WAE Flashcards
A died, survived by his wife (B) and daughter(C). His validly executed will includes only the following gifts:
(a) My house to my wife
(b) £50,000 to my daughter
A’s succession estate comprises the following property (all solely owned):
A house
Bank accounts containing £100,000
Personal chattels
Which of the following correctly explains how A’s estate will be distributed?
A is testate because he has a validly executed will. The house will pass to B. C will receive the contents of the bank accounts. The personal chattels will be divided equally between B and C.
A is partially intestate because his will does not dispose of his entire estate. The house will pass to B. C will receive the contents of the bank accounts. The personal chattels will be dealt with under the intestacy rules.
A is intestate because his will does not dispose of his entire estate. All his property will be dealt with under the intestacy rules.
A is intestate because his will does not dispose of his entire estate. The house will pass to B. C will receive £50,000. The remaining £50,000 and A’s personal chattels will be dealt with under the intestacy rules.
A is partially intestate because his will does not dispose of his entire estate. The house will pass to B. C will receive £50,000. The remaining £50,000 and A’s personal chattels will be dealt with under the intestacy rules.
A is partially intestate because his will does not dispose of his entire estate. The house will pass to B. C will receive £50,000. The remaining £50,000 and A’s personal chattels will be dealt with under the intestacy rules.
Correct: Any property covered by the will is dealt with in accordance with that will. The remainder passes in accordance with the intestacy rules.
Which of the following would be included in a deceased person’s succession estate?
A life interest in a trust, a share of a house owned as tenants in common and cash held in a bank account.
A vested remainder interest in a trust, a share of a house owned as joint tenants and cash held in a bank account.
A remainder interest in a trust which is contingent on the deceased surviving the life tenant, a share of a house owned as tenants in common and a life assurance policy written in trust.
A vested remainder interest in a trust, a share of a house owned as tenants in common and cash held in a bank account.
A remainder interest in a will trust which is contingent on the deceased surviving the life tenant, a share of a house owned as tenants in common and a life assurance policy not written in trust.
A vested remainder interest in a trust, a share of a house owned as tenants in common and cash held in a bank account.
Correct: All of these assets would be included in the succession estate. Note that the position would be different if the deceased held a life interest in the will trust or the house was held as joint tenants.
A died yesterday. His estate consisted of the following assets (all solely owned unless otherwise stated:
House £400,000 Antiques worth £180,000 (owned with B as joint tenants). Bank accounts £25,000 Life Assurance Policy £50,000 (not written in trust)
A was also the life tenant of C’s estate. There was £100,000 in the trust fund at A’s death. B is the remainderman.
What is the value of A’s succession estate?
£655,000
£475,000
£575,000
£565,000
£425,000
£475,000
Correct. A was the sole owner of the house, the bank accounts and the life policy proceeds (which were not written in trust). The antiques pass to B via survivorship.
A person dies intestate, survived only by their long-term boyfriend and two brothers (both under 18). How will their estate be distributed?
The whole estate passes to the boyfriend providing he survives the deceased by 28 days. The brothers are not entitled to anything because they are not issue.
The boyfriend is entitled to the deceased’s personal chattels and a statutory legacy of £270,000. The residue is shared equally between the boyfriend and the brothers.
The estate is shared equally between the boyfriend and the brothers.
The estate will be held on the statutory trusts equally for the two brothers (whose interests are contingent upon reaching 18 or marrying earlier). The boyfriend is not entitled to anything.
The boyfriend is entitled to the deceased’s personal chattels, a statutory legacy of £270,000 and half the residue. The remaining half share is held on the statutory trusts for the brothers.
The estate will be held on the statutory trusts equally for the two brothers (whose interests are contingent upon reaching 18 or marrying earlier). The boyfriend is not entitled to anything.
Correct: The brothers are the first people entitled in the statutory order. The boyfriend has no entitlement under the intestacy rules.
A dies intestate, leaving no spouse and three unmarried children, B (18), C (15) and D (14). How will A’s estate be distributed?
The whole estate passes to B providing they survive A by 28 days. C and D are not entitled to anything because they have not reached the age of 18 or married by the date of A’s death.
The estate will be shared equally and absolutely by B, C and D, providing they survive A by 28 days.
B is entitled to A’s personal chattels, a statutory legacy of £270,000 and half the residue. The remaining half of the residue is held on the statutory trusts for B, C and D.
The estate will be held on the statutory trusts equally for B, C and D, providing they survive A by 28 days. B has a vested interest. C and D’s interests are contingent upon reaching 18 or marrying earlier.
The estate will be held on the statutory trusts equally for B, C and D. B has a vested interest. C and D’s interests are contingent upon reaching 18 or marrying earlier.
The estate will be held on the statutory trusts equally for B, C and D. B has a vested interest. C and D’s interests are contingent upon reaching 18 or marrying earlier.
Correct: A left issue but no spouse, so they inherit the estate on the statutory trusts. The contingency limb has already been satisfied in respect of B but not C or D.
A person dies intestate and is survived by his mother, his spouse and his son. His estate amounts to £790,000 cash, plus personal chattels worth £10,000.
Which of the following correctly states the value of the spouse’s entitlement (providing that they survive by 28 days)?
£395,000
£530,000
£540,000
£405,000
£270,000
£540,000
Correct. The spouse is absolutely entitled to the personal chattels (worth £10,000), a statutory legacy of £270,000 and half the £520,000 residue.
A woman executes her will in accordance with the requirements of s.9 Wills Act 1837. There is no doubt that she has testamentary capacity. The will gives the whole of the woman’s estate to her son and nothing to her daughter.
The daughter tells you that her brother encouraged their mother to make a will leaving everything to him and nothing to the daughter. The son confirms that he did ask his mother to make a will leaving everything to him because his sister is “not to be trusted with money”.
The daughter tells you that her mother would never have agreed or intended to give everything to her son.
Is the woman’s will valid?
Yes, provided that the son can produce evidence that his sister is reckless with money.
No. The son encouraged the testator to make a will that favoured him over his sister and therefore the will does not reflect her true intention.
Yes, unless the daughter can provide evidence that her brother placed her mother under so much pressure that she only signed the will because she felt forced to and then when she signed it the woman did not actually want her son to inherit the whole of her estate.
No, unless the son can provide evidence that his mother intended for him to inherit the whole of her estate.
Yes. The woman had testamentary capacity and executed the will properly. This raises a presumption that she had the requisite intention to make this will.
Yes, unless the daughter can provide evidence that her brother placed her mother under so much pressure that she only signed the will because she felt forced to and then when she signed it the woman did not actually want her son to inherit the whole of her estate.
W1 assessment MCQ
(forgot to add in explanation for correct answer)
A woman died intestate two months ago and her estate was distributed between her three adult children. The woman had never married or entered a civil partnership. On the date of her death she had been living with her long-term partner and his son (aged 15) for the previous 10 months. The woman provided financial maintenance for both her partner and her step-son throughout the period they all lived together.
Who is entitled to bring a claim against the woman’s estate under the Inheritance (Provision for Family and Dependants) Act 1975?
The woman’s step-child only.
No one is entitled to bring a claim because the woman did not leave a will.
The woman’s children and step-child.
The woman’s partner only.
The woman’s partner, children and step-child.
The woman’s partner, children and step-child.
Correct. The woman’s partner could apply as a person maintained at the date of death under s.1(1)(e). However, he could not apply as a cohabitee under s.1(1A), as they were not living together for the two years immediately preceding her death.
The woman’s step-child could possibly apply as a person treated as a child of the deceased under s.1(1)(d), or if the facts did not support this, then as a person being maintained under s.1(1)(e).
The woman’s children could apply under s.1(1)(c). That they are adult children and have received her estate under intestacy does not preclude a claim but would affect the likelihood of them receiving any award.
A man died 8 months ago and the grant of probate was issued four months later. By his will the man left all of his estate to his son and nothing to his partner with whom he had been living for the last 3 years. The man’s partner wishes to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (the ‘Act’).
Is the man’s partner able to bring a claim under the Act?
No - because it has been less than 6 months since the date of the grant of probate.
Yes
No - because the man died more than 6 months ago.
Only if a court order granting permission for the deadline to be extended is obtained.
No - because they were not married to or in a civil partnership with the man.
Yes
Correct. The deadline for bringing a claim (without court permission) is 6 months from the date of the grant of representation. A claim can be brought under the Act before the grant is issued.
A new client aged 40 wishes to give instructions to make a will.
Which of the following most accurately describes best practice when taking the instructions?
Contact the client’s doctor for an opinion on whether the client has testamentary capacity to make a will.
Ask questions to establish if the client meets the requirements of the test in Parker v Felgate.
Ask the client if they have testamentary capacity to make a will.
Ask questions to establish if the client meets the requirements of the test in Banks v Goodfellow.
Ask questions to establish if the client meets the statutory test for capacity under the Mental Capacity Act 2005.
Ask questions to establish if the client meets the requirements of the test in Banks v Goodfellow.
This is best practice in a case where your client is young and healthy.
A woman died intestate a month ago. At the time of her death she was separated from her husband of 10 years. The woman and her husband had discussed getting divorced but no formal proceedings had begun. When she died, the woman was living with her son (aged 17 years) and her step-son (aged 18 years). The woman’s daughter (aged 25) lives with her husband and their new baby, the woman’s only grandchild.
Who is entitled to share in the distribution of the woman’s estate?
The husband, son, step-son and daughter only.
The husband, son and daughter only.
The son and daughter only.
The son and step-son only.
The husband, son, daughter and grandchild only.
The husband, son and daughter only.
Correct. Where a person dies intestate and is survived by a spouse and issue, only those relatives will take a share of the deceased’s estate. Here, the woman was survived by her husband (it does not matter that they were not living together), and her son (it does not matter how old her son is) and daughter (it makes no difference whether she is living with the deceased or not). The step-son has no entitlement to the estate. Nor does the grandchild if the parent is alive at the date of the intestate’s death.
A woman died intestate a month ago. She had never been married or in a civil partnership. The woman was living with her only grandchild (aged 1). The woman’s son, the grandchild’s father, died before the woman.
The woman’s brother (her only sibling), both of her parents, and her daughter-in-law (the wife of her son) are still alive.
Who is entitled to share in the distribution of the woman’s estate?
Her grandchild only.
Her parents only.
Her daughter-in-law only.
Her granddaughter and brother only.
Her daughter-in-law and grandchild only.
Her grandchild only.
Correct. Where a person dies intestate and is survived by issue but no spouse/civil partner, the issue will inherit the whole of the estate. If a child of the intestate dies before their parent, but leaving their own issue, the intestate’s grandchild will inherit the share of the estate their parent would have inherited.
The other options were incorrect because:
-the parents and siblings of an intestate will only inherit if the intestate is not survived by either spouse or issue.
-Where a person due to inherit dies before the intestate’s (here her son) then the son’s spouse would not be entitled to any share of the intestate’s estate.
