PROBATE SPA and PFA Flashcards
SPA A
Writing - advise will provisions and IHT
Client: Javgral Laxman
Matter: His late wife Alvira Laxman
Copy of will:
£1 million main residence as beneficial JT
£200,000 cash savings
£150,000 quoted shares
8yrs ago Alvira gifted £350k property to 2 children, continued to use property
50% share of three residential investment properties; the other 50% is owned by her sister
Kavita Bedi. Beneficial TIC. £550k Alvira share
£280,000 personal pension plan
discretionary trust, with a nomination by Alvira in favour of her husband and children, Dilip and Yashapl.
£300,000 life assurance policy for Javgral
Alvira’s will left her entire estate to be split equally between her two children, (Javgral being sufficiently
wealthy in his own right).
Alvira had never made any other lifetime gifts, nor been married befor
1 An explanation of how Alvira’s assets pass on her death;
2 An explanation of which assets will be liable to inheritance tax as a result of Alvira’s death; and
3 An estimate of the inheritance tax payable (funeral expenses and debts to be confirmed later – ignore them
for the purposes of this estimate).
- Explain Alvira will deal with assets
Executor role to administer
Other assets pass seperately outside will
Assets passing OUTSIDE will:
Main residence
JT = automatic pass to surviving JT
Pension scheme written in trust
Fund value not form part of estate
Nominated beneficiaries - type of trust where trustees discretion to split
Life assurance held in trust for benefit and payment by insurance comapny
Lake District property
Assets dealt with by will
Cash savings
Shares
Half share residential investment property
Explain first pass to executor
After settle tax and debts then pass to beneficiaries - children Dilip and Yashapl
- Which assets liable to IHT
NOT pension plan and life assurance policy
Half main residence exempt as spouse
Remaining assets incl Lake District as significant benefit, used whenever wanted
Cost of funeral and debts can be deducted
- Estimate of IHT
1250k
where
325k nil rate band
Remaining 925k at 40% = 370k
Next steps
Make app for grant of probate
IHT pay - in touch shortly
Details of debts and funeral expenses
SPA C
Drafting - draft a will
Miss Marjorie Elsie Robinson - Will
Aged 75, never married
3 specific items to certain individuals
Remaining to nephew, nieces, their children
No lack of mental capacity
300k Holly Bush Cottage
50k investments
Main income of pension as retired teacher
State pension
Emerald Ring to Karen
Ruby Ring to Judith
Rosewood sideboard to neighbour Jack Jones
If niece or nephew die before then go to their children, and should reach age 21
Typical will structure
o Introductory words – this is my last will..
o Date – include top of will
o Revocation clause – if made will previously then need to expressly revoke
o Disposal of body
o Executors/trustees – potentially tested to draft will with trust (contingency, life interest, discretionary)
o Guardians
o Non residuary
o Residuary gift – identify everything at date of death; don’t label individual gifts
o Administrative provisions – powers for executors and trustees
o Attestation clause – raise presumption with registry that followed right procedure
o Signed by two witnesses
SPA F
Interview/Attendance Note
Client Katy Spencer rang me today
Estate of her late husband Thomas Spencer who died 3 weeks ago
Will when married to Jane Spencer, but divorced 30 years ago
- Who will act as PR?
- How estate distributed?
- Overview of impact of IHT?
- Next steps
Interview:
Admin estates
* Client details
* Details deceased
* Circumstances of death – if Alzheimer’s then consider mental capacity
* Funeral/death certificate
* Will? Valid? Contents?
* Intestacy rules?
* Family details – help draw fam tree?
* Assets – what? How owned? Value?
* Liabilities
* Gifts w/ 7 years?
* Any potential family provision claims?
