Contents of a Will Flashcards
what should the opening of a will state?
- Should state T’s name and purpose of the document
- If relevant, it should state they do not want the will to be revoked on marriage
what is a revocation clause? what is its effect?
it revokes all former wills, codicils etc
This means earlier wills do not have to be searched for
what is the min and max number of executors?
- Min > 1 E.
Advisable to have more than 1 in case E can no longer act
1 E can give good receipt for proceeds of sale of and in the estate
- No max but only 4 Es can apply for probate.
who can be an executor?
individuals, professionals (i.e. a solicitor), banks/trust corporations
how many executors can apply for probate?
4
how many executors are needed to give good receipt for land?
1
when a professional is an executor, who is the named executor?
o Either the professional or the firm can be named, but if an individual professional is being named, T will need to consider what happens if they retire or predecease T
if a general partnership is the executor, how are they named in the will? what else should be considered?
the partners will need to be named as the firm has no SLP. Important to specify the partners ‘at death’ are appointed.
Sensible to provide for possibility of firm changing name, amalgamating etc
what are the administrative provisions relevant to all wills?
Power to Appropriate Assets Without Consent of the Legatee
Power to Insure
Power to Accept Receipts from or on behalf of Minors
Self-dealing
Charging Clause
what is the position regarding the will and statutory duties of E / T?
- It is common for the will to include these powers to centralise them and make it easier for PRs.
- The instrument can also amend the statutory duties.
re: Power to Appropriate Assets Without Consent of the Legatee
what is the statutory position?
PRs can use any assets in the estate to satisfy a legacy or residuary interest so long as this does not prejudice any B of a specific legacy. If it does, the specific legatee must provide consent (or their parents/guardian if they are a minor)
re: Power to Appropriate Assets Without Consent of the Legatee
how is this often amended in a will? even if it is amended, what is important to remember?
- Common to amend this to remove the requirement for consent
- NB: even if this provision is extended, if E is also a B, they would still need to obtain consent from all the Bs otherwise this would be a breach of FD.
re: Power to Insure
what is the statutory position?
PRs and trustees have power to insure assets against all risks to the full value of the property and pay premiums out of income or capital
re: Power to Accept Receipts from or on behalf of Minors
what is the statutory position?
- Generally, minors cannot give good receipt for a legacy but CA 1989 allows parents/guardians to give good receipt on their behalf.
re: Power to Accept Receipts from or on behalf of Minors
why might this be amended?
- This is not always desirable in some family dynamics. If that is the case, T should state that the property is held on trust for the child or include provision that PRs can accept receipt from the child if they are over 16
re: Self-Dealing
what is the position regarding self-dealing?
this is not permission, so if T is agreeable to self-dealing, T will need to specifically state this in the will.
re: Self-Dealing
when is it important to include a self-dealing provision?
give an example
- Important to include this where E / trustee is also a B as there is a real risk of conflict
i.e. B is an E. B wants to satisfy legacy with another asset. They cannot do this without consent of all other Bs, otherwise this is a breach of FD
re: Charging Clause
what is the purpose of this clause? what must be included?
- i.e. a clause which allows Es and trustees to charge/profit from the will/trust
- If they are allowed to charge, the will needs to be clear whether any profession can charge, or only those related to the administration of the estate. Otherwise, rules relating to renumeration of trustees applies to Es
what additional administrative provision should be included for a will trust?
Power to Appropriate Assets
Power to Invest
Power to Purchase Property
Power to Sell Personalty
Power to Use Income for Maintenance of Beneficiaries
Power to Advance Capital
Choice of Trustees by Beneficiaries
Duty to Consult
Beneficiary Rights of Occupation (s12 TLATA)
Power to Carry on T’s Business
explain power to appropriate assets in relation to will trusts
- s41 AEA doesn’t apply to trusts. T will need to include express provision for trustees to use an asset to satisfy another B’s interest.
explain power to invest in relation to will trusts
- Trustees have a duty to invest trust property (see: trusts). T may wish to outline the investment duties for completeness.
explain power to purchase property in relation to will trusts
- Trustees have power to acquire land in the UK. If T wants trustees to be able to purchase realty outside the UK, they will need to state this in the will.
explain power to sell personalty in relation to will trusts
- the law is unclear whether trustees have the power to sell personalty. T may want to expressly provide for this.
explain power to use income for maintenance of Bs in relation to will trusts
- Trustees have a power to pay minor Bs income for maintenance etc
- Trustees have a duty to pay income to Bs who have turned 18 but have a contingent interest
- T can increase the age Bs are entitled to the income i.e. ‘s31 TA shall apply to my estate income as if the age of 21 were substituted for the age of 18’
re: power to advance capital (will trusts)
what is the statutory position?
