Succession Estate and Intestacy Flashcards
What kinds of property do not pass under the succession estate?
DMC
Discretionary pension scheme benefits
Insurance policies written in trust [life insurance - lump sum payment]
Statutory nominations
Property held as beneficial joint tenants
Other beneficial interests under trusts / property held in a trust
These assets can be dealt with before grant of representation obtained
Conditions for a valid DMC?
Cain v Moon
Imminent contemplation of death
Gift conditional upon dying
Some way of parting with dominion
What does a discretionary pension scheme look like and when can the benefit be released?
Nomination of a 3rd party via an expression of wish form
Benefit is released on production of a death certificate
When is the benefit of an insurance policy written in trust released? When is an insurance scheme written in trust?
Production of death certificate
Written in trust under the following:
- Benefit of spouse / children via S11 MWPA
- Benefit of a nominated 3rd party
- Into an existing trust for benefit of named beneficiaries in trust deed
What conditions are there on statutory nominations?
Under £5,000
Friendly Society
Industrial Society
Provident Society
Why does property held as joint tenants not pass to the succession estate?
‘Share’ of property passes via survivorship so does not enter succession estate
Homes and also bank accounts
What does “other beneficial interests in a trust property” entail?
Life tenant under a life interest trust - the life interest does not form part of the succession estate
If the remainder interest is vested in interest, trustee can hold for the life tenant for life, remainder to those entitled under remainderman’s will.
What happens on intestacy?
Personal representatives hold the undisposed of property on trust, with a power to sell under S33 Administration of Estates Act
Summarise the intestacy rules if deceased leaves spouse and issue and spouse / CP survives by 28 days.
Spouse receives:
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 payment is made
One half of the residue (if any) absolutely
Issue receives: One half of the residue (if any) on the statutory trusts
What happens if a spouse and issue survive deceased, but spouse dies BEFORE 28 days?
The intestacy rules apply as if the deceased was not survived by their spouse - so issue inherits the whole succession estate on the statutory trusts.
What are the statutory trusts?
Trusts created automatically on intestacy, as long as certain conditions are met.
Contingency Limb and Substitution Limb
Statutory trusts: What is the contingency limb?
Each beneficiary must survive the intestate and reach the age of 18
Until this - interest is contingent
If on death, B is 18+ already, the interest is immediately vested.
Statutory trusts: What is the substitution limb?
A beneficiary’s own issue can inherit in their place if the beneficiary has died before the intestate died, provided that they are 18 and satisfy contingency limb.
What is the distribution order where the intestate dies without leaving spouse / civil partner or issue?
- Parents
- Siblings of whole blood on the statutory trusts
- Siblings of half-blood on the statutory trusts
- Grandparents
- Uncles and aunts who are whole blood siblings of a parent on the statutory trusts
- Uncles and aunts who are half-blood siblings of a parent on the statutory trusts
- The crown – bona vacantia
If there is more than one person in each category - bona vacantia
Whole estate goes to person first eligible - not split
Are personal representatives obliged to give chattels and statutory legacy?
Chattels - YES
Statutory legacy - NO
What exclusions are there from the category of ‘personal chattels’?
Money / securities for money
Property used by the intestate at their death solely / mainly for business purposes
Property held at the death of the intestate solely as an investment - interpreted strictly
If a marital home was in only the deceased’s name, and the surviving spouse wants it, what can they do?
Elect to appropriate the home in full or partial satisfaction of the statutory entitlements
Done in writing to personal representatives within 12 months of date of grant
Home valued on date of appropriation
Consent of court needed if: home if only part of a building owned by the deceased or home is part of a farm or other business premises.
How can a PR find out if a home is held as joint tenants or tenancy in common?
Restriction on the register in charges register
Also should investigate whether co-owners have changed the way they home tenancy during their ownership
Who should execute the transfer deed in both joint tenancy / tenancy in common?
- If all co-owners are living – they should all sign contract and execute the transfer deed
- If a beneficial joint tenant is selling property asked to sign the contract and execute the transfer deed
- If a beneficial tenant in common is selling appoint a second trustee (often solicitor) to sign contract and execute transfer deed with them
Who is included in “issue” and who is not?
Children, grandchildren, great grandchildren, etc.
Includes adopted children but NOT stepchildren unless they are adopted by the intestate