Assets
-Current a/c - joint = survivorship
-Family home - 400k in T’s sole name
-T personal belongings
-Quoted shares and bonds
-Life policy
-Assets passing under own rules
-No lifetime gifts
Advised
1. How assets pass - intestacy
2. Who deal with T’s estate - K + probably another ?
3. IHT - rough idea, spouse exempt/NRB
4. What happens next - assets, liabilities, death cert, funeral costs, if Katy can act alone as admin
Attendance Note
-Format (Client, Matter, Date of interview, Background and facts
-Attached handwritten interview notes re client details, deceased, family information, assets
Advice required by KS:
1. Who administer estate and whether can do so
2. How estate distributed
3. Estimate IHT
4. Next steps
Preliminary advice
Thomas made will when married to ex wife - revoked on marriage to KS
TS not made another will so no valid will therefore intestate
Anything held jointly pass to Katy by survivorship
Other assets intestate (personal belongings, property, quoted shares, life policy as not written in trust)
Surviving relatives KS - if survive 28 days from Thomas death and issue
KS takes 10k personal belongings and 322k statutory legacy
Half of remaining 548k = 274k
Total of 606k
KS right to ask PR for matrimonial home 400k appropriated to her in part satisfaction
Other half 274k divided equally between 4 children (Adrian, Belinda, Christopher, Diana)
Diana predeceased KS, George and Harriet take share on statutory trusts equally between them, each having reach 18
If house appropriated, KS get 400k house, 10k chattels, 196k balanace of entitlement
Total 606k and issue get 274k
Who act as PRs?
KS entitled as surviving spouse
2 PR required as minority interest in residue
Thomas’ children next entiteld to grant - suggest KS and Christopher, act as trustees of continuing trust for George and Harriet until 18
IHT
880k estate
KS spouse exemption so 606k not taxable
274k taxable estate passing to non-exempt beneficiaries
TS full 325k NRB avaialble
No IHT payable as result
Next steps
Valuation of assets
Surveyor instructed to value 45 Beechwood Avenue
Katy wish appropriate to her in part satisfaction of overall entitlement
Client speak to other beneficiaries to see who else willing to take up role as PR, particular Christopher
Client provide debt + funeral expenses details
Prep papers to app for Grant of Letters of Admin
SPA P
Research
meeting with John Stubbs and his sister Sarah Smith regarding their late father, Wilfred Stubbs, who died last week.
John and Sarah appointed executors
Will witnessed by neighbours
Sealed envelope typed “Will of Wilfred Stubbs” WS
Inside Will
Attestation area 2 signatures of neighbours
No signature of for Wilfred
Neighbours stated Wilfred showed envelope with typing and stated “put together docs as will”
Printed “in the presence of witnesses”
Wilfred sealed and stated “done, feel happier”
Research whether the document John and Sarah gave me could be regarded as
a valid will for Wilfred.
Advice
Set out what was asked to research
Facts summarised
Set out legislation for will to be valid
Set out issues
- Does typed name constitute signature?
- Does fact envelope and not body of will indicate intended signature give effect?
- Was signature made or acknowledged in presence of 2 witnesses
- No definition
- NO requirement signature at end of will
- Evidence where Wilfred initialled envelope before witness signed - signed in presence of 2 witnesses who then signed presence
If know legislation, apply first
Otherwise, look at secondary sources
SPA Q
Case and Matter Analysis
Clients Danny Clay and Marion Burton
Potential claim against father Henry Clay, died 2w ago, aged 75
Henry was married to Danny and Marion’s mother, Susan Clay, for about 30 years until 2005 when they were divorced
catalyst for the divorce was Henry forming a relationship with Natalie Potter, a teacher who was 30 years younger
Henry and Natalie married in 2007, and were still married when Henry died. They had no children. Susan died
Danny and Marion told me that from about 2016 Henry showed signs of forgetfulness, and he was diagnosed with Alzheimer’s Disease.
This was monitored during the years before his death, which was caused by cancer.
After Henry’s death, Natalie showed Danny and Marion a will apparently made by Henry in 2018.
prepared by a solicitor from Davies and Co LLP
Henry left his entire estate to Natalie and appointed her as executrix. The existence of the will came as a surprise to them. They were in regular contact with their father, and he
mentioned the will to them. They could not think of any reason why he would disinherit them.
