Property passing outside the succession estate Flashcards
what assets will be distributed?
the deceased’s ‘succession estate’
this comprises of all property D beneficially owned at the date of their death capable of passing via will or intestacy rules (minus debts, liabilities, and administration expenses)
what assets will pass outside the succession estate? (9)
(1) donationes mortis causa
(2) Discretionary pension scheme benefit
(3) Life assurance policy written in trust nominating another person
(4) land held as beneficial joint tenants (assume JT if no TiC restriction on proprietorship register)
(5) joint bank accounts held as beneficial joint tenants
(6) statutory nominations max £5,000
(7) D was a life tenant under a life interest trust - trust property does not pass to D’s estate on D’s death
(8) D had a contingent remainder interest in a life interest trust which did not vest because D did not fulfil the contingency (eg, contingency of surviving life tenant/ attaining certain age)
(9) Any discretionary trust were D was a potential beneficiary
what assets will pass inside the succession estate? (4)
(1) D had a vested remainder interest in a life interest trust (with no contingencies) = asset is then held on trust by the trustees for whoever is entitled under the intestacy rules or will and is not dealt with by the PRs
(2) life assurance policy not written in trust ie, simple life assurance policy
(3) share of house held as tenants in common
(4) all other property owned at date of death
what is a DMC? what are the 3 requirements of a valid DMC?
a gift made during D’s lifetime in contemplation of death
3 requirements for a valid DMC:
(1) the gift is made because the donor believes they may die immediately of a particular cause
(2) the donor makes clear that the gift is conditional upon them dying and the property will revert to them if they survive
(3) the donor either parts with the property or something representing ownership of it
it will be valid and pass to the donee and not form part of the succession estate
when will pension scheme benefits pass outside the succession estate?
if the deceased was a beneficiary of an employer’s discretionary pension scheme benefit then payments made by trustees are not included in the succession estate
this is even if the deceased nominated a third party to receive benefits after their death because trustees still have discretion
when will life policies pass inside vs outside the succession estate?
Life assurance policy written in trust nominating another person DO NOT pass to the succession estate
(the proceeds of the policy will vest in the nominated beneficiaries on the insured’s death)
simple life assurance policies do pass in the succession estate
which types of jointly held property pass inside vs outside the succession estate?
land held as beneficial joint tenants will pass outside the succession estate
the deceased’s share of land held jointly as beneficial tenants in common will pass inside the succession estate
land held solely will pass inside the succession estate
how do you determine whether jointly held land is held as beneficial joint tenants or tenants in common?
look at the proprietorship register in the land registry for a tenants in common restriction
- if there is no restriction then assume joint tenancy
- if there is a restriction then it is held as tenants in common
what types of trust property will not pass (3) vs pass (1) to a deceased’s succession estate?
not pass:
(1) D was a life tenant under a life interest trust - trust property does not pass to D’s estate on D’s death
(2) D had a contingent remainder interest in a life interest trust which did not vest because D did not fulfil the contingency (eg, contingency of surviving life tenant/ attaining certain age)
(3) D was a beneficiary under a discretionary trust
will pass:
(1) D had a vested remainder interest in a life interest trust (not contingent on outliving the life tenant) = asset is then held on trust by the trustees for whoever is entitled under the intestacy rules or will and is not dealt with by the PRs
is cash in a jointly held back account part of the succession estate?
no - assume joint accounts are held as beneficial joint tenants so it applies by survivorship
