Taxation Wills and intestacy Flashcards
What are the four parties to a will?
- The Testator (the person making the will)
-The executor (the person administrating the estate)
-The beneficiary (the person to benefit from the will)
-The witness (2 witnesses that do not benefit from the will)
What conditions need to be met in regards to the testator for the will to be valid?
- aged 18 and over
- sound mind memory and understanding at the time of making the will
-Intention of the will (due to fear or under duress)
What further requirements will validate a will ?
- Will be invalidated if the testator marries after making the will unless specifically stated that “the marriage was anticipated and to not revoke the will”.
- a will must be written
- dated to avoid problems
- the will must include clear statements
What to the will during a divorce.
- former spouse is eliminated from will unless specifically stated to keep the entitlement.
- the ex spouse is treated as if they had died and their share goes back to the beneficiaries.
- if there are no beneficiaries then the laws of intestacy would apply.
What are the 3 types of wills
- Mirror wills (couples will leave the will to each other and if they die together the will is left to the beneficiaries usually children.)
- mutual wills (both parties make similar wills that can be altered mutually before death but cannot be challenged after death.)
- codicil wills (allows for small changes in a will without creating a new will.)
Intestacy terminology
- ‘Absolutely’ – the beneficiary owns the assets and can do with them as they wish. If the beneficiary is below the age of 18 at the point of inheriting, the assets must be held in trust for them until they are 18.
- ‘Issue’ is the term used for children of the deceased.
- ‘Remoter issue’ refers to grandchildren, great‑grandchildren and so on.
- The word ‘spouse’ includes civil partners but not common‑law partners.
- Chattels’ is defined as all tangible movable property except money, property
used mainly for business purposes or property held solely as an investment.
Can you write a summary tree for the rules of intestacy?
what would happen if the deceased leaves both spouse and children?
-the spouse gets the deceased’s personal chattels plus the first £322,000 of the estate absolutely
-the spouse also receives half of the balance of the estate absolutely, with the children receiving Intestacy the remaining half of the balance absolutely in equal shares. If a child is under the age of 18, their share will be held in trust until they reach the age of 18
Barry was divorced and had no children; he died without making a will. His
parents, now dead, also divorced before having any more children, although his mother Anne went on to marry again and had a daughter, Grace, who had one son, Andrew. Both Anne and Grace died in recent years, but Anne is survived by her husband, Ron, and Grace is survived by her partner Gary and her son Andrew.
Who would inherit Barry’s estate?
Andrew
- The answer is Andrew. As Barry’s parents are dead and he had no full siblings, we move on to his half sibling Grace. She is dead, so it would pass to Andrew, who inherits his late mother’s rights. Neither Ron nor Gary have rights as Ron is an ‘in‑law’, and Gary is not related to Barry.
What are the two ways someone could change a will?
-A beneficiary can reject a bequest through a written disclaimer.(needs to be written within 2 years)
-Deed of variation (if everyone is in agreenment to change the will)
Explain what is meant by a testator’s mental competence.
They must be aged 18 or over and be sound of mind, memory and understanding at the time of making the will.
What is the legal position when a marriage occurs after a will is made?
A will is automatically revoked on the testator’s future marriage, unless the will was written in anticipation of marriage. This means it must use wording that makes it clear that the marriage will be to a specific named person, will take place in the foreseeable future and should not revoke the will.
Leilani wants to make a few small changes to her will, but she does not want to write a new one. How can she do this and what requirements apply?
she could write a codicil to her will. It must be attached to the will as an additional page and be witnessed by two people
Marek died leaving his wife, Mirka, and two children, Karol (19) and Elena (15), but no valid will. His personal estate was valued at £650,000, and he owned a property, worth £500,000, on a joint tenancy basis with Mirka.
How will the estate be distributed?
Mirka will receive £486,000 absolutely: £322,000 + £164,000 (half of the balance over £322,000). The children will receive £82,000 each, but Elena’s share would be held in trust until she is 18. The property is held on a joint tenancy basis, so will pass automatically to Mirka.
Explain what a deed of variation is and the rules that apply.
A deed of variation is used to change the terms of a person’s will after their death to suit the beneficiaries, either for distribution of the estate or to mitigate IHT.
The rules are:
- it must not be made in exchange for a consideration (ie money or goods);
- all beneficiaries adversely affected by the variation must be 18 or over, of sound mind and in agreement. If the ‘vote’ is not unanimous, then the deed cannot be executed as proposed. Those adversely affected by the variation must sign the document. If an affected beneficiary is under the age of 18, the court will need to decide if the variation can proceed based on the best interests of the minor.
