Unit 2

Question 1

When there is uncertainty in a will, what are the 2 basic presumptions that apply?

Answer 1

1) Non-technical words bear their ordinary meaning and

2) Technical words are given their technical meaning

Question 2

What is the basic rule when the courts attempt to establish the testator’s intention?

Answer 2

Court is not prepared to consider other evidence in order to try to establish what the testator intended. If the meaning remains unclear, the gift will fail for uncertainty.

Question 3

What is the exception to the basic rule?

Answer 3

S 21 Administration of Justice Act 1982 – Court will sometimes look at external or extrinsic evidence to ascertain the testator’s intentions.

Question 4

What are the requirements of S 21 Administration of Justice Act 1982?

Answer 4

S 21 permits extrinsic evidence (including evidence of declarations made by the deceased) to be admitted to interpret the will insofar as any part of the will is meaningless or the language used is ambiguous or evidence (other than evidence of the testator’s intention) shows the language is ambiguous in the light of surrounding circumstances.

Question 5

Can the extrinsic evidence be used to rewrite the will?

Answer 5

No – extrinsic evidence is only an aid to interpretation.

Question 6

When does the court’s power to rectify a will occur? (S 20 Administration of Justice Act 1982)

Answer 6

Where a testator’s intentions are clear, but the wording does not carry them into effect (S 20 Administration of Justice)

Question 7

What are the requirements of S 20 Administration of Justice Act?

Answer 7

A court may order that the will be rectified to carry out the intentions if the will fails to carry them out because of:

1) A clerical error; or

2) Of a failure to understand his instructions

Question 8

What is a ‘clerical error’ (S 20)

Answer 8

“Clerical error”= error of a clerical nature, e.g., omitting something by mistake or writing error.

E.g., solicitor wrote ‘one half of my share’ instead of ‘my one half share’ by accident. Written/clerical error.

Question 9

What is a ‘failure to understand’?

Answer 9

= Where a solicitor fails to understand the intentions properly.

Question 10

What is the basic rule for property passing under the will?

Answer 10

Basic rule = The assets are determined according to those in existence at the date of death. Will is said to ‘speak from the date of death’.

I.e., the will is interpreted as if it had been executed immediately before death.

• A gift of ‘all my estate’ takes effect to dispose of all property the testator owned when they died, whether or not the testator owned it at the time the will was made.

Question 11

What is the exception to the basic rule for property passing under the will?

Answer 11

• Will speaks from death unless a contrary intention is shown in the will. Examples of words which show contrary intention:
• ‘present’, i.e., the time when the testator made the will, provided the reference is essential to the description (i.e., the house which I now own).
• ‘my’ + specific asset – when using ‘my’ to denote a specific asset, e.g., my car, it is possible that the court could interpret this as meaning the gift is of the car which the testator owned at the date of the will.
• ‘my’ + general genre of assets – when using ‘my’ with a general genre of asset, i.e., my collection of cars’, then this is taken to mean the cars in the collection at the date of death.

Question 12

What is the general rule for identifying beneficiaries under a will?

Answer 12

General Rule = Where a will references beneficiaries, those beneficiaries are construed as people alive at the time of the will’s execution. I.e., For beneficiaries, the will speaks from execution.

• E.g., if a will contains a gift to ‘Kate’s eldest daughter’, that pertains to Kate’s eldest daughter at the time of execution of the will.

Question 13

Are the terms spouses / civil partners synonymous for identifying beneficiaries?

Answer 13

No.

Question 14

What is S 18 Gender Recognition Act?

Answer 14

S 18 = where the disposition of any property under a will or other instrument (made on or after the appointed day) is different from what it would be but for the fact that a person’s gender has become the acquired gender under the Act, an application may be made to the High Court where expectations have been defeated.

• Court has a wide discretion as to appropriate order to make, e.g., could order payment of lump sum, transfer or settlement of property.

Question 15

What does S 17 Gender Recognition Act offer trustees / PRs in terms of protection?

Answer 15

S 17 = Trustees and personal representatives are protected under s 17 from:

(a) Being under any duty to enquire whether a full gender recognition certificate has been issued or revoked before conveyancing or distributing any property;

(b) Being liable to any person by reason of a conveyance or distribution of property made without regard to whether a full gender recognition certificate has been issued or revoked without the trustee or PR having been given prior notice.

Note – s 17 does not mean that someone cannot “follow the property” into the hands of another person who has received it unless that person has purchased it for value in good faith and without notice.

Question 16

Can a valid will contain invalid gifts which fail?

Answer 16

Yes.

Question 17

What is the effect of a failed gift?

