:
the will may include an express trust
No Express Trust is created
Even if no express trust is created a trust may arise if the executors cannot distribute all of the estate e.g. a beneficiary is a minor or there are contingent interests which have not been satisfied. In which case the assets gifted under the will need to be held on trust until such time as they can be distributed.
In both situations the will drafter must consider the administrative powers required both by an executor to ensure effective estate administration and a trustee to ensure proper management of any ongoing trust.
By virtue of the role
By virtue of their role, executors are responsible for assets within an estate and trustees are responsible for assets held in trust, but neither executors not trustees are the beneficial owners of the assets they manage. Executors and trustees must therefore be given the power to carry out their role. These powers may derive from statute, common law and/or express powers conferred by the will.
If a will contains no express administrative powers then by default only statutory and common law powers will apply. This is also the case when someone dies intestate (without having made a will).
Express Powers
Express powers within a will override default powers to the extent there is any discrepancy. Express powers may restrict, re-state, or expand the default position and may also create new powers which would not otherwise exist.
Professionally drafted wills usually contain express administrative provisions which should reflect the needs of the client. These clauses usually appear at the end of a will after the clauses that dispose of the testator’s property.
The drafting of individual administrative powers and common amendments to the default position are not considered in detail in this element.
Depending on the situation
In practice, if the people appointed as executors are also appointed as trustees the capacity in which they act will vary depending on the situation. However, it is not always obvious whether a person is acting in their capacity as PR or as trustee.
Where a trust is created by will, the will itself is the trust deed. However, for clarity, ‘trust deed’ usually refers to a document creating a lifetime trust and ‘will’ refers to the document that creates a trust following death.
A will may contain a list of express clauses at the end or may include by reference a standard set of express clauses. The standard provisions produced by the Society of Trusts and Estates Practitioners (STEP)) are nationally recognised and widely used in practice.
STEP: A professional body
STEP is a professional body promoting best practice for those advising on wills, trust and tax matters. The use of standard provisions avoids the need for an extensive list of clauses to be included in the will itself. The detail of the STEP provisions is outside of the scope of the module.
Date & Attestation
Signed by [ ] in our joint presence and then by us in [his OR her] presence
An attestation clause describes the circumstances in which the will was signed.
The attestation clause usually states that the will was executed in the presence of two or more witnesses (who attest the execution), and in doing so confirms the requirements for due execution in s 9 Wills Act 1837.
Date and Attestation
The date may be included as part of the attestation clause (or earlier at the commencement) but should not appear in both places.
The testator does not have to sign at the end of the will but it is common practice for the attestation clause to be the final clause in the main body of the will to avoid any question about their intention.
Summary
To draft a will you should start with an appropriate precedent and insert, amend or remove clauses in accordance with the client instructions.
Most precedents follow a similar structure: 1. introductory clauses, 2. appointment of executors and guardians, 3. dispositive clauses, 4. administrative provisions, 5. execution/attestation.
Revocation, date and attestation clauses should be included to avoid confusion but a will is still valid without them.
Any adult with mental capacity may act as executor. Their appointment may be absolute or qualified.
Summary
To appoint a law firm partnership all of the partners must be appointed (then expressly limit the number). An LLP and trust corporation may appointed directly.
Most wills appoint executors and trustees in the same clause and appoint the same people in both capacities.
The administrative clauses state the powers the executors and trustees have to carry out their role. Express powers take priority over statutory and common law defaults.
Will Drafting: Dispositive Clauses
Date & Attestation
Dispositive clauses By these clauses a testator directs who is to inherit their assets, what each person should receive and on what terms. The words ‘legacy’ and ‘devise’ are traditionally used to describe gifts of property. ‘Legacy’ normally refers to a gift of chattels or personalty and ‘devise’ is normally used in relation to gifts of real property (land). This element will refer generically to ‘gifts’.