Trustees have a power to advance capital for B’s benefit / advancement where B has an interest in the capital
re: power to advance capital (will trusts)
why might T want to amend the statutory position using the will?
- T’s sometimes amend this provision to allow trustees to make an advancement of capital to the life tenant (this could be as a loan)
re: choice of trustees by Bs (will trusts)
what is the statutory position?
where Bs are sui juris (i.e. at least 18 with full capacity) and taken together absolutely entitled to the trust, they can direct trustees to retire and appoint new trustees of their choice.
T might want to exclude this power in the will
explain duty to consult (will trusts)
- Where B is sui juris and has an interest in possession of land under trust, trustees must consult B when exercising any function in relation to the land.
- Trustees must also give effect to the wishes of B, so far as it is consistent with the general interest of the trust (s11 TLATA)
- The duty to consult is often excluded from the will.
explain B’s rights of occupation (will trusts)
B with an interest of possession (even if not 18) has a right to occupy land if:
o The purpose of the trust is for B to occupy the land; or
o Trustees acquired the land to make it available for B
T cannot exclude B’s rights under s12 in the will. However, T can include a declaration that the purpose of the land is not for occupation.
explain power to carry on T’s business (will trust)
- Relevant where S was a sole trader
- Trustees have limited power i.e. they can only run the business with a view to selling it is as going concern & use assets the business already had at DOD
- These powers can be extended under the will
- It is possible to appoint an E and limit their powers to a particular asset in the estate (i.e. running the business)
what clauses need to be included in the will?
- opening & any revocation clause
- administrative provisions
- guardians
- beneficiaries
- gifts
- attestation clause
- survivorship clauses
what is a guardian clause?
a clause confirming who will look after children if T and other parent dies
why is it important the will properly defines Bs?
Bs must be clearly identified otherwise the gift will fail for uncertainty
what are the types of gifts?
vested gifts
contingent gifts
what is a vested gift?
B will be immediately entitled so long as they outlive T.
if a gift is vested and B is a minor, what happens?
If B is a minor, the entitlement is held on trust until they are 18
If B dies before they are 18, the money will form part of their estate
Unless the will says otherwise, the parents/guardians can give good receipt to hold the money on trust for B
what is a contingent gift?
B must satisfy a contingency before the gift vests.
if the gift is contingent, what else must the will state?
The will should name trustees to hold the gift on express trust for B
what happens if B does not satisfy the contingency?
If B does not satisfy the contingency, it does not form part of B’s estate. It was pass to next person in T’s will or the residue.
what is a substitutional B?
i.e. someone who will inherit a gift when the intended B can’t
if B is a charity, what happens?
what should the clause state?
- If a charity is run as an unincorporated association, it will not have SLP. Therefore, every member would need to sign in order to receipt the gift.
- To avoid this, it is normal for a will to authorise Es to accept receipt of an authorised officer of the charity.
- Clause should state receipt of the person who appears to be the treasurer / other proper officer is sufficient (to avoid Es needing to check the constitution)
what is a devise?
give an example considering the risk of ademption
a gift of realty i.e. land or buildings
o ‘I give my cottage to Sam’ risk of ademption
o ‘I give my main residence at death’ less risk of ademption
what is a legacy?
a gift of personal property (but often used to also describe realty)
what are the types of legacy?
o Pecuniary
o Specific
o General
o Demonstrative
what is a pecuniary legacy? give an example
Pecuniary = a gift of money. This can be specific, general or demonstrative
explain a specific legacy
give an example
o a specific, nominated gift ‘my gold watch, my cottage’
If T leaves a collection to several people T should indicate an order of choosing to avoid dispute or state that E has the final decision
explain a general legacy
give an example
o non-specific gifts ‘all my furniture, an orange vase’. If D does not possess the item, PRs will need to acquire it using money from the estate
Money is nearly always a general gift ‘£2k to my child’, unless it specifies where the money is ‘£500 under my bed’
explain demonstrative legacy
a specific amount of money to be paid from a particular fund. If there is not enough money in the account, the remaining is paid from another asset in the estate and classed as a general gift
what costs may be associated with a gift and who is responsible for these costs?
