Laws Of Intestacy Flashcards
How do the laws of intestacy work?
Spouse and issue- first £250,000 plus chattels, plus joint assets to spouse and half of the rest.
Spouse, no issue gkids or great gkids- spouse takes the full amount
No spouse survives
go to issue- if none
go to gkids but if none
go to parents- if none
go to brothers, sisters, nieces and nephews
if none, eventually to the Crown
3 basic principles of a will?
It must be in writing
It must be signed
It must be witnessed by 2 or more in the presence of the testator- attestation
how is a will revoked?
making of a later will
on marriage
or destruction by the testator with the intent to revoke it
How can a will be varied where an individual inherits property and wishes to revise the terms?
Deed of variation
must be signed by all those that have been affected
done within 2 years of death
have no consideration for money or money’s worth
how to set up a tenancy in common?
informing the other partner by letter and giving notice to the land registry
Max number of tenants is 4
Tenancy in common- on death is the share of property forming part of the estate for IHT purposes?
Yes
what is an immediate post death interest within a will?
It is an interest in possession trust arising under a will sometimes called a life interest trust
How does an IPDI work?
it gives the beneficiary/tenant the right to enjoy an asset or the income from it usually within their lifetime or sometimes a fixed period. It could end due to trigger circumstances such as remarriage or entering care.
common uses of an IPDI trust?
allow a widow to remain in their home and on death to pass to their beneficiaries. Usually used where there are kids from another marriage.
benefits of an IPDI for IHT?
it could keep a property out of reach for care home funding.
they remain in the estate of the life tenant & does not negate the transferable nil rate band if applicable, but being in a trust they are protected.
how are assets assessed in IPDI for IHT?
even though the property does not belong to the life tenant for IHT purposes they do. Asset added to estate on death and IHT due if applicable.
What is a deed of variation disclaimer?
How does it work?
It allows a beneficiary under a will or trust to avoid inheriting a property as long as it has not yet been accepted-usually where the original terms of the will were not tax efficient.
to be valid it must be full disclaimer not partial
it must be irrevocable
it can be unilateral
communicated in writing to person administering the estate.
If executed the property passes back to the estate and is distributed in accordance with the will or laws of intestacy
Describe a Discretionary Will Trust?
Very common before the transferable nil rate band was introduced in 2007.
they allow a spouse to leave their estate up to the value of the nil rate band. the surviving spouse can take a loan from it which is repayable on death. It therefore reduces the IHT payable on the estate.
Same rules as discretionary trusts in terms of charges and exit costs and IHT over the nil rate payable at the rate of 40%
