General Flashcards
What does Rule 20 of the Non-Contentious Probate Rules state?
It sets out the order of entitlement for Letters of Admin with Will Annexed (where executor appointment failed or where estate is partially intestate):
- Executor
- Trustee of the residuary estate
- Any other residuary benificiary - vested interests preferred
- Personal Reps of anyone in 3 other than life tenant of the residue
- Any other B or creditor
- PR of another in 5 other than life tenant.
What is a Benjamin Order and when should you apply for one?
A Benjamin Order is a court order giving the personal representative (PR) leave to distribute the estate taking into account a possible claim from a person who cannot be found.
Seeking a Benjamin Order is the only way for the executor to gain full protection from a future claim by a known creditor.
What is a post-death variation, why is it useful, and what are the formalities?
WHAT: A variation allows a beneficiary to change who receives their inheritance.
WHY: Deemed disposal of capital gains tax for original B
FORMALITIES:
- must be in writing
- made w/in 2 years of death
- not for monetary cosideration
Who is eligible to bring claim under Inheritance (Provision for Family and Dependants) Act 1975 (‘the Act’).
- Surviving spouse/civil partner
- Former spouse/civil partner
- Child of deceased/someone treated as child of deceased. Usually only eligible if underage, unemployed and dependant
- Person living with deceased as spouse/partner for last 2 years.
- A person being maintained
Who is eligible to bring claim under Inheritance (Provision for Family and Dependants) Act 1975 (‘the Act’).
(1) spouse/civil partner
(2) former spouse/civil partner IF not remarried
(3) child or someone treated as child (dependant)
(4) person being maintained by deceased
(5) person living with deceased for 2 years prior to death as spouse/civil partner
What is an excepted estate and when does it arise?
An estate which owes no inheritance tax (‘IHT’) and does not have to file a formal IHT account is called an excepted estate.
To be excepted, the estate’s total gross value plus specified transfers cannot exceed either:
- the inheritance tax threshold, currently £325,000, or
- £1 million if the net chargeable estate does not exceed the threshold.
The threshold can be increased to take account of the transferred nil rate band from a predeceased spouse if the entire nil rate band was unused. So threshold could be £650,000.
What are PR’s powers when investing in land?
- The PRs can buy a property and then rent it out to generate income.
- The power to invest covers both freehold and leasehold land.
- Power to invest does not include the power to purchase of land abroad.
- Power to invest does not include the power to purchase of land jointly with anyone else.
What happens to son’s inherentance (in mother’s will) when he dies before mother?
If a beneficiary has predeceased the testator, the gift to them normally will lapse. However, if a gift is made to the testator’s issue who die before the testator and who leave living issue of their own, the living issue will receive the gift.
What does a person challenging the validity of a will for duress or undue influence prove?
- That the Testator lacked intention by showing the testator made the will as a result of duress (that is, as a consequence of a threat of force), due to fraud, or because of undue influence (that is, something that overpowered the testator’s volition).
When does the class close for a gift of £1000 to each of the children of Jenny who attain age of 18?
At the death of testator
When does the class close for a gift of £1000 to the children of Jenny who attain age of 18?
If no child aged 18 at time of death, it class remains open until first child turns 18.
*contingent
When does the class close for a gift of £1000 to the children of Jenny?
At the time of death as long as there are children of Jenny. Otherwise remains open until death of Jenny?
How can a PR protect themselves from liability for unpaid IHT for PETs to HMRC?
The personal representatives could protect themselves from this liability by making full enquiries to discover details of lifetime gifts and obtaining a certificate of discharge from HMRC.
Liability for failed potentially exempt transfers by the deceased can arise if the inheritance tax due is still unpaid after 12 months. However, HMRC will not pursue the personal representatives for this liability if the personal representatives have made the fullest enquiries and obtained a certificate of discharge from HMRC.
What standard is applied for the financial provision of unmarried partners under the Inheritance (Provision for Family and Dependants) Act?
When hearing a claim under the Inheritance (Provision for Family and Dependants) Act 1975, the court will consider whether the will or intestacy has failed to make reasonable financial provision for the applicant. In the case of unmarried partners, the standard applied is the financial provision required for the partner’s maintenance such that they can live decently and comfortably according to their situation.
**In other words - spousal provision (beyond what is necessary for maintenance) does not apply to unmarried partners.
Also must have lived with the deceased for 2 years prior
What is the power of appropriation and what are relevant limitations?
The executors have the power of appropriation.
This means that they can use an alternative asset (eg engagement ring instead of money) to satisfy a legacy or interest in the estate, provided:
(1) the relevant B consents, and
(2) no specific B is affected.
However, unless the will provides otherwise, it is not permissible for a PR to make an appropriation in their own favour.