A man died intestate a month ago. He had never been married or in a civil partnership and had never had any children. Both of the man’s parents died before him. The man was survived by his brother (aged 20), his sister (aged 16, and pregnant with her first child when her brother died), and his aunt (his mother’s sister). The man’s sister gave birth to a baby boy (the man’s nephew) 6 months after the man died. The man’s sister died during childbirth, aged 17.
Who is entitled to share in the distribution of the man’s estate?
His brother and his sister’s estate only.
His brother and his nephew only.
His aunt only.
His brother only.
His aunt, his brother and his nephew only.
His brother and his nephew only.
Correct. After spouse, issue and parents the next category of relative entitled to inherit are the siblings of the intestate. The siblings inherit on the terms of the statutory trust so in this case, the brother and sister are entitled to half of the estate each on the terms of the statutory trust i.e. contingent on reaching the age of 18.
The sister died after the intestate but before reaching the contingent age. This means her share never vested and is therefore not part of her estate. Any option suggesting the sister’s estate would benefit is therefore incorrect.
However, because the sister died leaving her own issue, the substitution limb of the statutory trust would apply. The share that would have passed to the man’s sister, passes instead to her children who are alive or en ventre sa mere (a French expression meaning “in its mother’s belly” which refers to a child conceived but not yet born) at the date of the intestate’s death, contingent upon their attaining the age of 18 or marrying earlier. Although the man’s nephew was not born until after his death, his sister was pregnant at this time and therefore the nephew satisfies the criteria assuming he reaches 18.
The man’s aunt would only inherit if the man had no siblings, or nieces /nephews.
A man died intestate a month ago. His estate comprised a property owned as joint tenants with his brother, a bank account in his sole name, personal possessions, cash in the house, and a discretionary lump sum payable under the terms of the man’s pension scheme (nominated in favour of the man’s brother).
Which of the following lists the assets that will be distributed in accordance with the intestacy rules?
The property, bank account and personal possessions only.
The property, bank account, personal possessions and cash only.
Bank account, personal possessions and cash only.
The property, bank account, personal possessions, cash, and the amount payable under the discretionary pension scheme.
Bank account, personal possessions, cash, and the amount payable under the discretionary pension scheme only.
Bank account, personal possessions and cash only.
Correct. Items owned as joint tenants will pass in accordance with the rules of survivorship. Therefore, his property will pass directly to his brother and not under the intestacy rules. The discretionary pension lump sum is payable in accordance with the nomination that was made, so will pass directly to his brother and not under the intestacy rules. The remainder of the estate assets are included in the deceased’s succession estate.
A man died intestate a month ago. He was survived by his civil partner and their son (aged 21). The man’s estate comprises a ½ share of a property owned as tenants in common with his civil partner (value of whole £500,000), a savings account (£40,000), a vehicle used solely for business purposes (£5,000) and personal possessions (£20,000).
Which of the following best describes what the man’s civil partner and son are entitled to under the intestacy rules?
The man’s civil partner will receive chattels (worth £20,000), a statutory legacy of £270,000, and half of the remainder. The man’s civil partner is entitled to have the property appropriated to them in addition to her entitlement under intestacy. The man’s son will receive a contingent interest in the other half of the remainder.
The man’s civil partner will receive chattels (worth £25,000), a statutory legacy of £270,000, and half of the remainder absolutely. The man’s son is entitled to a vested interest in the other half of the remainder.
The man’s civil partner will receive chattels (worth £20,000), a statutory legacy of £270,000, and half of the remainder. The man’s civil partner is entitled to have the property appropriated to them as part of their entitlement under the intestacy. The man’s son will receive a vested interest in the other half of the remainder.
The man’s civil partner will receive chattels (worth £25,000), a statutory legacy of £270,000, and half of the remainder. The man’s son will receive a contingent interest in the other half of the remainder.
The man’s civil partner will receive the entire estate passing under the intestacy rules. The man’s son will receive nothing.
The man’s civil partner will receive chattels (worth £20,000), a statutory legacy of £270,000, and half of the remainder. The man’s civil partner is entitled to have the property appropriated to them as part of their entitlement under the intestacy. The man’s son will receive a vested interest in the other half of the remainder.
Correct. The civil partner is entitled to receive chattels worth £20,000 (the personal possession but not the business assets), plus a statutory legacy of £270,000, and half of the remainder. As the half-share of the property falls within the estate passing under intestacy, the civil partner can request that the property is transferred to them as part of their entitlement (not in addition to). The son will receive the other half of the remainder on statutory trusts. As he is over the age of 18 his share will be vested.
If you are acting for a client who lacks testamentary capacity, should you take their instructions for preparing a will?
No
Yes
No
correct
If a client lacks capacity they cannot make a valid will and a solicitor should not accept their instructions to prepare one.
A client gives you instructions to prepare a new will which leaves the whole of their estate to their civil partner. You consider the test in Banks v Goodfellow and are certain that your client has testamentary capacity.
Five days after giving the instructions the client was involved in a car accident which left them disorientated and confused. You visit the client in hospital and bring with you the will you have prepared. The client remembers meeting you to give instructions for a will and is happy to sign the will you have prepared in accordance with those instructions. However, when talking with the client you have some doubt whether they still satisfy the test for capacity and their memory of your meeting and the points discussed seems a little unclear.
Which one of the following is correct?
The client must have capacity at the time of execution for the will to be valid.
The client could execute a valid will in the hospital but only if they satisfy the test for capacity in the Mental Capacity Act 2005.
The client could make a valid will in the hospital provided a doctor acts as a witness.
It is possible for the client to make a valid will in the hospital even if they lack capacity when it is executed because they had capacity when giving instructions and understand they are now signing a will for which they had previously given instruction.
It is possible for the client to make a valid will in the hospital even if they lack capacity when it is executed because they had capacity when giving instructions and the terms of the will are rational.
It is possible for the client to make a valid will in the hospital even if they lack capacity when it is executed because they had capacity when giving instructions and understand they are now signing a will for which they had previously given instruction.
Correct. The rule in Parker v Felgate is an exception to the requirement that the client has capacity at point of execution. Provided they had capacity when giving instructions, the will was prepared in accordance with those instructions and the testator understands they are signing a will for which they had previously given instructions they don’t need to satisfy the Banks v Goodfellow test at the point of signing.
The other answers were incorrect because:
- The test in the Mental Capacity Act 2005 is not the test used for testamentary capacity
- There is no requirement for a doctor to witness a will
- Whether or not the will is rational is not a factor to take into account when applying the rule in Parker v Felgate
You have been instructed by a client whose elderly mother is in a nursing home and suffering from dementia. Your client’s mother currently lacks capacity which she will not regain.
Your client’s mother is a widow. Her current will divides her estate equally between her three children, including your client. The will was duly executed by the client’s mother and witnessed by two of her friends.
Your client is concerned that their mother may have lacked capacity when she made her will six months ago as your client was expecting to receive more than a 1/3 share of the estate.
Which one of the following most accurately describes the legal position should your client wish to challenge the validity of the will?
There is a presumption that your client’s mother lacked capacity when she made her will because of her current medical condition.
There is a presumption that your client’s mother lacked capacity when she made her will because she is elderly (unless the ‘golden rule’ was followed).
There will be a presumption that your client’s mother had capacity when she made her will unless your client has evidence to suggest otherwise.
If your client’s mother did not have capacity at the time she made the will it is invalid. As she will not regain capacity it is no longer possible for her to make a new will.
There is always a presumption in favour of capacity and therefore your client must prove their mother did not have capacity when she made her will.
There will be a presumption that your client’s mother had capacity when she made her will unless your client has evidence to suggest otherwise.
Correct.
Where the will on the face of it does not raise any concerns, because its terms are rational and it has been properly signed, then capacity is presumed. However, if evidence that raises doubt is provided however the presumption is rebutted and the burden of proof reverts to the propounder of the will to demonstrate the testator satisfied the Banks v Goodfellow test.
The other options were incorrect because:
- If a testator lacks capacity it may be possible for a statutory will to be made for them
- The age of the testator, and whether or not the golden-rule was followed, do not affect the general rule regarding presumption in favour of capacity where the will is rational and has been properly executed
- It is not correct that the person challenging a will must prove the lack of capacity
- The current medical condition is not a determining factor- the testator’s health at the time of execution is
You are reviewing two wills.
When the first will was signed the testator told the witnesses “I’ve not bothered to read anything the lawyer has sent me – it’s all a bit complicated to be honest, but I’m sure they’ve done the right thing”.
When the second will was executed the testator had hurt their hand and arranged for someone else to sign the will on their behalf.
Both wills were drafted by solicitors and duly executed with a standard form attestation clause. Both testators had testamentary capacity.
Assuming there is no other relevant information, which one of the following is correct with regards knowledge and approval of the wills?
Knowledge and approval will be presumed in respect of both wills because the testator had capacity when the wills were made.
Affidavit evidence that knowledge and approval were present at execution is required in respect of both wills.
Knowledge and approval will be presumed in respect of both wills because the testator had capacity when the wills were made and they were duly executed.
The first will is invalid due to lack of knowledge and approval. The second will is invalid because the attestation clause was not updated to make it clear the testator did not sign the will themselves.
The first will is invalid due to lack of knowledge and approval. Affidavit evidence that knowledge and approval were present at execution is required in respect of the second will.
The first will is invalid due to lack of knowledge and approval. Affidavit evidence that knowledge and approval were present at execution is required in respect of the second will.
Correct
A testator must intend to make the particular will they sign. This means they should know and approve of its contents and the contents of the will must have been read and understood. The first testator has not read or understood his will so did not have knowledge of its contents when it was signed.
The second will was signed by someone else on behalf of the testator. This means knowledge and approval will not be presumed. As the attestation clause was not amended to reflect this, affidavit evidence to prove knowledge and approval will be required. The other options were incorrect because: - facts suggest the first testator lacked knowledge and approval – so affidavit evidence will not help. - although testamentary capacity and due execution usually lead to a presumption of knowledge and approval, this does not apply where someone signs on behalf of a testator - an inadequate attestation clause does not render a will invalid
A will written in English contains the following attestation clause:
“Signed by the above named Testator in our joint presence and then by us in his after this document had been read to the Testator when the testator seemed thoroughly to understand and approve the contents”
In which circumstances should this form of attestation be used?
Where a testator is blind or illiterate.
Where a testator is blind, illiterate or does not understand English.
Where suspicious circumstances surround the execution of the will.
Where a testator is blind.
Where a testator is blind or is not signing the will on their own behalf.
Where a testator is blind or illiterate.
