Probate Knowledge Flashcards
What is a codicil
Amends or revokes existing will
Who bears the burden of proof as to knowledge and approval of the will
He who seeks to propound it ie administer
Presumption of knowledge and approval if has testimentory capacity. What are the exceptions?
- Blind - needs evidence
2. Suspicious circumstances
What is the test for capacity?
- Testator understands the act and its affects
- Testator comprehends the claims
- No poisoned mind
What if testator becomes ill between instructions and execution?
Must pass the following:
- When executing, did the testator remember and understand the instructions given
- If the clauses had been reminded to the testator, would they have understood
- Was the testator capable of understanding and understood was executing a will made on instructions?
The burden is on the propounder to prove capacity. What are the rebuttable presumptions?
- If appears rational
2. Mental states presumed to continue
What property falls outside of the will?
- joint tenants - passes by survivorship. Inheritance tax to be paid by PRs but can claim against the joint tenant
- insurance
- trusts
- pension schemes
- nominated property eg. old NSI
- gift in contemplation of death
- life interest
Is a gift to an executor condition?
Yes - on taking up appointment, but rebutted if described as relation or friend, or as mark as respect
When does the will ‘speak’ from?
Death - so references in time are at the time of death unless otherwise stated, but only for property
What are the formalities for the creation of a will?
- writing
- Signed by testator or another in their presence and on their direction
- appears from signature that intended to give effect to the will
- signature made in presence of 2 witnesses
- Each witness attests and signs in presence of testator
What if there is no attestation clause?
Must prove due execution by affidavit of the witnesses
How is a will revoked?
- New will or codicil
- Burning/tearing
- Marriage, unless contrary intention
What if there is a divorce after making the will?
The effect of a divorce is that provisions as to appointment of former spouse as executor, trustee or beneficiary take effect as if they were dead on the day of the divorce, unless the contrary is shown
Alternations to a will
Ineffective unless signature/initials or testator and witnesses near alteration
What is the order if dies intestate?
- Surviving Spouse (not divorced) if survives 28 days.
Post 2014: Personal chattels to spouse; 250k plus BoE interest tax free; if residue is <250k all to spouse; half of remainder; any balance to children contingent on marriage/18.
Then:
- Children on statutory trusts
- Parents
- Brothers and sisters (whole blood/half-blood)
- Grandparents
- Uncles and aunts (whole blood/half-blood)
- Crown.
If predeceases intestate but has children, children take the share on trust (contingent on reaching 18/marriage)
What are the primary areas for the solicitor to consider for PRs?
- Tax
- Obtain grant of representation
- Is the will valid?
- Drafting the appropriate oath
- HMRC account/return estate information
- Preparation estate accounts
When is a grant of probate not required?
- Not through PR transfer: joint tenants, nominated property, life policy held in trust, pension, life interest
- Investments less than 5k, eg. NSI, civil service pensions, building society,
- Cash
- Personal chattels
Form IHT 205 or IHT 400?
205 - if excepted, 400 otherwise
When is the estate excepted?
- Died domiciled in UK
- No chargable transfers, except for cash/shares/land under 150
- Single trust less than 150k
- Foreign assets are less than 100k
- No gift with reservation of benefit
- Gross value including jointly held assets + excepted transfers is no more than: nil-rate, twice the limit plus IHT 217, 1m, with net charable estate is not more than exceeding inheritance nil-rate
What are the requirements for the installment option
- land
- business
- shares giving control
- unquoted shares if at least 10% and over 20k value, or undue hardship, or over 20% of the tax on the overall estate.
What happens if difficult to sell property is sold
All tax and interest is payable
When is tax payable?
Upon delivery of IHT400. Resolve: money from bank account
What is required to get a grant of probate?
- Oath
- Will and codicils, and 2 x A4 copies
- Reunciations of executorship
- If excepted - IHT205
- If not excepted - IHT 400
- Affidavit evidence, eg. if no attestation clause
- Fee
What are the types of grant of probate?
No will - letters of administration
Yes will - probate if executors, otherwise letters of administration with will annexed
Can an executor decline?
Yes, as long as not accepted. Can reserve powers.
Is an oath required for grant of probate?
Yes - oath for executors, oath for administrators with will etc.
How many administrators needed for life or minority interest
- Court can dispense, no more than 4.
What should happen in the oath for grant of letters of administration with will attached
Should explain why no-one else has higher priority
What should be in the oath of grant of letters of administration
Should explain why no-one else has higher priority. Broadly follows intestacy line
Is notice required to equal applicants to grants of letter of administration?
No
Is a will without attestation clause valid?
Yes - but need affidavit from both witnesses confirming deceased signed the will in front of both of them at the same time and they each signed in her presence
IHT - calculating price of shares
Lower of 2 x quotes plus 0.25 of the difference
When is the charitable rate applied
36 if greater than 10% estate left to charity
If mixed, how to tell which can be paid by installments?
