Interpreting & Challenging the Will

Question 1

What is the date from which the will speaks (property)?

Answer 1

The will speaks from the date of death; however, this presumption might be displaced by words like “my”, “present” or “current” which make the date of execution the relevant date.

Question 2

What happens if the property is no longer owned at the date of death by the testator?

Answer 2

Gift adeems and beneficiary receives nothing (unless there is a substitution clause etc).

Question 3

What is the date from which the will speaks (collections)?

Answer 3

Always the date of death, even if the words ‘my’ is used.

Question 4

What is the date from which the will speaks in respect of people?

Answer 4

The date of execution unless a contrary intention is shown. The will should state the date at which beneficiaries will be determined but otherwise, the class closes when the first beneficiary’s interest vests (not to do with age but to do with being given gift absolutely).

Will be reset by codicil.

Question 5

What is a letter of wishes?

Answer 5

It is a letter annexed to the will which is not legally binding but can contain the testator’s wishes.

Question 6

What are the default provisions for IHT in the will?

Answer 6

Gifts are given free of IHT and the IHT is paid from the residue. The testator can oust this general rule using a clear clause.

Question 7

What are the default provisions for costs of transfer and maintenance?

Answer 7

The beneficiary is responsible for paying the costs of transferring and maintaining the property since the date of death.

Testator can oust this rule.

Question 8

What is the default provision in relation to charges?

Answer 8

If property gifted under the will is subject to a charge or otherwise secured (i.e a mortgage) then the beneficiary takes the gift subject to the mortgage / charge unless contrary interest is shown.

Question 9

What happens where the order of death is unknown or simultaneous?

Answer 9

• Simultaneous = presumption that older person died first and their estates will be distributed as such.
• Testator may include survivorship clauses (i.e X must survive me for X days)

Question 10

What does s.21 of the Administration of Justice Act 1982 make provision for?

Answer 10

Where the meaning of the will or clause is unclear, it is possible for the courts to rule on how it will be constructed. Overriding principle is that the intention of the testator should be given effect.

Question 11

Who can challenge the will using the IPFDA 1975?

Answer 11

• spouse / cp
• former spouse / cp who is not remarried
• cohabitee cohabiting for at least 2 years preceding date of death
• child
• Person who is financially dependent on the deceased.

Question 12

When and where must an application under the IPFDA 1975 be made?

Answer 12

In the Crown Court or High Court (family / chancery division) within 6 months from the date of grant.

Question 13

On what basis can the will be challenged under IPFDA 1975? (spouses / cps / former spouses and cps)

Answer 13

Whatever is reasonable whether or not for his or her maintenance. Maintenance = middle ground between poverty and luxury.

Question 14

On what basis can children / financial dependents / cohabitees challenge the will using the IPFDA 1975?

Answer 14

Based on what is reasonable for his or her maintenance.

Question 15

What factors must the court consider when making an order under the IPFDA 1975 in all cases?

Answer 15

1. Needs and rights of the other beneficiaries;
2. Size of the estate;
3. Obligations which deceased has towards applicant and other benficiaries;
4. Physical or mental disabilities
5. any other relevant matter

Question 16

Which orders can be made by the court under the IPFDA 1975?

Answer 16

• Property transfer order
• Property acquisition order
• Lump sums
• Periodical payments]
• Order to vary marriage / cp settlement
• Order varying applicant’s benefits on trust

Order is deemed effective from the date of death.

Question 17

What are the requirements for varying a will?

Answer 17

• That beneficiary has already accepted their entitlement;
• Each asset can only be varied once;
• In writing, within 2 years of date of death, election in relation to IHTA and not for consideration.
• Approval may be required from PRs if it results in additional IHT being payable on estate.
• Not a life interest in trust or GROB.

Question 18

What is the nature and effect of a will variation?

Answer 18

Involves writing to the PRs to request that PRs transfer the beneficiary’s entitlement to another person after they have received it. Can write back tax so that it is not a PET for the beneficiary + disposal made by deceased for CGT purposes rather than the beneficiary.

Question 19

What is the nature and effect of a disclaimer?

Answer 19

The beneficiary disclaims their WHOLE (not part) entitlement under the estate before it becomes vested in them. This may not disclaim their entitlement under the intestacy rules.

Must write to PRs within 2 years of death and expressly confirm s.142 IHTA applies + not for consideration.

Effect is avoiding IHT and CGT.

Question 20

What is the nature and effect of a precatory trust?

Answer 20

Gift to a beneficiary in the will with instructions as to how the gift should be passed on to others.

No formal trust is created but would be unfair for beneficiary to bear tax burden of passing it on. Not a binding wish, beneficiary may not pass it on. No need for written election.

HOWEVER, only written back for IHT if distributes within 2 years of death, beneficiary also still has to pay CGT.

Question 21

What is a mutual will?

Answer 21

Where one testator agrees with another testator that neither of them will amend their will without the consent of the other. If one attempts to do so without the other’s consent, equity may impose a constructive trust over that testator’s property on the terms agreed and limit the effect of the new will.

I.e spouses make wills on terms where the survivor inherits the other’s estate and on survivor’s death, this passes to children. If unconscionable to allow survivor to change terms of will after other spouse’s death, equity imposes constructive trust.

Question 22

What is a mirror will?

Answer 22

Quite common. Where wills of spouses / couple mirror each other. No agreement or constructive trust and survivor of couple free to revoke will at any time.