Date and Attestation
Items of property or cash may be given to named beneficiaries either directly and absolutely (without restriction) or subject to conditions / terms of a trust. Traditionally, the dispositive clauses appear in the following order with non-monetary gifts first, followed by gifts of cash, and finally the gift of ‘everything else’ referred to as the residue. This element considers each of the following in turn: Specific (including gifts of chattels) General Pecuniary Residuary
Specific Gifts
Specific gifts I GIVE to [ ] my painting of Epsom race course framed in red and gold absolutely - Specific gifts are of a particular item owned by the deceased at the date of death (distinguished from other property of a similar type owned by the deceased). - A specific gift should be drafted precisely. The subject matter must be clear so the item can be identified, otherwise the clause may fail for uncertainty. Compare a gift of “my painting” (when the testator has more than one painting) with the example above. The former is likely to be void for uncertainty. - If the testator does not own at death the item referred to in the will the gift adeems (fails to take effect) and the beneficiary receives nothing.
Specific Gifts
I GIVE to [ ] my painting of Epsom race course framed in red and gold absolutely
- A testator will commonly replace items such as cars, musical instruments etc. over time and when receiving instructions for a specific gift a solicitor should check the testator’s intention in the event that the original item no longer exists.
Specific Gifts
- If the testator would like the beneficiary to receive ‘something’ even if it is not possible to give effect to the original gift an alternative substitute gift can be included. For example, an alternative item or cash equivalent to take effect only if the gift of the original item does not. For example “I give to [ ] absolutely my Stradivarius violin or such other violin that I own at my death which I keep in my safe”
Collections
Collections I give to my grandchildren living at my death absolutely in equal shares all my household furniture to be divided among them as they shall agree within 6 months of my death but in default of which a division shall be made by my Executors in their absolute discretion which shall be final and binding on all my grandchildren.
Wish to give a collection of items
- Rather than making a gift of a single item a testator may instead wish to give a collection of items. Similarly to a specific gift of a single item any collection must be clearly identified to avoid uncertainty. A gift of ‘my dressing up clothes’ may be void for uncertainty if there is no way of distinguishing these clothes from any others.
To an individual for benefit
- A gift of a collection may be to an individual for their benefit or to more than one individual to be divided as they see fit (see above). Where a division is required the will should specify how agreement should be reached, a time frame for deciding on a division (e.g. 6 months from death) and state how any failure to agree within such time should be resolved (e.g. in the absence of agreement the executors should decide).
Chattels
Chattels I give to [ ] absolutely all my personal chattels as defined by section 55(1)(x) of the Administration of Estates Act 1925 A gift of a collection of chattels is a type of specific gift. Most testators will have personal possessions (chattels) which are included in their succession estate when they die. To the extent these are not to be given away as part of the general residue clause a specific clause is needed. The statutory definition of chattels (which applies on intestacy) is usually used to identify relevant assets and avoid the gift failing for uncertainty. S 55(1)(x) Administration of Estates Act 1925 defines chattels as “all tangible movable property except for money or securities for money, assets used at the intestate’s death solely or mainly for business purposes and assets held at the intestate’s death solely as an investment”
Chattels
Chattels I give to [ ] absolutely all my personal chattels as defined by section 55(1)(x) of the Administration of Estates Act 1925 and also any motor car belonging to me even though used wholly or partly for business purposes The statutory definition is usually wide enough to cover what the testator intends but may exclude items the testator would not expect. It includes vehicles, modes of transport and pets. It excludes: Money or securities for money Items used solely or mainly for business purposes Items owned solely as an investment A gift of chattels as defined by s 55 may therefore need to be amended to include or exclude certain items (see in bold above). A will signed before 1 October 2014 which refers to s.55(1)(x) will be interpreted with reference to the previous definition (not covered by this module). The date of death is not relevant.
Chattels
Chattels I give to [ ] absolutely such of my personal chattels as defined by section 55(1)(x) of the Administration of Estates Act 1925 as are not hereby or any codicil hereto otherwise specifically disposed of A specific gift, or a gift of a collection, usually disposes of items that fall within the general definition of a personal chattel. Where a will contains specific gifts and also a gift of chattels as defined by s 55 there would be a conflict if both clauses attempted to give away the same items. To avoid this, specific gifts of items/collections appear before the gift of chattels in a will, and the gift of chattels is drafted to cover only the items that have not already been given away (see words in bold above).