Correct
A blind or illiterate testator cannot read the will and therefore to raise a presumption that knowledge and approval was present it needs to be clear that the will was read out loud and that the testator understood what was said before it was signed. The other options were incorrect because: - A testator who does not understand English is not aided by the will being read out loud unless it is clear it was read in the testator’s preferred language by someone who was able to translate it - A testator who does not sign the will himself doesn’t necessarily need it to be read out loud, but the attestation clause should refer to the fact that he did not sign - Where there are suspicious circumstances this form of attestation is not helpful
A testator died recently. Three weeks before he died, the testator made a new will leaving all of his assets, apart from a small cash gift to a local charity, to the children of his current marriage. The testator’s previous will made provision for his child from an earlier marriage, but this child does not benefit under the current will.
You have been instructed by the child of the testator from the earlier marriage. Your client spoke to the testator a few days before he died. The testator explained that his wife “kept on at him all the time” to make a will in favour of their children only, and to keep her quiet he signed a new will that reflected what she wanted.
The testator had capacity and knew and approved of the terms of the new will when it was duly executed.
Which of the following is correct regarding a claim of undue influence?
A claim of undue influence will succeed if your client provides evidence that when the testator signed the will his true intention was not reflected in its terms.
A claim of undue influence will succeed if your client provides evidence that the testator’s spouse persuaded the testator to make the will which excluded your client.
A claim of undue influence is not possible because the testator had both capacity and knowledge and approval when they executed their will.
If a claim of undue influence succeeds the will would be invalid and the local charity cannot receive the cash gift.
A claim of undue influence is not possible because the testator’s spouse does not benefit under the new will.
A claim of undue influence will succeed if your client provides evidence that when the testator signed the will his true intention was not reflected in its terms.
Correct
Even where a testator has capacity and knowledge and approval, if the will was made as a result of undue influence it will not be valid because it does not reflect the testator’s true intention. The other options were incorrect because: - it is not unlawful to encourage someone to make a will or persuade them that certain provisions should be included. Undue influence occurs where a testator is coerced into making a will that is contrary to their true intention. - It is not a requirement that the person committing the wrong unduly influences the testator to make direct provision for themselves - A testator can know and approve of their will but still be acting as a result of undue influence - Where a testator has been unduly influenced in respect of a particular gift (here the gift to the children) it is still possible for the remainder of the will to take effect
Consider the following attestation clause:
“Signed by the above named [TESTATOR] in our joint presence“
Which one of the following most accurately summarises the effect of a will containing this clause?
If a will included this attestation clause it would be incomplete because there is no reference to the will having been read out loud to the testator.
If a will included this attestation clause there would be a presumption that the will was executed in accordance with the requirements of s 9 Wills Act 1837.
If a will included this attestation clause the will would not be valid.
If a will included this attestation clause proof of the testator’s intention would be required when seeking to admit the will to probate following the testator’s death.
If a will included this attestation clause, proof of due execution would be required when seeking to admit the will to probate following the testator’s death.
If a will included this attestation clause, proof of due execution would be required when seeking to admit the will to probate following the testator’s death.
Correct. A properly drafted attestation clause raises a presumption that the will was executed in accordance with the requirements of s 9 WA (a presumption of due execution). Therefore it should refer to the testator and the witnesses signing in the presence of each other. This clause makes no reference to the witnesses signing in the presence of the testator so is incomplete. However, there is no legal obligation to include an attestation clause, nor is any specific form of attestation required, so a poorly drafted clause does not invalidate the will. However, proof of due execution is required, usually an affidavit of due execution sworn by the witnesses.
The other answers were incorrect because:
- A missing or poorly drafted attestation clause does not invalidate the will
- A properly drafted attestation clause does not give rise to a presumption of the testator’s intent
- The attestation clause would only mention the will have having been read out loud to a testator where the testator unable to read the will for himself
Your client arranges to sign their will at home and invites a married couple who live next door to act as witnesses. The three of them gather in the same room and the testator produces the will ready for signing. One of the witnesses leaves the room to take a phone call. Before they return, the testator signs the will in the presence of the other witness, who then signs the will in the presence of the testator. When the first witness returns to the room, the testator acknowledges their signature and the first witness then signs the will in the testator’s presence.
Has the will been executed in accordance with the formal requirements of s.9 Wills Act 1837?
The will has not been properly executed because the witnesses are married to each other.
The will has not been executed properly because the witnesses signed the will in the presence of the testator but not each other.
The will has not been properly executed because the testator and both witnesses must all be in the same room throughout the execution process.
The will has been properly executed.
The will has not been properly executed because one of the witnesses did not see the testator sign the will.
The will has been properly executed.
Correct. S 9 Wills Act 1837 requires the testator to sign the will (or acknowledge his signature) in the presence of two witnesses.
The other options were incorrect because:
- S 9 permits the testator to acknowledge his signature
- The marital status of the witnesses is irrelevant
- Provided s. 9 requirements are met there is no additional obligation for everyone in involved to be present throughout the execution process (although this is good practice)
- There is no requirement for the witnesses to sign the will in the presence of each other, only the testator
A testator died recently. The testator’s will contains a gift of £10,000 to the testator’s brother and gives the remainder of the estate equally to the testator’s spouse and children. The testator’s spouse, and the spouse of the testator’s brother, witnessed the will.
Which one of the following accurately describes the effect of the man’s will?
The will has no effect as it was not properly executed.
Only the man’s children will inherit under his will.
The man’s spouse and brother will inherit under his will.
The man’s spouse, brother and children will inherit under his will.
The man’s brother and children will inherit under the will.
Only the man’s children will inherit under his will.
Correct
Correct. Where a beneficiary (or their spouse) witnesses a will the beneficiary cannot inherit under the will. In this example the testator’s spouse and the spouse of the testator’s brother witnessed the will so neither the spouse nor brother will receive any benefit. Only the gift to the children is effective.
The other options were incorrect because:
S.15 Wills Act only applies to gifts under the will – it does not affect whether or not the will was properly executed
S.15 applies to a gift to a beneficiary who witnesses a will and any gift to their spouse
Review the following extracts from a valid will:
Clause 1: I hereby REVOKE all former wills and testamentary dispositions and declare this to be my last will
Clause 2: I APPOINT ANDREW BATES of […] and CATHY DENNIS of […] (hereinafter called “my Trustees” which expression where the context admits includes any trustee hereof for the time being) to be the executors and trustees of this my will but if either or both of them shall die in my lifetime or be unable or unwilling to act as my executor I appoint ESTHER FISHER of […] to fill any vacancy thereby arising
The testator died last week. Andrew died before the testator. You may assume anyone entitled to act as executor or trustee is willing and able to do so.
Which one of the following is correct?
Cathy and Esther will be appointed as executors of the estate. If any trust arises following the testator’s death, Cathy and Esther will also be the trustees.
Clause 1 needed to include the date the will was signed to avoid any confusion about which is the last valid will the testator made.
Cathy would act as the sole executor of the estate. If any trust arises following the testator’s death Esther would need to act as trustee with Cathy so there are two trustees.
Cathy and Esther will be appointed as executors of the estate. However, if any trust arises following the testator’s death, it is not clear who will act as the trustees.
Clause 1 did not revoke any codicils made before this will.
Cathy and Esther will be appointed as executors of the estate. If any trust arises following the testator’s death, Cathy and Esther will also be the trustees.
Correct. Andrew cannot act as he has pre-deceased the testator and Clause 2 appoints Esther in his place. Clause 2 also confirms that the executors should also act as trustees of any trust.
The other options were incorrect because:
- The revocation clause revokes any will or codicil made previously
-Esther is appointed as a replacement for Andrew (there is no option for Cathy to act alone)
-A will should contain a date but this can be at the end or as part of the commencement clause – it does not need to be part of the revocation clause
incorrect:
Clause 1 needed to include the date the will was signed to avoid any confusion about which is the last valid will the testator made.
Incorrect. Refer to your materials on will drafting – in particular the drafting of the commencement clause. A date should be included in the will, but this could be part of either the commencement or attestation clause.
Cathy would act as the sole executor of the estate. If any trust arises following the testator’s death Esther would need to act as trustee with Cathy so there are two trustees.
Incorrect. Refer to your materials on will drafting – in particular the drafting of the executor clause. Clause 2 makes it clear that if one of the original executors is unable to act (in this case Andrew) then Esther will fill the vacancy.
Review the following extracts from a valid will:
Clause 2: I WISH for any part or parts of my body where possible to be used for transplantation and for the treatment of others
Clause 4: I APPOINT my brother and sister jointly to be the guardians of any of my children who have not attained the age of 18 at the death of the survivor of myself and my civil partner
The testator died last week and is survived by her civil partner and their first daughter (aged 25), second daughter (aged 17) and their son (aged 14).
Which one of the following is correct?
Either the testator’s brother or the testator’s sister will be appointed as sole guardian of the testator’s second daughter and son.
The testator’s brother and sister will be appointed as guardians for the three children.
No guardians are appointed following the testator’s death.
The executors must ensure the testator’s body is used for transplantation and for the medical treatment of others.
The testator’s brother and sister will be appointed as guardians for the testator’s second daughter and son only.
No guardians are appointed following the testator’s death.
No guardians are appointed following the testator’s death.
Your client is a lay executor appointed under a valid will that contains a number of express administrative powers for executors, however, no express charging provisions are included.
Which one of the following is correct?
If there is a conflict between any of the express powers in the will and the equivalent statutory power your client may act in accordance with whichever confers the widest power.
If there is a conflict between any of the express powers in the will and the equivalent statutory power, your client must act in accordance with the statutory power.
Your client can charge for their time but only in accordance with the statutory power.
Your client can charge for their time as there is no express power preventing this.
Your client cannot charge for their time as there is no express power allowing this.
Your client cannot charge for their time as there is no express power allowing this.
Correct. There is no express power to charge in the will and the statutory power to charge applies only to professionals. The other options were incorrect because:
Your client cannot charge for their time
Express powers take priority over the implied statutory terms in a will where there is conflict
A valid will contains the following clause:
“ I give my gold diamond engagement ring absolutely and free of tax and costs of transfer to my niece”
You have just discovered that the testator sold the gold diamond engagement ring for £4,000 a month ago. However, there is still a platinum engagement ring among the testator’s personal possessions.
What will the testator’s niece receive?
Platinum engagement ring but only if it has not been left to another beneficiary.
The testator’s niece may choose either £4,000 or the platinum ring but only if it has not been left to another beneficiary.
Nothing
A gold engagement ring that the personal representatives must buy as a replacement.
£4,000
Nothing
Correct. The gift of the ring is a specific legacy. If the testator no longer owns the item at the date of their death then the gift in the will cannot be given effect to. In the absence of any express clause providing for an alternative gift, the clause fails and the beneficiary will receive nothing.
The other options were incorrect because:
· The original gift adeems because the testator does not own the item specifically left by the will
-There is no cash or chattel alternative which can be given as there are no express words permitting this
A testator made a valid will 2 years ago that contains the following clause:
“I give to my nephew absolutely and free of tax and costs of transfer all my personal chattels as defined by section 55(1)(x) of the Administration of Estates Act 1925”
The residue of the estate passes to the testator’s brother. There are no other relevant clauses within the will.
