Intestacy and Succession Flashcards
What are the Intestacy Rules?
The rules governing the distribution of a Succession Estate where the Deceased did not leave a valid, comprehensive Will.
The main legislative instruments are the Administration of Estates Act 1925 (“AEA”) and the Inheritance and Trustees’ Powers Act 2014 (“ITPA”).
In a Succession, what is the Lawyer’s first order of business?
- Determine if the Deceased left a valid Will; and
- The size and nature of their Succession Estate.
The latter is particularly critical because certain assets are excluded from the Succession Estate, and are instead subject to their own rules.
What are the Main Types of Assets that are outside the Succession Estate?
- Statutory nominations.
- Donationes Mortis Causa (“DMC”).
- Insurance policies written in trust.
- Discretionary pension scheme benefits.
- Property held as Beneficial Joint Tenants.
- Some other beneficial interests under trusts.
What is a Statutory Nomination?
A nomination of given Friendly, Industrial, or Provident Society to receive benefits or assets not exceeding £5,000.
What is a Donationes Mortis Causa?
A gift made in contemplation of death.
When will an Asset qualify as a Donationes Mortis Causa?
- The Donor gifts the asset because they believe they may die imminently of a particular cause.
- The Donor makes clear the gift is conditional upon them dying, and that ownership reverts if they survive.
- The Donor either parts with the asset or something representing ownership of it.
Cain v Moon [1896] 2 QB 283.
How may you gain authorisation to deal with Assets outside the Succession Estate?
By obtaining a grant of representation.
What is the Order of Entitlement in a Succession?
- Spouse and Issue (i.e. Direct Descendant), but if there are none;
- Parents.
- Full Siblings.
- Half Sibilings.
- Grandparents.
- Full Blood Uncles and Aunts.
- Half Blood Uncles and Aunts.
- The Crown.
AEA 1945, s. 46(2).
The Spouse’s entitlement is dependent upon them surviving the Deceased by 28 days.
Between the Spouse and Issue, how is the Estate distributed?
- The Spouse takes absolute ownership of all Personal Chattels.
- The Spouse takes a fixed sum (£322,000) from the Residuary Estate, free of tax and costs and with interest from the time of between death and payment.
- The remainder of the Residuary Estate is split evenly between the Spouse (absolutely) and Issue (on statutory trust).
AEA 1925, s. 46(2).
The Residuary Estate is the Succession Estate following the deduction of all Personal Chattels.
What is the definition of Personal Chattels?
Any tangible movable property, excluding:
* Money or securities for money;
* Property used by the Intestate at their death solely or mainly for business purposes;
* Property held at the death of the Intestate solely as an investment.
AEA 1925 — s. 55.
What is the Contingency Limb of a Statutory Trust?
- Each entitled beneficiary must survive the Intestate and reach age 18 to inherit.
- If they are already 18, they immediately inherit absolutely.
- Until then, they only have a contingent interest.
What is the Substitution Limb of a Statutory Trust?
If an entitled beneficiary dies before the Intestate, their own Issue can inherit in their place, provided the Issue satisfies the Contingency Limb.
AEA 1925 — s. 47.
This would also apply in the rare scenario where a beneficiary survives the Intestate but subsequently dies before attaining a vested interest.
Read §33 allows for Substitution for Children and Grandchildren in the Testacy context.
If the Spouse is not entitled to appropriate the Marital Home, what may they do?
Submit an election to the Intestate’s representative to by the Intestate’s share of the home from the Estate using funds they are entitled to from the Estate.
If their entitlement is lower than the value of the Intestate’s share, the difference must come out of their personal funds.