Take the property as a percentage of tax due, ie. property value divided by total (not including gifts) times the tax due
When is IHT due
At time of grant, except installments
If inheriting property
don’t forget 100k residence to children
What happens if partial intestacy?
Divide equally according to intestacy rules, eg. to children/siblings. NB different if have children/grandchildren
What happens if leave to brother who has died has children?
Unless there is contrary intention, where left to children/grandchildren and they die before the testator, their children get it automatically
For claim for maintenance - what is the test?
Have to show that reasonable financial provision had not been made for maintenance. Letter of intent?
Is VOID effect validity?
No - revoked by burning, tearing or destroying, with intention
If partial intestacy
Son and daughter - equal shares under s46 Administration of Estates Act 1925
Claim for provision under which statute
Inheritance (Provision for Family and Dependents) Act 1975
Letter introduction
Refer to meeting, and purpose of letter
If will doesn’t specify shares, what does this mean?
Need to know types of shares - could fail if cannot ascertain
Timing of death - how much certainty
IF it cannot be ascertained - if can ascertain death don’t have to apply rule
Both die at same time: rule for survivorship and IHT
s184 LA 1925 - if die at the same time, younger presumed to survive the older
IHT: treats as if died at same time
If die simultaneously what on IHT
BOTH nil band’s are available ie 650k
If no conclusive proof of time of death, what applied?
IF cannot ascertain, court decides on balance of probabilities
Probate IVE
Ensure plan of action: will confirm advice in writing and client will provide anything they have. Ask for paperwork. client care: proof of ID.
Check death registered, copy certificate will, ensure no more recent will
Property valuations
IV Shares - what to ask
Take over? Value? Change of name might allow gift to survive
Probate IV checklist
Introduction What will happen in IV Client care Costs Notes Name, address, contact details Copy death certificate Contact details PR's Is there a will? What steps taken Details assets: property, shares, pension Details liabilities Family tree and beneficiaries Lifetime gifts Dependents who might make a claim Payment of funeral account IS THERE ANYTHING YOU'VE NOT MENTIONED WHICH MIGHT BE RELEVANT
LAYOUT FOR NOTES
- Questions 2. Next Steps us, next steps client. 3 Advice given
Summary of process for grant of probate
Step 1: Establish who the executor is, or if there’s no will, go by order of priority under the rules of intestacy. We have a guide on Intestacy rules too.
Step 2: Assess the estate as well as compile a list of all the assets, including money and debts.
Step 3: Fill out all the necessary forms as mentioned above and apply for a Grant of Representation. Remember to pay any inheritance tax due!
Step 4: Swear an oath and receive the grant in exchange.
Step 5: Administer the estate and assets. It’s usually best to open a special executor’s bank account separate from your own so you can put all the funds in. Remember to send copies of the grant to any asset holders so you can receive them.
Which form
IHT 205 if no tax, IHT 400 if so
IV property purchase
Think about age of mortgage - offer in principle
Able to buy - sufficient funds
Is price about contents - stamp duty not on contents
How pay deposit - 10%? Can’t go onto mortgage
Don’t forget insurance from date of exchange
Attendance note structure
FACTS
INITIAL LEGAL ANALYSIS
ADVICE TO CLIENT
ACTION PLAN
CLIENT CARE/KYC - Photo ID and proof of address. If not provided, requested.
If haven’t seen eg. lease, provide copy of lease, survey: ensure not occupied, question seller’s solicitor
Client state of mind - included
When can a trust interest be overriding
If in actual occupation or on note. If good reason for non-occupation at time of inspection might override purchase.
When will a lease override?
If more than 7 years, if registered, if not protect by notice or actual occupation
How to protect rights?
On register - notice, restriction if not. Can br p
Does a license bind third parties
No
Option to purchase binds?
Signed, writing contains all terms - estate contract - binds if on register.
Insert into property contract if existing mortgage
Mortgage to be discharged before completion
Problems with terminating commercial lease
Might be able to negotiate surrender
Options if in breach of commercial lease?
- Recover money owed from deposit. Not long term help.
- Debt action against in contract. Separate proceedings, country court, interest
- Bring insolvency proceedings against tenant. Greater 750, 21 days, service statutory demand.
- Commercial Rent Arrears Recovery - allows to take control of goods and sell. 7 days notice (court can reduce if goods moved risk) + certified enforcement agents. Only for rent. Only wholly commercial. Written lease. 7 days to pay. MEANS CANNOT FORFEIT. Personal/key business goods exempt
- Forfeiture of lease. Check if allowed under lease - may allow without notice/formal demand. Peaceable entry - possible criminal offences - they can apply for relief. Still pursue debt. Could be vacant.
- Neogiate surrender
- Pursure previous tenant under AGA - if in lease - authorised guarantee agreement. 6 months if fixed charge. Target can get overriding lease to help them.