The testator died yesterday. Included among their assets is a van which the testator used only for business purposes, cash in the house worth £35 and a ring that was purchased as an investment. The testator wore the ring on special occasions a few times each year.
Which of the following is correct?
The testator’s nephew will receive the van. The testator’s brother will receive the ring and £35 cash.
The testator’s brother will receive the ring, £35 cash and the van.
The testator’s nephew will receive the ring and the van. The testator’s brother will receive the £35 cash.
The testator’s nephew will receive the ring, £35 cash and the van.
The testator’s nephew will receive the ring. The testator’s brother will receive the £35 cash and the van.
The testator’s nephew will receive the ring. The testator’s brother will receive the £35 cash and the van.
Correct. The definition of chattels excludes business assets (the van), cash (£35) and assets owned solely as an investment. The ring was not owned solely as an investment so will be included in the gift of chattels, the other items are not chattels so will pass under the gift of residue.
A testator owns two properties. A residential house and a holiday home that is let out.
The testator owns the residential house as joint tenants with their civil partner and owns the holiday home as tenants in common with their sister. The testator wants their civil partner to inherit the residential house and their sister to inherit the holiday home.
The rest of the estate (the residue) will be left to the testator’s children.
When you draft the testator’s will which of the following are required?
A clause giving the testator’s share of the holiday home to their sister.
No express clauses are required to achieve the testator’s wishes.
A clause severing the joint tenancy of the residential house.
A clause giving the testator’s share of the residential house to their civil partner.
A clause giving the testator’s share of the residential house to their civil partner and another clause giving the testator’s share of the holiday home to their sister.
A clause giving the testator’s share of the holiday home to their sister.
Correct. The holiday home is owned as tenants in common and therefore the testator’s share passes in accordance with the will and is not automatically inherited by the sister as the other co-owner. As we know the residue will not be left to the testator’s sister, an express clause giving the testator’s share of the holiday home to their sister is required. The residence owned as joint tenants will pass by survivorship to the surviving co-owner automatically. As the testator wants their civil partner to inherit in any event no express clause in the will is required to achieve the testator’s wishes.
The other options were incorrect because: - No severance of the joint tenancy is required as the testator wants the surviving co-owner to inherit the residential house - No express clause within the will is needed re the residential house; the law of survivorship achieves testator’s aim - An express clause giving the share of the holiday home to the sister is required as this interest will otherwise pass as part of the gift of residue to the testator’s children.
A valid will contains the following gifts:
“I give my car to my sister”
“I give my collection of stamps to my brother”
“I give £100 to my cleaner”
The testator owned a blue car when the will was made but had replaced this with a red car by the time they died.
After the testator made the will they sold over half of the stamps in the collection but later added new purchases to the collection.
There are no other relevant provisions.
Which one of the following is correct?
The testator’s sister will receive the red car.
The gift to the testator’s sister will fail and she will receive nothing.
The testator’s cleaner at the date of the testator’s death will receive £100.
The testator’s brother will receive only the stamps that were in the collection at the date of the will.
The testator’s brother will receive only the new stamps purchased after the will was executed.
The gift to the testator’s sister will fail and she will receive nothing.
Correct
Correct. The use of the word “my” in the specific gift overrides the general rule in s.24 Wills Act 1837 and the property is identified as at the date of the will. As the testator no longer owns the blue car then this gift adeems and the testator’s sister receives nothing.
The other options were incorrect because:
The identify of people is established with reference to the date of the will
Gifts of collections comprise the assets that fall within the collection as at the date of the testator’s death whether acquired before or after the will was executed
incorrect
The testator’s cleaner at the date of the testator’s death will receive £100.
Incorrect. Refer to your materials on the construction of clauses in a will. People are usually identified with reference to the date of the will.
A testator leaves the following legacy in their valid will:
“I give the piano I own at the date of my death to my neighbour”
The testator’s estate will be subject to inheritance tax.
Which one of the following is correct?
The gift of the piano is made subject to tax and costs of transfer.
The gift of the piano is made free of tax but subject to the costs of transfer.
The gift of the piano is made subject to tax but free of costs of transfer.
The gift of the piano is made free of tax and costs of transfer.
The executor may choose whether the tax and transfer costs are borne by the beneficiary or treated as a general administration expense.
The gift of the piano is made free of tax but subject to the costs of transfer.
Correct. Where a will is silent, a legacy in a will is made free of tax but subject to the costs of transfer.
The other options were incorrect because the general rules were incorrectly stated and the executors do not have a general discretionary power to decide where the costs fall.
By her will a testator left a property, which was charged with a mortgage during her lifetime, to her son. The residue of the testator’s estate is left to her daughter.
The will is silent on the liability to pay any outstanding mortgage. The testator did not have a mortgage protection policy.
Which of the following is correct?
The burden of repaying the mortgage will be shared equally between the property and the residue of the estate.
The burden of repaying the mortgage will be shared proportionately according to value between the property and the residue of the estate.
The mortgage will be repaid from the residue of the estate.
The mortgage must be repaid by the executors using the sale proceeds of the property before they distribute the balance to the testator’s son.
The testator’s son will inherit the property subject to the mortgage.
The testator’s son will inherit the property subject to the mortgage.
Correct. The general rule under s.35 Administration of Estates Act 1925, which applies here in the absence of any express wording to the contrary, states that the property charged shall bear the primary liability for repayment.
The other options were incorrect because:
The executors are not required to sell the property - they can transfer the property to the beneficiary subject to the charge
The residue of the estate is not liable for repayment of the mortgage
A valid will contains the following gift:
“I give £400 to each of my children who are alive at the date of my death contingent on them reaching the age of 21”
When the testator dies they have three children A (aged 24), B (aged 19) and C (aged 15).
Which of the children has a contingent interest under the will?
B and C only
C only
All of them
None of them
A only
B and C only
Correct. The gift is made contingent on the children reaching the age of 21. A has satisfied this contingency by the time the testator dies so their gift vests immediately. The other two children have not satisfied the contingency so their gifts are contingent. That one is an adult and the other a minor makes no difference.
The other options were incorrect as A has a vested interest, and B and C are under the age of 21 so have not satisfied the contingency
A testator recently died leaving a valid will that contains the following gifts:
“I give £40,000 to my sister”
“I leave the residue of my estate equally between my children”
The testator’s sister died a year ago and is survived by her only child (the testator’s niece). One of the testator’s three children died 5 years ago, leaving two of her own children (the testator’s grandchildren).
There are no other relevant provisions in the will.
Which one of the following correctly describes how the testator’s estate will be distributed?
The testator’s two surviving children and two grandchildren each inherit 1/4 of the residue.
The testator’s niece will receive £40,000. The testator’s two surviving children will each inherit 1/2 of the residue.
The testator’s niece will receive £40,000. The testator’s two surviving children will each inherit 1/3 of the residue. The two grandchildren will each inherit 1/6 of the residue.
The testator’s two surviving children will each inherit 1/3 of the residue. The two grandchildren will each inherit 1/6 of the residue.
The testator’s two surviving children will each inherit 1/2 of the residue.
The testator’s two surviving children will each inherit 1/3 of the residue. The two grandchildren will each inherit 1/6 of the residue.
Correct. The gift to the testator’s sister will lapse because she predeceased.
S.33 Wills Act 1837 will not create an implied substitution in favour of the testator’s niece because the original gift was not made to the testator’s issue. S.33 does apply to the gift to the children. Each child would be entitled to a 1/3 share, but one child has pre-deceased the testator. Their 1/3 share will be inherited equally by their two children, who receive 1/6 each.
The other options were incorrect because: - The testator’s niece does not receive anything - The testator’s grandchildren are entitled to share between them the 1/3 of the residue their parent would otherwise have inherited
You are reviewing a will that includes a class gift to all of the testator’s grandchildren contingent on them reaching the age of 18. The will does not state when the class of ‘grandchildren’ closes.
When the testator made the will they had five grandchildren. When the testator died they had seven grandchildren, all of whom are currently minors.
When will the class of ‘grandchildren’ close?
When it is no longer possible for any further grandchildren to be born.
When the first of her grandchildren reaches 18.
The class is already closed and only includes the grandchildren the testator had when they died.
The class is already closed and only includes the grandchildren the testator had when they made the will.
As the testator’s will does not specify when the class of ‘grandchildren’ closes the clause fails for uncertainty.
When the first of her grandchildren reaches 18.
Correct. The class closing rules mean the class of beneficiaries is identified when the first beneficiary has a vested interest. This has not yet occurred as all of the testator’s grandchildren are under the age of 18. Once the first of them reaches 18 the class will close.
The other options were incorrect because:
- The clause will not fail for uncertainty (the class closing rules create certainty)
- No beneficiary has a vested interest at the date of her death
- Without express wording to suggest otherwise, the date of the will is not the correct reference point
- It is possible to close the class without having to wait for it to be impossible for further members to be born
Which of the following is the standard applied when assessing the claim of a surviving spouse or civil partner under the IPFDA 1975?
Such financial provision as it would be reasonable in all the circumstances for any applicant to receive for his/her maintenance.
Such financial provision as it would be reasonable in all the circumstances for a husband or wife or civil partner to receive whether or not that provision is required for his or her maintenance.
Such financial provision as it would be reasonable in all the circumstances for a husband or wife or civil partner to receive for his/her maintenance.
Such financial provision as it would be reasonable in all the circumstances for a husband or wife or civil partner to receive whether or not that provision is required for his or her maintenance.
Correct: The surviving spouse/civil partner standard does not require the court to consider whether the provision is required for the applicant’s maintenance.
Which of the following is the court not expressly required to consider under section 3(1) IPFDA 1975?
Any physical or mental disability of any applicant or beneficiary.
The financial resources and financial needs of any beneficiaries of the deceased’s estate.
The financial resources and financial needs of any applicants.
The size and nature of the net estate of the deceased.
The applicant’s age and the duration of their relationship with the deceased.
The applicant’s age and the duration of their relationship with the deceased.
Correct: Although the court is required to consider any matter that they consider relevant in the circumstances, the applicant’s age and duration of their relationship with the deceased are not expressly referred to in section 3(1) IPFDA.
Which of the following most accurately reflects the guidelines applicable to spouses and civil partners?
The court must consider the applicant’s age and duration of the marriage or civil partnership, as well as whether, and if so the length of time for which and the basis on which the deceased maintained the applicant, and the extent of the contribution made by way of maintenance. The court must also take into account what the applicant might reasonably have expected to receive on divorce or dissolution of the civil partnership.
The court must consider the applicant’s age and duration of the marriage or civil partnership, as well as the length of any period of cohabitation prior to the marriage or civil partnership. The court also considers the contributions made by the applicant to the welfare of the deceased (including any contributions made by looking after the home or caring for the family). The court must also take into account what the applicant might reasonably have expected to receive on divorce or dissolution of the civil partnership.