Danny is aged 38 and is a manager for a building company. Marion is 36 and is an estate agent.
I said we would consider steps to be taken next, and possible claims against the estate.
Advice and analysis required
Could you please prepare a report indicating possible actions Danny and Marion might take, together with the further information we would need to be able to advise fully.
Two actions
1. Questioning the validity of the will
2. Making a claim under the Inheritance (Provision for Family and Dependants) Act
1975
- Questioning the validity of the will
The will could be invalid if:
* The formalities of s9 Wills Act 1837 were not complied with;
* It was prepared in suspicious circumstances;
* There was undue influence; and
* Henry lacked testamentary capacity.
As the will was prepared by a solicitor, the first two reasons are unlikely to be
relevant. There is also no evidence of undue influence, which is a difficult claim to
sustain.
In view of the fact that Henry suffered from Alzheimer’s disease, there must be a question mark over his testamentary capacity.
Further information required:
* Medical evidence of Henry’s tests evidencing his deterioration;
* Evidence from the solicitor who prepared the will, including any medical evidence obtained at the time; and
* Should we enter a caveat to prevent Natalie from obtaining probate?
- Making a claim under the Inheritance (Provision for Family and Dependants) Act 1975
If the will is accepted as valid, the other claim would be to contend that the will did not make reasonable financial provision for Danny and Marion. This would be on the basis that they are children of the deceased. Adult children with no particular
financial or other needs find it difficult to succeed under the Act. In the absence of any further factors Danny and Marion would seem to face a difficult task. The relative needs of the parties involved would have to be weighed up.
Further information required:
* The date of a grant of probate, if any, which determines the start of the six
month time limit for bringing a claim;
* The size and assets comprised in Henry’s estate;
* The financial resources and needs of Danny, Marion, and Natalie;
* Whether there is any physical or mental incapacity of Danny, Marion or
Natalie; and
* Any moral obligation that Henry owed to Danny, Marion, and Natalie. For example, who looked after Henry during his illness?
PFA
Writing
Quick facts
* Jennifer, James children
* Father William
* Funeral to take place
* Wife Helen died May 2020
* 1/3 Jennifer 1/3 James 1/3 grandchildren Chloe and Daniel contingent 25
* Jennifer and James as executors and trustees
Property
* £400k The Hollies house
* £200k Cash accounts and stocks and shares
* Helen estate – ½ Hollies to William by survivorship; rest £100k under will
* Both no lifetime gifts
Structure
Background facts
Summary of legal issues:
Statutory references in square brackets - avoid in client letter
- IHT position. Application of transferable nil rate band of £325,000, and transfer of
residence nil rate band of £175,000 from spouse Helen. No IHT payable on William’s estate. - [Application of Trustee Act 2000] The need to invest in accordance with the standard
investment criteria as regards suitability of investments, requirement to take investment
advice, and the need to diversify. You were told that the firm had no expertise in financial
services, therefore no-one has the necessary competency to give specific advice on
investments for the trust fund. You could offer to direct the client to a suitably qualified third
party. [NB You did not need to consider FSMA here. Remember that even if the firm can
benefit from the exemptions/exclusions on providing a regulated activity under FSMA, it must
still have the necessary competence and expertise to advise under the Conduct Rules]. - [Application of s31 Trustee Act 1925]. Power of maintenance of beneficiaries. Chloë is over
18 and entitled to the current income from her share. Daniel is under 18 and maintenance is
at the trustees’ discretion. - [Application of s 32 Trustee Act 1925]. Power of advancement of capital for benefit of
beneficiaries. Daniel not as yet able to give a valid receipt. - Responsibilities of joint executors – The need to act in good faith and in the interest of the
estate. Joint and several liability. The acts of one binds the other and the estate. - Executors are personally liable to any unpaid creditor unless they place an advert in The
London Gazette and other appropriate publications. Executors should also carry out searches
for land held for creditors and bankruptcy declarations against the deceased and any adult
beneficiaries.
