Intestacy

Question 1

What are the main types of property not passed by the succession estate?

Answer 1

• donationes mortis cause
• discretionary pension scheme benefits
• insurance policies written in trust
• statutory nominations
• property held as beneficial joint tenants
• some other beneficial interests under trusts and property held in a trust

Question 2

What are the three requirements for a valid DMC?

Answer 2

DMC is a gift made in contemplation of death:

1. the gift is made because the donor believes they may die imminently of a particular cause.
2. The donor makes it clear that the gift is conditional upon them dying, and that the property reverts to them if they survive.
3. The donor either parts with the property or something representing ownership of it.

Question 3

When will a pension scheme not be included in succession estate?

Answer 3

When it is discretionary.

Question 4

What is the max amount for statutory nominations?

Answer 4

£5000

• Friendly Society
• Industrial Society
• Provident society

Question 5

What type of property ownership structure passes outside the succession estate?

Answer 5

Property held as joint tenants - will pass via survivorship

Question 6

What happens to a life interest when a life tenant under a life interest trust dies?

Answer 6

Life interest expires on death - does not form part of succession estate.

Question 6

What happens to a remainder interest when a remainderman under a life interest trust dies?

Answer 6

If the interest is vested - the remainder interest passes to their estate.

Question 7

Are interests under discretionary trusts included in succession estate?

Answer 7

No.

Question 8

How long must a spouse survive their deceased spouse to inherit under intestacy?

Answer 8

28 days. Only applies to spouses.

Question 9

What happens if intestate leaves a spouse but no issue?

Answer 9

Spouse inherits entire succession estate absolutely.

Question 10

What happens if intestate leaves issue but no spouse?

Answer 10

Issue inherits entire succession estate on statutory trusts.

Question 11

How is the estate distributed if intestate leaves spouse and issue?

Answer 11

Spouse:
- all personal chattels
- £322,000 free of tax and costs plus interest from the date of death to the date on which payment is made.
- one half of residue (if any absolutely)

Issue:
- other half of residue (if any) on the statutory trusts.

Question 12

What are the two limbs of statutory trusts?

Answer 12

Contingency Limb:
- each beneficiary must survive the intestate and reach the age of 18 in order to inherit. Until fulfilled, beneficiary has a contingent interest
- If already 18, has a vested interest

Substitution Limb:
- If entitles beneficiary dies before the intestate that beneficiary’s own issue can inherit in their place, provided they satisfy the contingency limb

Question 13

What is the statutory order for distribution where intestate is not survived by spouse/civil partner or issue?

Answer 13

Section 46 AEA 1925:

1. Parents
2. Whole siblings
3. Half siblings
4. Grandparents
5. Whole Uncles and Aunts
6. Half Uncles and Aunts
7. The Crown

Where more than one person in relevant category, estate is divided equally between them.

Question 14

What is the definition of ‘personal chattels’?

Answer 14

Means tangible movable property but excludes:

1. money or securities for money
2. Property used by intestate at death solely or mainly for business purposes
3. Property held at the death of intestate solely as an investment

Question 15

What happens if marital home is held as tenants in common or deceased was the sole owner?

Answer 15

Spouse has no automatic right to receive the deceased’s share of the marital home.

May make an election which enables them to appropriate their home in full or partial satisfaction of statutory entitlement.

Must make election in writing to the PR within 12 months of the date of the grant. During that period the PR cannot normally sell home without spouse’s consent.

If lower than entitlement, must pay difference from own money.