The court must consider the applicant’s age and duration of the marriage or civil partnership, as well as any contributions made by the applicant to the welfare of the deceased (including any contributions made by looking after the home or caring for the family) and the liability of any other person to maintain the applicant. The court must also take into account what the applicant might reasonably have expected to receive on divorce or dissolution of the civil partnership.
The court must consider the applicant’s age and duration of the marriage or civil partnership, as well as any contributions made by the applicant to the welfare of the deceased (including any contributions made by looking after the home or caring for the family). The court must also take into account what the applicant might reasonably have expected to receive on divorce or dissolution of the civil partnership.
The court must consider the applicant’s age and duration of the marriage or civil partnership, as well as any contributions made by the applicant to the welfare of the deceased (including any contributions made by looking after the home or caring for the family) and whether, and if so to what extent, the deceased assumed responsibility for the maintenance of the applicant. The court must also take into account what the applicant might reasonably have expected to receive on divorce or dissolution of the civil partnership.
The court must consider the applicant’s age and duration of the marriage or civil partnership, as well as any contributions made by the applicant to the welfare of the deceased (including any contributions made by looking after the home or caring for the family). The court must also take into account what the applicant might reasonably have expected to receive on divorce or dissolution of the civil partnership.
Correct: The court considers all the factors above. There is no express requirement to consider whether the deceased maintained the applicant, or the length of their relationship prior to marriage/civil partnership (although these may be considered under the common guidelines if the court considers them relevant in the circumstances).
A client seeks your advice following the death of her brother 18 months ago. By her brother’s will your client is due to inherit the whole of his estate, with a substitution in favour of her children if she did not inherit for any reason.
The client is unhappy that her brother did not include their step-sister in his will and now wants to change the distribution of his estate so that she keeps half and the other half passes to their step-sister.
The client does not want to be taxed for either IHT or CGT purposes as though she personally made this gift to her step-sister.
Which of the following is correct?
It is not possible for the client to enter into either a variation or disclaimer because her brother died more than a year ago.
The client’s objectives can only be met if she varies her inheritance.
The client’s objectives can be met if she enters either a variation or disclaimer because the writing back effect for IHT and CGT purposes applies to both.
It is not possible for all of the client’s objectives to be met by either a variation or disclaimer.
The client’s objectives can only be met if she disclaims her inheritance.
The client’s objectives can only be met if she varies her inheritance.
Correct. A variation would achieve all of her objectives. By way of variation the client can re-distribute part of her inheritance and elect who should benefit instead. The writing back effect for both IHT and CGT will apply provided the variation is made in writing within 2 years following her brother’s death. The other options were incorrect because:
A disclaimer could not be used because the client cannot disclaim part of her inheritance, neither can she nominate the alternative beneficiary (under the will any disclaimed inheritance would pass directly to her children, not the step sister)
The time limit for varying the distribution is 2 years following death.
A client seeks your advice following the death of their father. The client recently inherited a share of her father’s estate but does not wish to keep her inheritance because she is wealthy in her own right. Instead your client wishes to pass part of her inheritance (a cash sum of £50,000) to her adult children in the most tax efficient manner. Inheritance tax was payable following her father’s death. You advise your client to enter a deed of variation.
Which of the following is the best advice for your client?
Your client should make an election for s 62 TCGA to apply to the variation.
Your client should make an election for s 142 IHTA to apply to the variation.
There is no benefit to claiming the writing back effect under either s 142 IHTA or s 69 TCGA because no refund of tax can be claimed.
Your client will need to seek the approval of her father’s PRs before she can vary her inheritance.
Your client should make an election for s 142 IHTA and s 62 TCGA to apply to the variation.
Your client should make an election for s 142 IHTA to apply to the variation.
Correct. If the client enters a variation and claims the writing back effect for IHT under s 142 IHTA her father’s estate will be taxed as though £50,000 was given to the client’s children and the remainder to the client. There is no change to the IHT liability on her father’s estate as a result (none of the beneficiaries are exempt) therefore consent from her father’s PRs is not required. The advantage to claiming the writing back effect under s 142 is that the client will not be making PET and so avoids the risk of this failing if she died within 7 years.
The other options were incorrect because:
No writing back for capital gains tax purposes should be made because the subject matter of the variation is cash- which is exempt from CGT.
There is an advantage to making an election under s 142 IHTA – the gift of £50,000 to the client’s children is treated as having been made from her father’s estate and will not be a PET by the client.
There would be no change to the IHT liability following the variation so PR consent is not required.
A client seeks advice with regards the following clause in her father’s will.
“I give all of my chattels to my daughter and hope that she will distribute them in accordance with the instructions I have left with my will”.
There is a letter of instruction attached to the father’s will requesting that your client distributes his chattels equally between all of his grandchildren as she sees fit.
Which one of the following is correct?
The effect of s 143 IHTA is to treat the gift of chattels to the client as being made free of IHT.
The client has an obligation to distribute the chattels to her children.
If the client distributes the chattels to her children she would make a disposal for CGT purposes.
By this clause the client is appointed as trustee of the chattels.
If the client distributes the chattels to her children she would make a PET for IHT purposes.
If the client distributes the chattels to her children she would make a disposal for CGT purposes.
Correct. The clause in the will is a precatory trust. The client is the beneficiary of the chattels. However, her father hoped that she would distribute them to his grandchildren. No legal trust is created so the client is not a trustee and has no obligation to comply with her father’s wishes. If she does give the chattels to the grandchildren, s 143 IHTA applies automatically to treat these gifts as if they were made by her father’s will (and not the client) for IHT purposes. There is no equivalent for CGT however, so the gifts will be a disposal by the client for CGT purposes.
The other options were incorrect because:
S 143 does not create a tax-free gift under the will
A gift of chattels made by the client to the grandchildren would ordinarily be a PET but the effect of s 143 is to treat these gifts as having been made by the will of the client’s father, and so she will not make a PET
No formal trust is created
The client has no obligation to comply with the wishes of her father
A woman died intestate two months ago and her estate was distributed between her three adult children. The woman had never married or entered a civil partnership. On the date of her death she had been living with her long- term partner and his son (aged 15) for the previous 10 months. The woman provided financial maintenance for both her partner and her step-son throughout the period they all lived together.
Who is entitled to bring a claim against the woman’s estate under the Inheritance (Provision for Family and Dependants) Act 1975?
the woman’s partner, children and step-children
no one is entitled to bring a claim because the woman did not leave a will
the woman’s partner only
the woman’s step-child only
the woman’s children and step-child
the woman’s partner, children and step-children
who is entitled?
even though the estate has been distributed to the children, they are still entitled
step child 1(1)(d)
partner 1(1)(e): maintenance
in this case, someone independent would be appointed on behalf of the step child since the partner has an interest
A man died 8 months ago and the grant of probate was issued four months later. By his will the man left all of his estate to his son and nothing to his partner with whom he had been living for the last 3 years. The man’s partner wishes to bring a claim under the IPFDA 75 (the ‘Act’).
Is the man’s partner able to bring a claim under the Act?
No - because the main died more than 6 months ago
No - because it has been less than 6 months since the date of the grant of probate
No - because they were not married to or in a civil partnership with the man.
Only if a court order granting permission for the deadline to be extended is obtained.
Yes
Yes
within the 6 months time period as the grant of probate was only 4 months ago
A woman makes a PET with a chargeable value of £50,000. She does the same 11 years later. A year after the second gift, she dies. She makes no other lifetime gifts. What is the cumulative total on her death?
£0
£175,000
£100,000
£325,000
£50,000
£50,000
Correct
Correct: The woman has made one PET of £50,000 in the last seven years.
A man gifts £500,000 into trust. If the man lives for another ten years, which one of the following is correct in relation to the inheritance tax treatment of the gift?
Tax will be payable on the man’s death at the death rate of 40%
Tax will be payable at the time of transfer at the death rate of 40%
Tax will initially be payable at the lifetime rate of 20% then reassessed at the death rate of 40%
No tax will be payable at the time of the transfer
Tax will be payable at the lifetime rate of 20%
Tax will be payable at the lifetime rate of 20%
Correct: The gift is an LCT. The man survives more than seven years after the LCT so it is not reassessed at the death rate.
Which one of the following scenarios does not include a chargeable event for inheritance tax purposes?
A PET which is made 9 years before death
An LCT and a PET made together
The death of an individual who has made no lifetime gifts
An LCT which is made 15 years before death
A PET which is made 3 years before death
A PET which is made 9 years before death
Correct: A PET made more than 7 years before death is not chargeable.
A man makes three gifts in his lifetime, each with a chargeable value of £10,000. The first gift is made 15 years before his death, the second is five years before his death and the final one is gifted in the week of his death. What is the basic Nil Rate Band available to his death estate? (There is no TNRB available.)
£295,000
£20,000
£325,000
£30,000
£305,000
£305,000
Correct: Two of the gifts were made in the seven years before the man’s death so are included in the cumulative total.
What is the maximum combined value of the nil rate bands available to the estate of a surviving spouse?
£825,000
£650,000
£500,000
It depends how many times the deceased was married as they can receive TNRB from each former spouse
£1,000,000
£1,000,000
Correct: A surviving spouse can make use of their own basic NRB (£325,000) and RNRB (£175,000) and receive a transfer of up to 100% of the basic NRB and RNRB from the estate of their deceased spouse.
A woman died two years ago and left her entire estate worth £400,000 to her husband. She made no lifetime gifts. Her husband died recently. He left his entire estate to his children. His estate was valued at £900,000 including a family home worth £500,000. He made three PETS in his lifetime totalling £500,000. All three were made over 20 years ago.
Which one of the following is correct in terms of available Nil Rate Bands?
His estate can claim a basic NRB and his wife’s basic NRB only
His estate will have no NRB available to it
His estate can claim a basic NRB, his wife’s basic NRB, his RNRB and his wife’s RNRB
His estate can claim a basic NRB only
His estate can claim a basic NRB, his wife’s basic NRB, his RNRB and his wife’s RNRB
Correct: The man and his wife both died with full basic NRB available (his PETs were made more than 7 years ago so the man’s cumulative total when he died was zero). The wife also did not use her RNRB so this is also available to transfer.
A woman died six months ago. Her estate now includes the following debts:
i. Legal fees for probate work ii. Income tax bill for period up to death iii. Credit card bill for pre-death spending iv. Funeral bill v. Post-death house clearance invoice
Which of the following correctly lists the debts that can be deducted for inheritance tax purposes?
All of them
The legal fees, income tax, credit card bill and funeral bill
The income tax, credit card bill and funeral bill
The funeral bill only
None of them
The income tax, credit card bill and funeral bill
Correct: The deceased’s income tax and pre-death liabilities are deductible, as are funeral expenses. The other expenses are not deductible for tax purposes (but can be paid from the estate assets).
A solicitor has calculated the inheritance tax due on his client’s estate. The client had never married and left her entire estate to her brother. The estate consisted of personal chattels, cash in a bank account and a house owned as joint tenants with her brother.