give an example
i.e. packaging, transport or mortgage attached to property
* These costs are borne by B, unless the will states otherwise
o i.e. the gift states ‘free from mortgage’ the residue will pay the mortgage
what is the position regarding payment of inheritance tax
give examples
The default position is that IHT on individual legacies is payable from the residuary estate. However, the will can stipulate otherwise
o i.e. the gift says ‘subject to tax’ B receiving the gift will pay IHT.
o i.e. the gift is silent on tax or says ‘free from tax’ the residue will pay IHT
what should the will state in terms of gifts of residue?
- The will should contain an express direction that all debts, expenses and legacies should be paid before the residue is distributed to Bs
- If there is no such direction, the statutory order in AEA 1925 will apply
does T need to create an express trust when the residue is passing to adult or charitable Bs?
no, but it does not harm
what happens if the gift of residue fails?
If the gift of residue fails, partial intestacy will take place.
what should T do if they want to avoid partial intestacy taking place where the gift of residue fails?
T should:
o Make provision for a substitutional gift or longstop B (i.e. one B in the event all gifts fail, often a charity as these gifts rarely fail)
o Careful drafting i.e. ‘for such of my children that survive me’ will mean partial intestacy will only occur if all of the children die. Whereas, when Bs are named, if they do not have any issue to inherit under s33 WA 1837, then their share will pass under the IR
explain survivorship clauses
- B only has to survive T to have a vested interest on T’s death, unless the will states otherwise (i.e. a survivorship clause)
- SCs make the gift contingent
- This prevents the gift from taking effect where B is deemed to have survived T by virtue of s184
what is the purpose of an attestation clause?
- Confirms the s9 formalities were complied with.
- This raises the presumption of due execution.
when will the attestation clause need to be adapted?
give an example
- It will need to be adapted if the standard procedure wasn’t followed (i.e. if T did not sign themselves)
- i.e. “signed by T in our joint presence, and then by us in theirs”
how many trustees are advisable for a will trust? why?
- Advisable to have 2 trustees as 2 are needed to give good receipt for proceeds of sale of land held on trust.
if a will trust is being created, why is it advisable for the executors and trustees to be the same people?
- Sensible for E and Ts to be the same people. Once their role as E is complete, they can transfer property to themselves in new trustee capacity
what are the similarities between trustees and executors?
both fiduciaries, same duties & powers under TA 2000
what are the differences between trustees and executors?
- trustees can retire, PRs cannot without a court order, different limitation periods
explain who a solicitor can take instructions from
- S should not accept instructions from a third party to draw up a will for T
o S must interview T in the absence of the third party
when can a solicitor be liable in negligence?
S can be liable in negligence if their advice/failure leads to an invalid will, i.e.:
o Ws are not beneficiaries/their spouse
o Check s9 requirements appear to have been satisfied
who does a solicitor owe a duty of care to?
the client, but also prospective Bs
what must a solicitor consider when drafting a will?
- S’ must consider duty to avoid own conflict of interests
when should a solicitor not act?
S should not prepare a will giving a significant legacy to themselves or an employee of the business (or any family members) unless the client has sought independent legal advice
o If the client will not take independent advice, S will need to cease acting
o ‘significant’ will depend on the size of the estate i.e. £500 would be significant if the estate was small.
where the will leaves a legacy to the drafting solicitor, when will might the client not need to take independent legal advice?
- T may not need to take independent legal advice in some circumstances i.e. T is S’ parent and they are leaving the residuary to children in equal shares
how must the solicitor approach a discussion with a client regarding the solicitor as an executor?
- S must not encourage clients to appoint them as an E unless it is clearly in their best interest to do so
- Before drafting a will where S is appointed as E, S must ensure T is fully informed as to their options available, that E need not be a professional and lay Es can appoint an S for assistance if necessary.
- S should record the client’s decision and the advice given
