Session 1 Flashcards
What is intestacy?
This is the rules that govern the distribution of a succession estate if the deceased died intestate S46 AEA 25.
Died intestate: died without a valid will, or died partially intestate- had a valid will, but the will doesnt dispose of all of the estate
Statutory trusts as per s 47 of the Administration of Estates Act 1925 apply to all beneficiaries except the deceased spouse, parents and grandparents. This sets out the terms on which the beneficiary inherits and comprises the contingency limb and also the substitution limb
What happens under the contingency limb?
Under the contingency limb, a beneficiary must both survive the intestate and reach the age of 18, until then a beneficiary has only a contingent interest on their share of the estate and is held on trust until that contingency is satisfied.
What happens under the substitution limb
If the beneficiary dies before the deceased, the share they would have inherited would pass by substitute to their own children.
What happens if a beneficiary predeceases but leaves no issue?
The share they would have received is redistributed with reference to the surviving family members of the original intestate
What other rules are there around intestacy?
Issue: means children, grand children, great grandchildren etc (+those conceived but not yet born)
Adopted children are issue of their adopted (not biological parents). Step-children (or those treated as children) are not included unless they were legally adopted by the intestate
There are special rules re spouse/civil partner:
28 day survivorship rule
Right of appropriation of family home (irrelevant if house is owned as joint tenants)
The amount for distribution is the Net estate- after all debts/liabilities paid.
What is the rule if the intestate leaves a spouse and an issue?
Spouse:
Personal chattels absolutely
Statutory legacy of £322,000 free of tax and costs plus interest from the date of death to the date on which the payment is made
One half of the residue (if any) absolutely
Issue:
Other half of the residue (if any) on the statutory trusts
If net estate and chattels is worth less than £322,000, the spouse will inherit all.
What is the definition of personal chattels?
s55(1)(x) AEA defines chattels as:
tangible movable property except:
1) cash,
2) assets used at the date of death solely or mainly for business purposes
3) assets used at death solely as an investment (some personal use means the item is a chattel, even if the deceased purchased the item hoping it would increase in value)
What are the requirements for a valid will?
Validity:
1) requirements of testamentary capacity (banks v goodfellow and parker and felgate) , intention and execution
2) presumption of knowledge and approval where the will is duly executed, the testator had testamentary capacity and the testator signed their own will having had the opportunity to read it
To check if validly executed, must refer to s9 of the Wills act 1837- in writing, signed by the testator or by someone else in the testators presence and by the testators direction. It should also appear that the testator intended to give effect to the will by their signature. This must be made or acknowledged by two witnesses at the same time. Each witness either signs the will or acknowledges their signature in the presence of the testator, but not necessarily in the presence of the other witness
a will is made of dispositive and non dispositive clauses:
Non-dispositive- clauses appointing executors etc
dispositive clauses are those clauses which dispose of assets
4 types of legacy:
1) pecuniary
2) demonstrative
3) general
4) specific
other types of dispositive clauses:
1) vested or contingent on the beneficiary reaching a certain age
2) is the gift given absolutely or held on trust
3) differentiate between fixed interest and discretionary trusts
What are some basic rules for wills
Basic rules of construction:
1) class gifts- given to a class of beneficiaries- unless express words to clarify when that the members of that class are identified, the class closing rules will apply (when the first beneficiary in the class obtains a vested interest)
2) the default position for tax is that gifts are made free from IHT but subject to the costs of the transfer.
3) identity of a beneficiary- deemed to speak from the date of execution. For subject matter- default position is item identified at the date of death. Both of these are subject to contract wording in the will. Use of word ‘MY’ changes it to the item held at date of execution.
If item not owned at death, it will be deemed to fail, unless there is a substitution clause.
A gift to a beneficiary who predeceased the testator would fail unless there is a substitution clause. a lapse of a non residuary gift, would pass under the gift of residue instead.
If a residuary gift fails, can pass under intestacy rules
S.33 of wills act provides partial solution- in broad terms, that if you leave a gift in your Will to your child and that child dies before you, if the child leaves issue of their own (children, grandchildren, great grandchildren etc.) they will automatically become entitled to their share of the estate unless a contrary intention appears by the Will.
Certain rules from Wills Act also govern the will:
S15- if a beneficiary or their spouse witnesses a will, the will remains valid but the beneficiary will lose their entitlement under the will.
s18- a marriage revokes previous Wills, although it is possible for a will to be made in expectation of
S18A and C- if a spouse is appointed as executor or makes them a beneficiary but later divorces them- both the executor appointment and gift will fail (treated as pre-deceased)
How can a will be revoked?
s 20 Wills act- may be revoked by the testator burning, tearing or otherwise destroying the will itself provided there is also an intention to revoke a will
Most common form of revocation is an express revocation clause in a later will- I hereby revoke…
S21 WA- looks at alterations, no alteration in a will after execution except in certain cases shall have any effect unless the alteration has been executed as a will