Answer 17

the subject matter falls into the residuary estate and will be taken by the residuary beneficiary; where a gift of residue fails, there will be a partial intestacy and the residuary estate will pass under the intestacy rules.

Question 18

What are the potential reasons for a failed gift?

Answer 18

1) Uncertainty
2) Beneficiary witnesses will
3) Divorce or dissolution
4) Ademption
5) Lapse
6) Disclaimed gift
7) Forfeiture

Question 19

How could a gift fail for uncertainty?

Answer 19

A) If it is impossible to ascertain the subject matter of the gift or the beneficiary of the gifts

– Court will first seek to establish testator’s intentions and consider powers of rectification, but if the meaning cannot be discerned, the gift fails.

Question 20

What is the exception where a gift will not fail for uncertainty?

Answer 20

If the gift is to charity, provided it is clear that the gift is for a charitiable purpose, the court can direct which charity to benefit or use the Cy Pres doctrine.

Question 21

How can a gift fail if a beneficiary witnesses a will?

Answer 21

S 15 Wills Act 1837 = If a beneficiary, or their spouse or civil partner, acts as a witness, the gift to the beneficiary fails.
* The beneficiary/spouse remains a competence witness and so the will is still validly executed, just the gift fails.

• Gift does not fail if it is witnessed by a beneficiaries child/cohabitant or friend.

Question 22

What are the exceptions to a gift failing for a beneficiary witnessing a will?

Answer 22

1) The gift will not fail if the will is validly executed without the beneficiary’s signature (or spouse/civil partner). E.g., if there are three witnesses (one more than is necessary), one of whom is a beneficiary, the gift to that beneficiary is effective because the will is still validly executed even if the beneficiary’s signature is ignored.

2) Gift will not fail if there is a codicil which confirms the original will and which is not witnessed by the beneficiary (or spouse).

Question 23

What is the effect of divorce on a gift?

Answer 23

S 18 A and S 18C Wills Act 1837 = Where after the date of the will the testator’s marriage or civil partnership is dissolved, under S 18 A, the ex spouse is treated as though they had died on the day of the divorce.

Note – S 18A and 18C only apply where a marriage has been dissolved or annulled by the court. I.e., properly divorced. If the couple simply live apart, the gift remains valid.

Question 24

What is ‘ademption’?

Answer 24

A specific legacy will fail if the testator no longer owns them at death. Gift is said to be ‘adeemed’. I.e., property has been sold, destroyed or given away during testator’s lifetime.

Question 25

When a gift changes in nature since the will was made what occurs?

Answer 25

* Court asks: Is the asset substantially the same, having changed merely in name/form, or has it changed in substance? * Only if there is a change in substance, will the git be adeemed. i.e., if a property is stolen (i.e., a painting) and then the testator gets insurance pay-out, the property is changed in substance to cash and they get nothing.

Question 26

When a gift is substituted for something else what happens?

Answer 26

Where testator disposes of the property originally referred to in the will (i.e., a piano) but it is replaced with another item which fits the description since the will was made (i.e., a different piano). Result = Presumption is that the testator intended the specific gift mentioned at the date of the will. Gift will be adeemed. Testator may be considered to have shown contrary intention as specified in s 24 Wills Act by using word ‘my’.

Question 27

What is the exception to a substituted gift being adeemed?

Answer 27

If the property given is capable of increase or decrease, e.g., ‘my shares’, ‘my jewellery’, the testator will normally be taken to have made a gift of any items satisfying the description at death. Note – this exception doesn’t apply to specifics, only general assets. I.e., applies to ‘jewellery but not a ‘pearl necklace from India’.

Question 28

What is the effect of a codicil on gift of property?

Answer 28

A codicil republishes the will as of the date of the codicil. I.e., if a testator writes a will in 1990 leaving ‘my gold watch’ to a legatee, loses the watch in 200 and replaces it, the gift of the watch in the will is adeemed. If a testator executes a codicil after the loss of the watch, the will is read at this later date and the legatee will receive the replacement watch.

Question 29

When does a gift lapse?

Answer 29

Basic rule = gift fails or lapses if the beneficiary dies before the testator. * If a legacy lapses, the property falls into residue, unless the testator has provided for the possibility of lapse by including a substitutional gift. * If a gift of residue lapses, the property passes under intestacy unless there is a substitutional gift in the will.

Question 30

What is the result of S 184 LPA 1925? (i.e., where a testator and a beneficiary die at similar times).

Answer 30

S 184 = where the testator and beneficiary die at similar times, and it cannot be proven who died first, it is presumed that the elder of the two died first. I.e., where the testator was older than the beneficiary, the gift takes effect and the property passes as part of the beneficiary’s estate.