The solicitor has reached the wrong figure for the inheritance tax due.
Which of the following has caused the error?
When calculating the tax due, the solicitor skipped step 6 of the IHT calculation and went straight to step 7.
When calculating the cumulative total, the solicitor included three LCTs (made 4, 5 and 6 years ago) but did not include a PET (made 8 years ago).
When calculating the value of the taxable estate the solicitor deducted funeral expenses.
When valuing the taxable death estate, the solicitor did not include the deceased’s share of a house held as joint tenants with her brother because joint tenancy assets pass via survivorship.
When calculating the tax due at step 7 of the IHT calculation, the solicitor only applied the basic NRB and did not consider the availability of the transferrable NRB.
When valuing the taxable death estate, the solicitor did not include the deceased’s share of a house held as joint tenants with her brother because joint tenancy assets pass via survivorship.
Correct: Although assets owned as joint tenants pass via survivorship (and therefore do not form part of the succession estate) the deceased’s interest is still part of the taxable death estate. By failing to include the value of the deceased’s share of the house, the solicitor will have reached the wrong figure for the taxable death estate.
Which of the following is the correct order of the 7 step calculation?
Step 1 - Calculate the cumulative total Step 2 - Identify the taxable estate Step 3 - Value the taxable estate Step 4 - Apply the RNRB and NRB Step 5 - Deduct debts Step 6 - Apply exemptions and reliefs Step 7- Calculate tax
Step 1 - Calculate the cumulative total Step 2 - Identify the taxable estate Step 3 - Value the taxable estate Step 4 - Deduct debts Step 5 - Apply exemptions and reliefs Step 6 - Apply NRB Step 7- Apply RNRB and calculate tax
Step 1 - Identify the taxable estate Step 2 - Calculate the cumulative total Step 3 - Value the taxable estate Step 4 - Deduct debts Step 5 - Apply exemptions and reliefs Step 6 - Apply RNRB Step 7- Apply NRB and calculate tax
Step 1 - Calculate the cumulative total, Step 2 - Identify the taxable estate, Step 3 - Value the taxable estate, Step 4 - Deduct debts, Step 5 -Apply exemptions and reliefs, Step 6 - Apply RNRB, Step 7 - Apply NRB and calculate tax
Step 1 - Identify the taxable estate Step 2 - Calculate the cumulative total Step 3 - Value the taxable estate Step 4 - Apply the RNRB and NRB Step 5 - Deduct debts Step 6 - Apply exemptions and reliefs Step 7- Calculate tax
Step 1 - Calculate the cumulative total, Step 2 - Identify the taxable estate, Step 3 - Value the taxable estate, Step 4 - Deduct debts, Step 5 -Apply exemptions and reliefs, Step 6 - Apply RNRB, Step 7 - Apply NRB and calculate tax
Correct. It is necessary to start by calculating the cumulative total, then identify and value the taxable estate. Deduct debts from the gross value of the estate to reach the net value, then apply exemptions and reliefs. RNRB should be applied before the basic NRB, then calculate the tax.
True or False: IHT exemptions can only be used to reduce the IHT liability on a person’s death estate, or in respect of lifetimes transfers, but not both.
False
True
False
Correct
Correct: There are exemptions and reliefs that apply to both lifetime transfers and the death estate.
True or False: The basis of most IHT exemptions and reliefs is common law.
False
True
False
Correct
Correct: Exemptions and reliefs are available by virtue of statutory authority and are set out in the Inheritance Tax Act 1984. Case law relating to exemptions and reliefs usually concerns a dispute over the application of statutory rules.
True or False: The nil rate band (‘NRB’) is not an IHT exemption or relief.
True
False
True
Correct: The NRB is a 0% rate of tax. To the extent the value of a transfer falls within the NRB there is no tax to pay, which is why people sometimes confuse the NRB as an exemption/relief.
A man wants to give away some of his assets to his civil partner. Both parties are domiciled in the UK.
The man is considering making a gift of cash now and then giving the remainder of his estate to his civil partner by his will to take effect on the man’s death.
Which of the following represents the most accurate advice for the man?
The gift of cash will be exempt from IHT provided the man survives 7 years after making the transfer.
The gift of cash and the gift of the estate will be exempt from IHT irrespective of their value.
The gift of cash will be exempt from IHT. The gift of the man’s estate cannot be exempt from IHT if the man choses to leave his assets into a life interest trust.
The gift of cash and the gift of the estate will be exempt from IHT up to the value of the man’s nil rate band.
The gift of cash will not be exempt from IHT. The gift of the man’s estate will not be exempt from IHT if it is conditional upon the man’s civil partner surviving him by 28 days.
The gift of cash and the gift of the estate will be exempt from IHT irrespective of their value.
Correct
Correct: Spouse/civil partner exemption applies to lifetime transfers and to gifts made under a will – any assets passing to the man’s civil partner will be entirely free of IHT.
The other options were incorrect because:
There is no upper limit to the amount of the spouse exemption where both parties are UK domiciled.
Although the gift of cash to a person during the man’s lifetime would usually be a PET, this cash transfer is exempt by virtue of spouse/civil partner exemption and it does not matter when the man dies
The man could leave his assets into a life interest trust and spouse exemption could still apply provided the man’s civil partner is the life tenant
A standard survivorship clause in a will does not prevent the application of spouse/civil partner exemption
A woman’s will contains the following clause:
“I give £8,000 to Macmillan Cancer Support (registered charity number 261017) of [ address ] for its general purposes”
The woman has a full nil rate band (NRB) available.
How much IHT is payable on this gift?
£0 – if the value of her estate is below the NRB.
£0 – irrespective of the value of her estate.
£2,880 (£8,000 x 36%) – if her estate is valued above the NRB.
£3,200 (£8,000 x 40%) – if her estate is valued above the NRB.
£0 – because the value of the gift is below the NRB.
£0 – irrespective of the value of her estate.
Correct: Charity exemption applies and this gift is fully exempt. The size of the gift and the value of the other assets in her estate are irrelevant. The reduced death rate of IHT at 36% is only ever applied to the chargeable assets within an estate – it is not a rate of tax applied to a charitable gift itself.
True or false: All of the following are available to use in respect of both lifetime gifts and the death estate
- Political party exemption
-Exemptions for gifts for national purposes or to heritage maintenance funds
-Exemption for gifts to EBTs
-Exemption for gifts to housing associations
True
False
True
Correct
Correct: All of these are available to use in respect of lifetime transfers and the death estate. You are not required to know about these exemptions in detail.
A man entered into a business partnership with a friend. They agreed to hold the shares in their new venture on a 50:50 basis. The man died six months later.
Based on the information provided, which one of the following is correct in relation to the inheritance tax position following the man’s death?
APR will be available at 100%
APR will be available at 50%
BPR will be available at 100%
No IHT reliefs will be available
BPR will be available at 50%
No IHT reliefs will be available
Correct: The qualifying period of ownership has not been satisfied for either BPR or APR so neither relief is relevant.
A woman owns shares in a trading company called “It’s all going to be OK Ltd”. The woman purchased the shares 2.5 years ago and they are now worth £100,000. The woman does not have a controlling interest.
The woman has just died and leaves all of her taxable estate to her daughter.
Which one of the following is correct with regards business property relief?
No BPR can be claimed as she did not survive more than 3 years after having acquired the shares
BPR of £50,000 can be claimed
BPR can only be claimed in respect of the woman’s estate if her daughter keeps the shares for more than 2 years
No BPR can be claimed as she did not have a controlling interest
BPR at £100,000 can be claimed
BPR at £100,000 can be claimed
Correct
Correct. The woman owned shares in a private company (it ends with “ltd”) for more than 2 years before she died. BPR applies at 100%, ie £100,000.
The other options were incorrect because:
The 50% rate is not applicable (these are not quoted shares)
There is no requirement to have a controlling interest for a private company shareholding to qualify
The qualifying period of ownership is 2 years, not 3
The period of time her daughter owns the shares for is irrelevant when considering the availability of BPR for the woman’s estate
An unmarried woman dies owning land at an agricultural value of £300,000. The open market value of the land is £360,000. She has farmed the land herself for 5 years.
Which one of the following is correct in relation to her death estate?
APR worth £150,000 can be claimed.
If the land qualifies for BPR, this will be claimed instead of APR.
APR worth £300,000 can be claimed.
Neither APR nor BPR can be claimed.
APR worth £360,000 can be claimed.
APR worth £300,000 can be claimed.
Correct: The woman has owned and occupied the land for the purposes of agriculture for more than 2 years. The conditions of APR are met. APR can be claimed at 100% of the agricultural (not open market) value of the land. The other options are incorrect because: APR applies at 100% in this case, not 50% APR applies to the agricultural value, not market value, of the land Where both APR and BPR apply, APR takes priority.
A man dies leaving the whole of his estate to his son. No inheritance tax is payable following his death.
The man’s estate comprises only his bank accounts (£4,000), a house and its surrounding woodland (combined value of £250,000) and his personal possession (£1,500). The man purchased the house and woodland six years ago. The timber value of the land is £15,000.
Which of one of the following is correct?
Woodlands relief is not applicable.
A claim for woodlands relief can be made (with reference to the value of £15,000).
A claim for woodlands relief would be made when the man’s son sells the land.
A claim for woodlands relief can be made (with reference to the value of £250,000).
It would be preferable for the man’s estate to make use of BPR instead of woodlands relief.
Woodlands relief is not applicable.
Correct
Correct. Woodlands relief is a deferral of inheritance tax (‘IHT’) that would otherwise be payable. This is estate is not subject to IHT so there is nothing to defer.
incorrect
A claim for woodlands relief can be made (with reference to the value of £15,000).
Incorrect. Refer to your notes on woodland relief. Woodlands relief is not relevant to this estate as there is no IHT due.
A woman dies leaving a will that gives all of her estate to her sister. The woman and her sister were joint tenants of a property. The woman’s estate was taxable.
The woman’s sister dies 1 year later leaving her own estate (which includes assets inherited from the woman) to her children. The sister’s estate was not subject to IHT.
Which of the following is correct with regards quick succession relief (‘QSR’)?
QSR would apply to the woman’s estate but cannot apply to the value of the property as this passed automatically to the sister by survivorship.
QSR does not apply to either estate.
QSR would apply to the sister’s estate only.
QSR would apply to the woman’s estate only.
QSR would apply to both the woman and the sister’s estate.
QSR does not apply to either estate.
Correct
Correct. For QSR to apply both relevant estates must have been taxable –here the sister’s estate was not subject to IHT. The other options were incorrect as QSR does not apply.
incorrect
QSR would apply to the woman’s estate only.
Incorrect. Refer to your materials relating to QSR. Ensure you appreciate when this relief will apply; crucially there needs to have been an IHT charge in respect of both estates. The sister’s estate cannot benefit from a credit against an IHT charge of zero.
