Introduction to estates Flashcards
What does intestacy mean?
If no will has been left
Intestacy occurs when a person dies without a valid will.
What is meant by succession estate or distribution estate?
Assets capable of passing under a will or by intestacy
What does it mean if someone has died testate?
The deceased’s will covers their entire succession estate
What is partial intestacy?
If the will does not cover the entire estate
What does it mean to be intestate?
If there is no will
What property does not pass under a will?
- DMC
- Discretionary pension schemes written in trust
- Insurance policies written in trust
- Statutory nominations
- Property held as beneficial joint tenants
- Some beneficial interests held under trust
What is Donationes Mortis Causa?
A gift made in contemplation of death.
What are the requirements for Donationes Mortis Causa?
- Gift is made because donor believes they may die imminently.
- Gift is conditional upon donor’s death.
- Donor parts with the property or something representing ownership.
This can include title deeds in unregistered land or filled out transfer forms for registered land.
What are Discretionary Pension Scheme Benefits?
Payments from the scheme are entirely at the discretion of the trustees but are nominated to 3Ps. The deceased is not deemed to have any entitlement to any payment from the scheme. The benefit of the pension scheme can be released on production of a death certificate.
What are Non-Discretionary Pension Scheme Benefits?
When payment is direct to another individual, it does not pass into the estate.
How do simple life insurance policies affect the succession estate?
Simple life insurance policies pass to the succession estate.
What happens if the benefit of a life insurance policy is written on trust for another person?
It does not form part of the succession estate. The insured has no beneficial interest under the policy.
It can be written into trust under s.11 Married Woman’s Property Act 1882 for the benefit of a nominated third party or into an existing trust.
What are Statutory Nominations?
Nominations to the Friendly Society, Industrial Society, or Provident Society.
The amount cannot exceed £5,000.
What happens to property under Joint Tenancy?
Property automatically passes under co-ownership and is not part of the succession estate.
What happens to property under Tenants in Common?
The deceased’s share will pass into the succession estate.
What should be checked for Family Homes?
Check the express declaration of trust to ensure there is no equitable or implied tenancy in common.
What do bank account opening documents clarify?
They clarify if the account is held as beneficial joint tenants.
Unlike family homes, the doctrine of presumed resulting trusts may still apply.
What happens to the beneficial interest of a life tenant under a life interest trust?
It does not pass into the succession estate.
Can a remainder interest survive a remainderman’s death?
Yes, provided it is not contingent on the remainderman outliving the life tenant. It can therefore pass into their estate.
What occurs with legal ownership of a Bare Trust on death of the legal owner?
Legal title will pass temporarily to the PRs while arrangements are made for another bare trustee.
Should the value of assets held in a trust be included in the deceased’s succession estate if they had a beneficial interest in the assets?
Usually, it is not included unless the deceased exercises a power of appointment in respect of trust assets in their will.
What happens to personalty in a succession estate?
It will all pass to the PRs.
What does personalty include?
It includes incorporeal items such as rights of action under legal disputes, choses in action (cheques, shares, bonds), and powers to direct what happens in other trusts.
If there is a restriction on the official copies, what can be assumed?
Assume that the property is owned as tenants in common, but check:
- it is the right type of restriction
- check for severance
What can be assumed if there is no restriction on the official copies?
Assume that they hold as joint tenants
What happens to property on the death of a legal JT?
- survivorship applies if multiple JT owners
- Any TIC restriction will remain
What happens to property on the death of a beneficial JT?
- survivorship will apply
- no restriction is involved
What happens to property on the death of a beneficial TIC?
- No survivorship
- The surviving TIC takes their share of the property
- The other share passes under the will/intestacy rules
If buying property and all co-owners are alive, what is required?
- All co-owners should sign the contract
- All should execute the TR1
If buying property from a surviving beneficial joint tenant, what is required?
- the surviving JT should sign the contract and execute the deed
- They should also provide the death certificate
If buying property from a surviving beneficial TIC what is required?
- they must appoint a 2nd trustee to sign the contract and execute the deed
- they must also produce the death certificate
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