Question 31

What is the rule for a lapse of gifts to more than one person? Joint gifts

Answer 31

– A gift intended for 2 beneficiaries (i.e., to A and B Jointly) does not lapse until all the donees die before the testator. – In the event that A dies, all of the gift passes to B. – The same applies to class gifts (i.e., to all my nieces and nephews equally).

Question 32

Where a joint gift contains words of severance what happens if A or B dies?

Answer 32

Words of severance = 'in equal shares' Effect = They are treated as separate gifts and the principle for joint gifts passing in full to the surviving beneficiary does not apply. – If A dies before the testator, A's share lapses and B only takes his apportioned share.

Question 33

What is the effect of a beneficiary disclaiming a gift?

Answer 33

Effect of disclaimer = gift falls into residue & passes on intestacy. * A beneficiary who disclaims a gift is treated as having predeceased the testator, which will allow the beneficiary’s issue to replace them under s 33 Wills Act 1837. * Once a beneficiary has accepted the gift / obtained a benefit from it, they are no longer able to disclaim.

Question 34

What is the rule of forfeiture?

Answer 34

A person should not benefit from the estate of a person they have unlawfully killed. I.e., under a will, intestacy, survivorship or any other way.

Question 35

What does forfeiture encompass?

Answer 35

– Murder – Manslaughter –Aiding & abetting suicide – Causing death by careless driving.

Question 36

Does forfeiture apply where the killer was insane?

Answer 36

No.

Question 37

What is the effect of forfeiture on the gift?

Answer 37

Subject to contrary intention in the will, a person who forfeits an entitlement under a will is to be treated as having predeceased the testator. I.e., if a child of the testator forfeits or disclaims, their issue can be substituted under the s. 33 Wills Act.

Question 38

What is revocation and what is its effect on the will?

Answer 38

Revocation = The formal act of cancelling or withdrawing a will. Effect of revocation is to nullify the will, either as a whole or in part. Fundamental characteristic of a will = it is revocable.

Question 39

When can a testator revoke their will?

Answer 39

Any time if they have capacity.

Question 40

What are the 3 ways in which a will may be revoked?

Answer 40

1) Later will or codicil 2) Destruction; or 3) Marriage / forming a civil partnership.

Question 41

1) Revocation by a later will or codidicl –

Answer 41

S 20 Wills Act 1837 = a will may be revoked in whole or in part by a declaration in a later will or codicil, or in a written declaration executed in the same manner as a will. * No particular wording required; however, most wills contain a formal revocation statement i.e., ‘I hereby revoke all former wills previously made by me’. * If a will does not contain an express revocation clause, it operates to revoke any earlier will or codicil by implication to the extent that the two are inconsistent. This could result in total or partial revocation. * Dating a will is not one of the formal requirements in s 9 Wills Act 1837 but it is advisable to date a will for revocation purposes.

Question 42

What is the doctrine of conditional revocation?

Answer 42

If a testator’s intention to revoke an earlier will by an express revocation clause is conditional upon some event (e.g., effectiveness of a new will), and that condition is not satisfied, the revocation may be held to be invalid so that the earlier will remains effective.

Question 43

What is required for revocation by destruction?

Answer 43

S 20 Wills Act 1837 = A will may be revoked by ‘burning, tearing or otherwise destroying the same by the testator or by some person in his presence and by his direction with the intention of revoking the will’. * Physical destruction is required: symbolic destruction (e.g., crossing out wording or writing ‘revoked’ across the will) is not sufficient. * Act of destruction must be carried out with intention to revoke. I.e., a will destroyed by accident is not revoked. * Must be carried out by testator themselves or someone else in their presence and by their direction.

Question 44

What is the effect of partial destruction?

Answer 44

* If a vital part (e.g., signature) is destroyed, the partial destruction is held to revoke the entire will. * If a less important part is destroyed, then the destruction may revoke only that part which was actually destroyed. * Key test = Whether the remainder of the will is intelligible and can still operate in the absence of the destroyed part.

Question 45

What is the effect where there is destruction but no intention to revoke?

Answer 45

* Court will look to evidence to establish contents of the will. i.e., looking at original will (if possible), oral evidence from those involved in drawing up the will. * If the contents can be reconstructed, an order may be obtained allowing its admission to probate as a valid will.

Question 46

Where the tetstaor's intention to revoke their will by destruction was conditional on some future event (e.g., execution of a new will) what can the court apply?