A man dies and his estate comprises cash, a partnership interest, and a car (which he inherited from his brother 6 months ago). The man leaves a will that includes cash gifts to his spouse (£10,000) and a local registered charity (£2,000).
Which one of the following exemptions cannot be considered when calculating the IHT liability in respect of the man’s death estate?
Business property relief
Annual exemption
Quick succession relief
Charity exemption
Spouse exemption
Annual exemption
Correct. The annual exemption cannot be claimed in respect of a person’s death estate. The other exemptions and reliefs were all potentially relevant:
BPR in respect of the partnership interest
Spouse exemption in respect of the £10,000 gift in his will
Charity exemption in respect of the £2,000 gift in his will
Quick succession relief in respect of the car he inherited from his brother
The deceased’s gross estate is valued at £410,000. The estate includes foreign property worth £150,000. The deceased is a life tenant of a life interest trust with a capital value at date of death of £20,000. The deceased had never married and had made no lifetime gifts and left his entire estate to his two children.
Which of the following correctly describes the status of the estate?
An exempt excepted estate - the estate is worth less than £650,000.
A non-excepted estate.
A low value excepted estate - the estate is worth less than £650,000.
An exempt excepted estate - the estate is worth less than £325,000.
A low value excepted estate - the estate is worth less than £325,000.
A non-excepted estate.
Correct
Correct. The gross value of the estate is above the nil rate band (only one is available) and no spouse or charity exemption applies. IHT is payable and also the value of foreign property is greater than £100,000.
The other options were incorrect because tax was payable on this estate so the estate could not be excepted.
The deceased’s gross estate is valued at £300,000. The estate includes foreign property worth £90,000. The deceased is a life tenant of a life interest trust with a capital value at date of death of £270,000. The deceased had never married and had made no lifetime gifts.
Which of the following correctly describes the status of the estate?
A low value excepted estate - the estate is worth less than £325,000.
An exempt excepted estate - the estate is worth less than £325,000.
An exempt excepted estate - the estate is worth less than £650,000.
A low value excepted estate - the estate is worth less than £650,000.
A non-excepted estate.
A non-excepted estate.
Correct
Correct. Although the gross value of the estate is below the NRB and no IHT is payable, because the value of the trust property is above £250,000 this estate cannot be excepted.
The other options were incorrect as they did not take into account the value of the trust interest.
A deceased’s estate is valued at £200,000 (which includes foreign property worth £75,000). In addition, the deceased is a life tenant of a life interest trust with a capital value at date of death of £100,000. The deceased had never married but had made relevant lifetime gifts in the past seven years totalling £10,000.
Which of the following correctly describes the status of the estate?
A non-excepted estate.
A low value excepted estate - the estate is worth less than £650,000.
A low value excepted estate - the estate is worth less than £325,000.
An exempt excepted estate - the estate is worth less than £325,000.
An exempt excepted estate - the estate is worth less than £650,000.
A low value excepted estate - the estate is worth less than £325,000.
Correct
Correct. The gross estate is less than the nil rate band, foreign property is less than £100,000, trust property is less than £250,000 and lifetime gifts are less than £250,000. The deceased had never married so no transferrable NRB applies and the relevant NRB amount to consider was £325,000.
The other options were incorrect because no spouse or charity exemption applied (so the estate could not be an exempt excepted estate), the relevant NRB threshold to consider was a single NRB, and the value of the assets described were below the values at which the estate would be prevented from being excepted.
A man died and by his valid will left the whole of his estate to his adult children.
The man’s civil partner died before the man and left the man the whole of his estate.
Neither the man nor his civil partner had made any lifetime transfers.
The man’s estate was valued at £1.5 million, which includes his home worth £500,000.
What is the value of the inheritance tax nil rate band available for the man’s estate?
£1,000,000
£650,000
£500,000
£325,000
£825,000
£1,000,000
Correct
Correct.
The man has his own NRB of £325,000.
The man’s PRs can also claim the TNRB in respect of his civil partner who died before him. We know that the man’s civil partner left all of his estate to the man. Therefore, the man’s civil partner did not use his own NRB because his whole estate qualified for civil partner exemption.
The RNRB of £175,000 also applies. The man left a qualifying residential interest (his home) to his lineal descendants (his children). As the man’s civil partner did not use his own RNRB, this can also be claimed by the man.
As neither of them made any lifetime transfers the maximum amounts are available.
A woman died and by her valid will left the whole of her estate to her adult children.
The woman’s civil partner died before the woman and left the woman the whole of her estate.
Neither the woman nor her civil partner had made any lifetime transfers.
The woman’s home is worth £700,000 and she had savings of £400,000 and other assets worth £1.6 million.
What is the value of the inheritance tax nil rate band available for the woman’s estate?
£1,000,000
£650,000
£325,000
£500,000
£825,000
£650,000
Correct.
The woman has her own NRB of £325,000.
The woman’s PRs can also claim the TNRB in respect of her civil partner who died before her. We know that the woman’s civil partner left all of her estate to the woman. Therefore, the woman’s civil partner did not use her own NRB because her whole estate qualified for civil partner exemption.
As neither made any lifetime transfers the maximum amounts are available.
The RNRB does not apply as the total value of the woman’s estate is above the threshold.
£825,000
There is no RNRB available at all for net estates worth £2,350,000 or more.
A property was purchased as tenants in common by an unmarried couple in unequal shares. The woman owned 80% and the man owned 20%.
The woman died last month and by her will leaves her share of the property to her son absolutely.
The current market value of the property is £100,000. There is no mortgage.
The woman’s estate will be subject to inheritance tax (IHT).
What will be the value of woman’s share of the property for IHT purposes?
£80,000 less a discount to reflect the fact that the property was co-owned.
£80,000 - no discount is available because the related property rules apply.
£0 as the property passes by survivorship.
£50,000 less a discount to reflect the fact that that the property was co-owned.
£80,000 - no discount is available because the couple were not married.
£80,000 less a discount to reflect the fact that the property was co-owned.
Correct
Correct: The value of the woman’s share is £80,000 (she owned 80% of the total worth £100,000). The woman co-owned the property and a discount to reflect the fact that the property was co-owned can be applied.
The other options were incorrect because:
- The property does not pass by survivorship, but in any event, the value of the woman’s share is taxable whether owned as joint tenants or tenants in common
- The value of her share is proportionate to share she owned, not the number of co-owners. A 50/50 split applies to joint tenants and those owning as tenants in common in equal shares.
- The related property rules apply to married couples and are not relevant here.
- A discount is available because the couple were not married. It would not have been available if they were.
A man died yesterday leaving his whole estate to his son. The man had never married or entered a civil partnership and had not made any lifetime gifts.
His estate comprised his home worth £150,000 (free of mortgage) which he had lived in for over 20 years and various bank accounts totalling £340,000. He also owned a house worth £180,000 free of mortgage which was rented out to tenants and had never been his residence.
The man’s debts and funeral expenses totalled £20,000.
In the tax year of the man’s death, the basic nil rate band is £325,000 and the main residence nil-rate band is £175,000.
How much inheritance tax will be payable on the man’s estate?
£0
£70,000
£60,000
£78,000
£130,000
£70,000
Correct
Correct.
Step 1: The man’s cumulative total was 0 as he made no lifetime gifts.
Steps 2/3: The man’s taxable estate includes both properties and the bank accounts with a total of £670,000.
Step 4: The man’s debts and funeral costs which total £20,000 can be deducted, leaving £650,000.
Step 5: No exemptions or reliefs apply.
Step 6: The man can claim his own RNRB. No transferrable RNRB applies as he does not have a spouse who pre-deceased. His main residence is a QRI and it passes to his son (a lineal descendent) absolutely. The amount of the RNRB is £150,000 (capped at the value of the QRI). The let property is not a QRI so an RNRB can be claimed. The total RNRB is: £150,000. Once applied to his estate, £650,000 - £150,000 = £500,000 remains.
Step 7: The man’s basic NRB is £325,000 (his cumulative total was 0 – so no deduction is made). No transferrable NRB applies as he did not have a pre-deceasing spouse.
0 - £325,000 @ 0%. Balance of £175,000 (£500,000 - £325,000) @ 40% = £70,000.
A man died yesterday leaving his whole estate to a life interest trust. The man’s spouse and children survive him. The man’s spouse is the life tenant of his will trust and his children are the remaindermen.
The man had not made any lifetime gifts.
His estate comprised his home worth £500,000 (free of mortgage) and various bank accounts totalling £120,000. The man’s debts and funeral expenses totalled £8,000.
In the tax year of the man’s death, the basic nil rate band is £325,000 and the main residence nil-rate band is £175,000.
How much inheritance tax will be payable on the man’s estate?
£244,800
£130,000
£78,000
£0
£114,800
£0
Correct
Correct: The whole of the man’s estate passes to a life interest trust in which his spouse is the life tenant. Spouse exemption applies to the whole estate and no inheritance tax is payable. The other options were incorrect because spouse exemption was not applied.
£114,800
Incorrect
Incorrect: Review your materials relating to inheritance tax. You have not considered the IHT implications of a person leaving their estate to a life interest trust and naming their spouse as the life tenant.
Is the following statement True or False?
“Estate Administration is the process of collecting in the deceased’s assets and distributing them to the correct beneficiaries”.
False
Correct
This was an incomplete statement. The administration process also includes other obligations, including payment of the deceased’s debts and administration expenses.
Is the following statement True or False?
“Where an executor is appointed by the will their power to act as PR derives from this appointment. Therefore, executors will not usually need to apply for a grant of representation.”
False
Correct
The authority for an executor to act as PR does derive from the will, whereas the authority for an administrator to act derives from the grant of representation. However, an executor will still need to apply for a grant of representation because many institutions will insist on seeing the grant as proof of the executor’s authority to act before releasing funds/assets to them.
Is the following statement True or False?
“Once the grant of representation is obtained the PRs have authority to collect in and deal with all the assets that the deceased owned when they died.”
False
Correct
The grant of representation confers power on the PRs to deal with the succession estate assets, ie those items passing under the will or under intestacy, and does not, for example, give PRs the right to have assets passing by survivorship transferred into their name.
True/False: An executor may also be a trustee of the estate they administer.
False
True
True
Correct
The executor of an estate may be expressly appointed in the role of trustee of any trust that arises following death, but that this is not always the case.
True/False: Acting as a PR confers a fiduciary duty and therefore a beneficiary should not act as PR because this will give rise to a conflict of interest.
False
True
False
Correct
The role of a PR is fiduciary in nature but there is no prohibition on a PR also being a beneficiary. There is no conflict of interest as the PR does not receive benefit in their capacity as PR.
True/False: A solicitor may be involved with the estate administration even if they have not been appointed as PR.
True
False
True
Correct
A solicitor may become involved if they are appointed as PR by a will or if the PRs instruct a solicitor to carry out administrative services.
Is the following statement true or false?
