Dispositive Clauses Flashcards
What is the purpose of dispositive clauses?
Direct the inheritance of assets; describe property gifts (Legacy for chattels/personalty, Devise for real property); gifts can be absolute or conditional/trust.
Typical order of dispositive clauses?
Non-monetary gifts, gifts of cash, then residuary (everything else).
What is a Specific Gift?
Gift of a particular item owned at death; precisely described; gift adeems (fails) if not owned at death unless alternative included.
What to consider for gifts of items frequently replaced (e.g., cars)?
Include alternative gift provisions to ensure beneficiary receives substitute if original item doesn’t exist.
How should collections be gifted? What happens if beneficiaries disagree?
Clearly identified, with time frame and method for division; executors decide if beneficiaries disagree.
Definition of ‘Personal Chattels’ under s.55(1)(x) Administration of Estates Act 1925?
All tangible movable property except money/securities, business assets, or investments; includes vehicles/pets.
Why might a “statutory gift” (the statutory definition) of chattels need amendment?
To include and/or exclude certain items not covered by statutory definition.
How to avoid conflict between specific gifts and general gift of chattels?
Specific gifts should appear before general chattel gifts; general gift should only include items not previously gifted.
How to give a specific gift of land?
Clearly identifiable (address/title number); alternative provisions if no longer owned; consider joint tenancy implications.
Key considerations when giving specific gifts of land?
Joint tenancy vs tenants in common, third-party interests, Residence Nil Rate Band, mortgage repayment, potential trusts, joint ownership terms.
What is a General Legacy? What happens if testator doesn’t own it?
Gift of property not specifically distinguished from similar items.
PRs must purchase item if estate doesn’t have it.
Example of General Legacy?
I give Leonardo DiCaprio a Hasselblad Lunar camera absolutely.
What is a Demonstrative Gift?
General legacy payable from specific fund; if fund insufficient, balance paid as general legacy.
Example of Demonstrative Gift?
I give Muhammad Ali £500 from Rochdale Building Society Account absolutely.
What is a Pecuniary Gift?
A gift of money; can be specific (cash in garage) or general (£500 gift).
How should pecuniary gifts be drafted?
Clearly in numbers and words to avoid ambiguity.
What constitutes a Residuary Gift?
All property not already specifically disposed of; usually largest part of estate.
Risks of poorly drafted residuary clause?
Partial intestacy if residue not fully disposed of; creates complications for executors.
How to draft residuary clause effectively?
Use substitution clauses, avoid splitting residue unnecessarily, include ‘ultimate gift over’ (disaster) clauses.
When is a trust imposed on a residuary gift? (5)
1) Life interests
2) Discretionary trusts
3) Multiple beneficiaries
4) Minors
5) Contingent interests.
What happens if earlier gifts fail?
Assets fall into residue; if residuary gift fails, partial intestacy results.
How to prevent failure of residuary gifts?
Express substitution clauses, avoid dividing residue unnecessarily, include ultimate gift over clause (disaster clause).