Answer 46

Doctrine of conditional revocation. This requires evidence of: 1) Intention that the beneficiary were to get something in the original will AND; 2) The amount originally intended. If they cannot find this evidence, and they cannot find the original amount stated in the will (and the new alteration in invalid) then the beneficiary gets nothing. * I.e., if a new will were never executed, then the original will may be valid even though it was destroyed. The contents of the original will may be reconstructed from a copy/draft.

Question 47

How is a will revoked by marriage or formation of a civil partnership?

Answer 47

S 18A – 18C Wills Act 1837 = If the testator marries or forms a civil partnership after executing a will, the will is revoked. * Revocation upon marriage is automatic. Note – This is the only event which has this consequence.

Question 48

What is the key exception to revocation of a will being automatic on marriage?

Answer 48

(1) The testator had an expectation of a forthcoming marriage to a particular person. Note, a will made in a general expectation of marriage is not sufficient. (2) Testator must intend that the will is not to be revoked by the marriage. Note – Both elements must be evident from the will. I.e., requires the will to state the expected marriage with the particular person and the wish for the will not to be revoked. Note – where a civil partnership is converted to a marriage, the conversion will not revoke an existing will of either party.

Question 49

What is the effect of divorce?

Answer 49

Upon legal divorce, the will remains valid but: (a) Provisions of the will appointing the former spouse or civil partner as executor or trustee take effect as if the former spouse/civil partner had died on the date on which the marriage or civil partnership is dissolved or annulled; and (b) Any property, interest in property, which is provided to the former partner passes as if the former partner had died on that date. I.e., ex-spouse ceases to be executor and any gift to them fails.

Question 50

What is the equitable doctrine of mutual wills?

Answer 50

Mutual will = where two people make wills in similar terms and agree that whichever of them survives will irrevocably leave their estate in a particular way. E.g., husband and wife both make wills leaving their respective estates to each other with the proviso that whichever of them survives leaves their estate to the wife’s daughter from a previous relationship.

Question 51

What are the essential elements of a mutual will?

Answer 51

1) made as a result of a clear agreement between the testators 2) As to the disposal of their estates 3) Part of that agreement is that the survivor will not revoke their will (or that they will leave their estate in a particular way).

Question 52

What is the effect of a mutual will?

Answer 52

Imposes a constructive trust over the surviving party’s estate in favour of the beneficiary under the original mutual will at the point of the first testator’s death.

Question 53

When does the constructive trust of the mutual will arise?

Answer 53

* Constructive trust arises when the first testator dies without having revoked their will. At the moment the first testator has carried out their side of the bargain, equity steps in and enforces the equitable doctrine of mutual wills. * Doctrine does not invalidate any new will, rather the imposition of the trust may frustrate the testator’s intentions to allocate the funds elsewhere.

Question 54

How can parties engage a revocation of a mutual will during lifetime ?

Answer 54

* During their lives, it is possible for both testators to revoke their mutual wills as a joint decision. * Where one of them ‘unilaterally’ revokes their will (i.e., just one of them), this is a breach of agreement/contract and so the other testator’s can seek damages. * Unilateral revocation = released other testator from agreement not to revoke.

Question 55

What is the effect of a codicil?

Answer 55

Effect of codicil = properly executed codicil has the effect of republishing the existing will. – Republication confirms the will and causes the will to take effect as if made at the time as the codicil, incorporating the changes made by the codicil. * A gift which is invalid because the beneficiary has acted as a witness will be saved if the will is republished by a codicil.

Question 56

Can a codicil be used to revive an earlier will / will which has been revoked?

Answer 56

* S 22 Wills Act = Codicil can be used to revive a will which has previously been revoked. To do so, the codicil must in some way evidence the testator’s intention to revive the will (i.e., includes an express statement or inclusion of a disposition which means the testator could have had no other intention but to revive the will).

Question 57

What are the formalities for amending a will?

Answer 57

* Any amendments to the will must also be signed by the testator and two witnesses (or they may both add their initials in the margin next to the amendment). Must be in the testator’s presence. Note – Would not have to be the same two witnesses as the original will. * This raises a presumption that the changes were made prior to the execution of the will.

Question 58

If the formalities to amend a will were not properly followed, how are the changes treated?

Answer 58

* If, however, these formalities are not followed, then any alterations are presumed to have been made after the will was executed, unless the contrary can be proved. * S 21 Wills Act 1837 = Any alteration made after the will was executed will be valid if those alterations were themselves executed like a will. (note – initials of testator and the witnesses in the margin next to the amendment will suffice)

Question 59

What is the general rule for invalid alterations?