Specific Gifts
Specific gifts of land It is important to first consider whether a clause dealing with the testator’s real property is actually required. Property owned as joint tenants passes outside of the succession estate and is not distributed under the terms of the deceased’s will (or intestacy). Instead, the property will pass automatically to the surviving co-owner under the law of survivorship. If this reflects the intention of the testator no provision within the will is required. Property owned solely by the testator, or jointly as tenants in common, is included within the succession estate and will pass in accordance with the deceased’s will (or intestacy).
Specific Gifts
Specific gifts of land It is important to first consider whether a clause dealing with the testator’s real property is actually required. Property owned as joint tenants passes outside of the succession estate and is not distributed under the terms of the deceased’s will (or intestacy). Instead, the property will pass automatically to the surviving co-owner under the law of survivorship. If this reflects the intention of the testator no provision within the will is required. Property owned solely by the testator, or jointly as tenants in common, is included within the succession estate and will pass in accordance with the deceased’s will (or intestacy). If a testator wants this property to be given to a sole beneficiary of the residuary estate, no specific provision within the will is required. If the testator has no particular beneficiary in mind to receive the property and is happy for it to be sold as part of the administration (with sale proceeds being distributed according to the terms of the will) no specific provision within the will is required.
Usual considerations regarding specific gifts
If a testator wants to give away their interest in a property to a particular beneficiary(ies) then the usual considerations regarding specific gifts should be addressed: The property must be identifiable. The full address and registered title number should be used. The clause should expressly state what will happen if that property is no longer owned by the testator when they die. Should a specific alternative property be given? Or should the gift be of the testator’s “main residence on the date of my death”.
Additional Matters
Additional matters should also be considered which include: * The property must be capable of passing under the will so if owned as joint tenants the joint tenancy will need to be severed. * A solicitor should check whether any third party interests affect the property and/or if the testator holds the property on trust for anyone else. If the property is owned jointly as tenants in common and the testator wants to leave their share to someone other than the surviving co-owner the testator needs advising on the rights of the co-owner.
Tax Advice
- The testator should be given tax advice regarding the Residence Nil Rate Band. * If the property is subject to a secured charge/mortgage the testator will need advice relating to the repayment of any outstanding loan and who should be liable for this. * If the testator does not want to make an outright gift and instead plans to leave the property on trust e.g. conferring a right of occupation or an interest in possession, then practical considerations should be considered. Who will have a right to occupy? Should they pay rent? Can they veto a sale? Who pays the expenses associated with upkeep? * If the property is being left to more than one person the terms of their joint ownership should be clear.
General Legacies
General legacies I GIVE to [ ] a Hasselblad Lunar camera free of tax and costs of transfer absolutely * A general legacy is a gift of property which is not distinguished from property of a similar type – e.g. “a” rather than “my”. * A general legacy does not normally fail because the PRs would have to buy the specified property if it was not part of the estate at death. Check with the testator that this is in accordance with their wishes. * Most pecuniary legacies (gifts of cash) are general in nature e.g. “I give £1,000 to [ ]”.
Demonstrative Gifts
Demonstrative Gifts I GIVE to [ ] the sum of five hundred pounds (£500) to be paid from my Rochdale Building Society Account absolutely * A demonstrative legacy is a type of general legacy (most often pecuniary in nature) which the will directs should be paid out of a specified fund. Such a gift will not fail if there are insufficient assets in the specified fund. Instead, if the specified fund has ceased to exist or is inadequate then the beneficiary is entitled to receive what is left in the fund and to have the balance of the legacy paid as a general legacy. * It is unusual to see this type of legacy in practice. The gift is of the same value whether or not it comes from a specific account and the account itself would rarely have sentimental value.
Pecuniary Gifts
Pecuniary Gifts I GIVE to [ ] the sum of five hundred pounds (£500) free of tax and absolutely * A pecuniary legacy is a gift of money. * It can be specific (‘my £300 in the safe in the garage”) or general (see above). * The clause will often contain the amount of the gift in numbers and words in case there is an error when typing a numerical figure.
