Gifts (& failure of Gifts)

Question 1

What are the 4 main types of Gifts in a will?

Answer 1

(1) SPECIFC gifts
(2) GENERAL gifts
(3) DEMONSTRATIVE gifts
(4) RESIDUARY gifts

Question 2

What are ‘SPECIFIC Gifts’?

Answer 2

PARTICULAR Item given to a person (e.g wardrobe)

Question 3

What are ‘GENERAL Gifts’?

Answer 3

Items NOT DISTINGUISHED from each other
(e.g. £, shares)

£ = ‘Pecuniary’ gift

Question 4

What are ‘DEMONSTRATIVE’ Gifts?

Answer 4

GENERAL Gift BUT paid from a SPECIFIC FUND
(e.g. £100 to X from HSBC Account)

Question 5

What are ‘RESIDUARY gifts?

Answer 5

Gifts from the RESIDUARY ESTATE (i.e. after specific gifts, general gifts, debts, taxes and expenses paid)

Question 6

What is the GENERAL Rule on what happens when the following types of Gift FAIL?

(1) Specific, General, Demonstrative
(2) Residuary

Answer 6

(1) Form part of the RESIDUARY ESTATE (UNLESS will specifies otherwise)
(2) PARTIAL INTESTACY - Residuary estate passes under INTESTACY RULES

Question 7

What happens when a RESIDUARY GIFT Fails?

Answer 7

PARTIAL INTESTACY
Residuary estate passes under INTESTACY RULES

Question 8

What happens when a Gift is given to a MINOR?

Answer 8

Held on TRUST until they became an ADULT (i.e. 18)

Question 9

What are the 7 main ways a Gift will Fail?

(Tip - AWFUL DD)

Answer 9

(1) A - Ademption (Gift no longer exists on T’s death)
(2) W - Witness (B = witness executes will)
(3) F - Forfeiture (unlawful killing of T)
(4) U - Uncertainty (of subject or object)
(5) L - Lapse (B predeceases T)
(6) D - Divorce / dissolution (B = spouse & marriage ended)
(7) D - Disclaimed (B does not want gift)

Question 10

(1) What is the GENERAL Rule on whether a Gift to a Witness FAILS?
(2) What is the exception to this rule?

Answer 10

(1) Fails
(2) UNLESS at least 2 other witnesses NOT Beneficiaries (i.e. 3 in total)

Question 11

(1) What word is used to describe a gift that NO LONGER exists on T’s death?
(2) What is the effect of this on the Gift?

Answer 11

(1) Ademption
(2) Fail / Void

Question 12

Gifts that are ‘Adeeemed’ (i.e. no longer exist on T’s death) will Fail / Void.

(1) What 1 type of gift does this rule apply to?
(2) What 2 types of gifts do the rules NOT apply to

Answer 12

(1) SPECIFIC gifts
(2)
(a) GENERAL gifts
(b) DEMONSTRATIVE gifts

Question 13

An asset that has changed in NATURE may be ‘Adeemed’. (1) What is the test used to determine this?
(2) Will this test be met for:
(a) Change in NAME
(b) CHANGE in SUBSTANCE

Answer 13

TEST - Is the Asset ‘SUBSTANTIALLY THE SAME’?
(a) Change in NAME - YES
(b) Change in SUBSTANCE - NO

Question 14

What is the term used when a Gift fails because the Beneficiary PREDECEASES the Testator?

Answer 14

‘Lapse’

Question 15

What does it mean when a Gift ‘Lapses’?

Answer 15

Gift FAILS because the Beneficiary PREDECEASES the Testator

Question 16

(1) What is the GENERAL RULE on what happens to a gift if a Beneficiary PREDECEASES the Testator?

(2) What is the EXCEPTION to this rule?

Answer 16

(1) Gift LAPSES (i.e. fails)

(2) S33 Wills Act 1837 - Beneficiary = ISSUE of T & then gift will pass to their ISSUE (unless contrary intention in will)

Question 17

An exception to the General Rule that if a Beneficiary PREDECEASES the Testator is under S33 Wills Act 1837. What is this?

Answer 17

Beneficiary = ISSUE of T & then gift will pass to their ISSUE (unless contrary intention in will)

Question 18

If the TESTATOR and BENEFICIARY die simultaneously / CANNOT be proved who died first, how will it be decided who died First?

Answer 18

Older (person)

Question 19

Will a gift made to 2 or > people as JOINT TENANTS (e.g. ‘to A and B jointly) LAPSE if the B PREDECEASES the T?

Answer 19

NO - Gift passes to the Surviving B’s (by survivorship)

Question 20

Will a gift made to 2 or > people as TENANTS IN COMMON (e.g. ‘To A and B in Equal Shares’) LAPSE if the B PREDECEASES the T re:
(a) Deceased B
(b) Surviving B(s)

Answer 20

(a) DECEASED B - ‘Lapses’ (part of ‘Residuary estate’)

(b) SURVIVING B - Receive their share

Question 21

What does it mean if a Gift is ‘Disclaimed’?

Answer 21

Beneficiary refuses to accept the Gift

Question 22

If a Gift is ‘Disclaimed’ (i.e. B refuses to accept the gift):
(1) How is the Beneficiary treated?
(2) When can a B NOT ‘Disclaim’ the gift?

Answer 22

(1) As if they PREDECEASED the Testator
(2) Already Received BENEFIT from the gift (e.g. income)

Question 23

What does the rule of ‘FORFEITURE’ mean?

Answer 23

Beneficiary CANNOT receive Gift from a Testator they UNLAWFULLY KILL (e.g. Murder, Manslaughter)

Question 24

(1) What is the effect of ‘Forfeiture’ on the Beneficiary?
(2) Can the Court grant relief from ‘Forfeiture’?

Answer 24

(1) Beneficiary treated as if they PREDECEASED the Testator
(2) YES but NOT for Murder

Question 25

(1) What is the effect of ‘Divorce’ / Dissolution on a gift to a spouse?
(2) How is the spousal Beneficiary treated?

Answer 25

(1) Gift FAILS / LAPSES
(2) Spouse treated as if they DIED on DATE OF DIVORCE / DISSOLUTION

Question 26

What are the 2 ways a Gift will fail due to UNCERTAINTY?

Answer 26

(1) Uncertainty of SUBJECT (beneficiaries)
(2) Uncertainty of OBJECTS (gift)

Question 27

(1) What is the GENERAL rule on when a will ‘speaks’ from?
(2) What is the exception to this rule?
(3) When does the will ‘speak’ from in the exception in (2)

Answer 27

(1) Date of DEATH
(2) Beneficiary - (3) Speaks from DATE OF EXECUTION

Question 28

A woman makes a will stating ‘I give £1000 to my eldest son’.

She has two sons. The eldest son dies predeceases the testator. What will happen to the gift of £1000 on the death of the testator and why?

Answer 28

Gift LAPSES / Fails
Why? - Will speaks from ‘Date of EXECUTION’ re beneficiaries and so the eldest son remains one that died