Answer 59

* Where an alteration is invalid and the original wording remains apparent, it will be the original wording of the will that is admitted to probate (and remains valid).

Question 60

What is "apparent"?

Answer 60

* Apparent = Optically apparent on the face of the will by ordinary means. I.e., by reading it with a magnifying glass or holding it up to the light. * Note – not possible to ascertain wording by extrinsic evidence nor by interference with the will (e.g., applying chemicals) or by producing another document (e.g., an X-ray of the will).

Question 61

What is the effect where an alteration is invalid, but the original wording is not apparent?

Answer 61

The will is normally admitted to probate with the original wording "obliterated" – which means the clause cannot take effect.

Question 62

What is the exception to obliteration?

Answer 62

* If the obliteration is accompanied by an attempt to substitute other wording, in which case the court may hold that the obliteration was conditional on the substitution taking effect. * As the substituted wording is ineffective, the original wording is not obliterated – provided there is evidence of what the original wording was. * The court will consider any evidence available to establish the original wording, including a copy of the original will.

Question 63

What is the minimum number of executors?

Answer 63

1. 1 executor can give good receipt for the proceeds of sale of land held in the estate.

Question 64

What is the maximum number of executors to apply for a grant of probate?

Answer 64

4. However unlimited number of executors can be named in the will.

Question 65

Who can be executors?

Answer 65

1) Individuals who are not professionals. 2) Solicitors / other professionals 3) Banks / other trust corporations

Question 66

Who can redeem payment for acting as a trustee / executor?

Answer 66

S 29 Act –- Allows payment of reasonable remuneration to a trustee (which includes a personal representative) for time spent and work done (even if such work could have been a lay person) but only if the trustee is either: 1. A trust corporation or 2. A trustee acting in a professional capacity. This means, in the course of a profession or business which involves providing relevant services to estates and/or trusts.

Question 67

How can a trust corporation or professional trustee / executor charge for being an executor?

Answer 67

– Requires the consent of co-executors or co-trustees to charge under s 29.

Question 68

Is a sole executor able to recover remuneration under the statutory provisions?

Answer 68

No.

Question 69

What is IHT 400 form?

Answer 69

* IHT 400 form is submitted to HMRC. Is the overall value of the estate. * Contains a list of the assets to which the deceased was beneficially entitled. * Must be submitted within 12 months from the end of the month in which the death occurred. * IHT 400 must be completed for the PRs to obtain a grant of representation. * IHT 400 must be completed for every estate and signed by the PRs unless it is excepted.

Question 70

What are the 2 "excepted" estates?

Answer 70

1) Small estates = estates where the gross value of the estate, including shares in any joint property, does not exceed the IHT threshold (£325,000). * For a small estate, only an Estate Summary Form needs to be submitted to the Probate Registry instead of IHT 400. 2) Exempt estates =estates where the bulk of the estate is subject to an exemption, e.g., the spouse exemption or charity exemption (see further in Inheritance Tax section for details).

Question 71

How are the estate's assets valued?

Answer 71

On the basis of “the price which the property might reasonably be expected to fetch if sold in the open market” immediately prior to death. * Where land is co-owned, this may require a discount of approximately 10% to be applied.

Question 72

If a client wishes to leave a significant gift to their solicitor, what must the solicitor do?

Answer 72

The solicitor must advise the client to seek independent legal advice. If the client refuses to do so, then the solicitor should decline to act.

Question 73

When does interest on IHT begin to run?

Answer 73

6 months from the end of the month in which the death occured.

Question 74

Who bears the costs associated with the packing or transport of a specific gift?

Answer 74

The beneficiary, unless the will states otherwise.

Question 75

Where a gift is mortgaged land/property, if the tetsator does not want the beneficiary to take on the debt, what should they add?

Answer 75

* If the testator does not want the beneficiary to take on the debt associated with a gift, then they should express in the will “free of mortgage”; this then casts the burden of the mortgage debt on to the residue.

Question 76

How should a residue clause be drafted?

Answer 76

* For a partial intestacy not to occur, a residue clause should cover the express direction of the payment of all debts, expenses and legacies before the rest (residue) is distributed to the beneficiaries.

Question 77

What formalities should the solicitor comply with when they are appointed as executor>

Answer 77

A solicitor should do the following before drafting a will which appoints them / their business as the executor: * Explain the options available regarding the choice of executor. * Ensuring the client understands that an executor does not have to be professional person/business and that lay executor can subsequently instruct a solicitor to act for them if this proves necessary (and can be indemnified out of the estate for the solicitor’s fees). * Recording advice that is given concerning the appointment of executors and the client’s decision.