“If an estate has not been fully administered 12 months after the deceased’s death the PRs will be in breach of their duty under s.44 Administration of Estates Act 1925?”
False
Correct
Correct. There is no duty to complete the administration within the “executor’s year”. A PR is not obliged to distribute the estate before the one-year anniversary of death, although after this period they must be able to justify any delay.
Your client will be appointed as the PR of an estate. Your client has not yet made an application for a grant.
Which of the following most accurately describes the current statutory duties of your client?
A duty to report to HMRC about the estate assets and liabilities and pay any inheritance tax due.
A duty to collect in the deceased’s assets and administer them according to law.
A duty to report to HMRC about the estate assets and liabilities and pay any inheritance tax due and administer the estate according to the law.
There are no statutory duties that apply until the grant has been issued.
A duty to collect in the deceased’s assets, administer them according to law and keep estate accounts.
A duty to report to HMRC about the estate assets and liabilities and pay any inheritance tax due.
Correct
Correct. Prior to the grant the PR is not able to collect in and administer the deceased’s assets and the primary duty the PR has is to report to HMRC and pay the IHT, both of which must be completed before the grant is issued.
You are advising a client who has been appointed as the sole executor of his father’s estate. The executor has just obtained the grant of probate and does not act in a professional capacity.
The executor has asked whether he must complete the administration of the estate now he has started and whether he may buy one of the properties from the estate.
There are no relevant express provisions in the will.
Which of the following is correct?
The executor has a duty to administer the estate. The executor has the power as PR to sell estate assets and fiduciary duties do not apply because he is not acting as a trustee.
The executor has a duty to administer the estate. The executor has the power as PR to sell estate assets. If he acted as the purchaser he would be in breach of his fiduciary duty, even if a fair price was paid (unless consent of the court or beneficiaries was obtained).
The executor does not have to administer the estate but any administrative steps he does take must be done with due diligence. The executor has the power as PR to sell estate assets but if he acted as the purchaser, he would be in breach of his fiduciary duty even if a fair price was paid.
The executor does not have to administer the estate but any administrative steps he does take must be done with due diligence. The executor has the power as PR to sell estate assets and may act as the purchaser provided the price paid was full market value.
The executor has a duty to administer the estate. The executor has the power as PR to sell estate assets and may act as the purchaser provided the price paid was full market value and there is no loss to the estate.
The executor has a duty to administer the estate. The executor has the power as PR to sell estate assets. If he acted as the purchaser he would be in breach of his fiduciary duty, even if a fair price was paid (unless consent of the court or beneficiaries was obtained).
Correct
Correct. An executor who accepts office has a duty to administer the estate in full under s.25 AEA. A PR is subject to fiduciary duties which include the duty to avoid a position of conflict. Acting as both buyer and seller of the estate assets (without court or beneficiary authorisation) would place him in a position of conflict and would therefore breach that duty, even if there was no loss suffered to the estate and fair market value was paid.
By her will a testator left a legacy of £500 to her granddaughter (G), who was 16 at the date of T’s death. The will does not amend any of the statutory powers or include any express administrative provisions.
Assuming T’s PRs wish to distribute this amount as soon as possible, which of the following is the most appropriate course of action?
The PRs have the power to pay the money to G because she is over the age of 16.
The PRs cannot give the money to G directly but can appoint trustees of the legacy and pay the money to the trustees.
The PRs must wait until G reaches the age of 18 before distributing the legacy.
The PRs must wait until G reaches the age of 18 or marries before distributing the legacy.
The PRs have discretion to pay the money to G if they consider she is responsible enough to receive the money direct.
The PRs cannot give the money to G directly but can appoint trustees of the legacy and pay the money to the trustees.
Correct
Correct. By s.42 Administration of Estes Act 1925 the PRs may appoint trustees of a legacy and pay the amount of the legacy to the trustees, who hold on trust for the minor beneficiary. The trustees will provide confirmation of the receipt to the PRs and so the administration can be completed.
The other options were incorrect because: - There is no discretion to pay the money directly to a minor - The PRs do not have to wait until the minor reaches 18 or married - The power to pay the money to a beneficiary aged 16 or older must be conferred by the will and in this scenario we know that the will does not contain any administrative provisions
A testator died yesterday leaving an estate worth £3 million. The assets include £1 million cash in a current account (being the sale proceeds from a recent property sale). The current rate of interest is very low.
The PRs are concerned about their obligations in relation to the estate assets and believe the administration will not be completed for some time.
Which of the following statements is correct?
The PRs would only be subject to the statutory duty of care when exercising their power to invest the estate assets if they were acting in capacity as a trustee.
The PRs have a duty to invest the cash in the bank account to achieve a greater rate of return than the current rate of interest.
The PRs have complete discretion to invest cash in the bank account in any kind of assets as if they were absolutely entitled.
The PRs should retain the bank account as it is because this was the original asset owned by the deceased.
The statutory power to invest does not apply to the PRs unless an express trust has been created by the testator’s will.
The PRs have a duty to invest the cash in the bank account to achieve a greater rate of return than the current rate of interest.
Correct
Correct. As the administration is likely to take time the PRs have a duty to maintain the estate and actively invest to achieve better rates of return than are being paid in respect of the current account.
The other answers were incorrect because: - Although the general power of investment gives the PRs the power to invest as if they were absolutely entitled, their discretion is not absolute. They must invest having regard to the standard investment criteria and must seek and follow appropriate advice. - The statutory power to invest (s.3 Trustee Act 2000) does apply to PRs - There is no obligation to retain original assets - The statutory duty of care applies to the exercise of investment powers and is applicable to PRs as well as trustees.
A testator died recently leaving a cash legacy of £10,000 to his friend.
The executors have identified a small portfolio of quoted shares in the estate currently worth £8,000 that they would like to transfer to the friend in part satisfaction of his legacy. The shares have not been specifically gifted to anyone under the will and the residue of the estate passes to the testator’s spouse.
The will does not contain any express administrative provisions.
Assuming the shares do not subsequently increase in value to more than £10,000, which of the following would be the most appropriate advice for the executors?
Transfer the shares to the friend plus a cash sum equivalent to the difference in value between the shares (at the date of appropriation) and £10,000.
Transfer the shares to the friend.
Transfer the shares to the friend, but only if the spouse consents.
Transfer the shares to the friend plus a cash sum of £2,000.
Transfer £10,000 to the friend. They have no power to transfer shares in partial satisfaction of the cash legacy.
Transfer the shares to the friend plus a cash sum equivalent to the difference in value between the shares (at the date of appropriation) and £10,000.
Correct
Correct. S.41 AEA provides the PRs with the power to appropriate assets in or towards a beneficiary’s entitlement. As the value of the shares is less than the legacy the PRs may appropriate the shares and then make a balancing cash transfer of the difference. The consent of the residuary beneficiary is not required as the shares were not specifically given to them.
You are advising a creditor of an estate who is concerned they will not receive money they are owed.
Assuming there are sufficient funds available to meet all debts and legacies but the creditor is not paid, which of the following is correct?
The creditor may bring a devastavit claim against the PRs on the grounds of maladministration.
There is no cause of action that can be brought against the PRs as their duties are only owed to the beneficiaries of an estate.
The creditor may bring a claim against the PRs on the grounds of breach of fiduciary duty.
If the creditor cannot bring a claim against the PRs there is no alternative option for them to pursue.
The creditor may only bring a claim against the PRs if the administration of the estate is not yet complete and enough money remains to pay the debt.
The creditor may bring a devastavit claim against the PRs on the grounds of maladministration.
Correct
Correct. A claim against a PR is referred to as a devastavit. Where the estate has not been distributed to those who are entitled to it the grounds for a claim would be maladministration.
The other options were incorrect because:
- Duties are owed to both beneficiaries and creditors
- The wrongdoing would not amount to a breach of fiduciary duty
- An unpaid creditor could also claim against the estate beneficiaries
- The PRs owe a personal liability to a creditor who was not paid from the estate
The PRs of an estate are due to distribute assets to the deceased’s children. They have been in contact with the children of the deceased’s marriage but are concerned that the testator could have fathered other children who the PRs and immediate family are unaware of.
Which of the following would help protect the PRs from personal liability should any additional children approach the PRs for a share of the estate after it has been distributed?
Application to court for an administration action.
Making a payment into court.
Compliance with the s.27 Trustee Act 1925 notice procedure.
Retaining funds and delaying the completion of the administration indefinitely.
Application to court for a Benjamin Order.
Compliance with the s.27 Trustee Act 1925 notice procedure.
Correct
Correct. S.27 notices are intended to help protect the PRs from personal liability to unknown creditors and beneficiaries. The other options are possible steps a PR might take if they know about a beneficiary but cannot locate them.
incorrect
Making a payment into court.
Incorrect
Incorrect. Refer to your materials relating to PR protection. A payment into court would not be useful in relation to an unknown beneficiary.
You are advising a lay executor about their duties. The deceased left a will that includes an express clause stating “no executor shall be personally liable for any action or inaction taken in the course of the administration”.
Which of the following is correct?
The clause is effective and the executor will not have any personal liability.
Despite the express clause in the will the executor would remain liable for fraud.
The clause is not required because the executor is not acting in a professional capacity.
The clause is not effective as it is not possible to limit the liability of an executor.
The clause would not protect the executor from loss resulting from an honest mistake.
Despite the express clause in the will the executor would remain liable for fraud.
Correct
Correct. A clause which limits the executor’s liability is enforceable but not to the extent it attempts to avoid liability for fraud.
The other options were incorrect because:
- it is not possible to remove all personal liability irrespective of how the executor behaves.
- both lay and professional executors have personal liability
- limitation of liability clauses are enforceable in respect of an honest mistake
A deceased died leaving a valid will that appoints their brother as executor. The deceased’s will leaves a property to their spouse and the rest of the estate to their two minor children.
The deceased is survived by their brother and children. Their spouse has pre-deceased and the deceased has died partially intestate.
Which is the correct grant?
Grant of letters of administration (with will)
Grant of letters of administration
Grant of probate
Grant of double probate
Grant of Representation
Grant of probate
Correct
Correct. The deceased left a will that appoints an executor. It does not matter that the deceased died partially intestate and only one executor is required even where minor interests arises.
A deceased died leaving a valid will that appoints their brother and sister as joint executors.
The will gives all of the estate to the deceased’s brother.
The deceased is survived by their sister and she is willing to act. The deceased’s brother pre-deceased him so some of the estate will pass under the intestacy rules.
Which is the correct grant?
Grant of probate
Grant of letters of administration
Grant of letters of administration (with will)
Grant of Representation
Grant of double probate
Grant of probate
Correct
Correct. The deceased left a will that appoints an executor. It does not matter that one of the executors has pre-deceased, the remaining executor can apply. It does not matter that the will fails to dispose of all of the deceased’s assets.
A testator died leaving a valid will appointing their father as executor. The will gives all of the estate to the testator’s brother. The testator is survived by their brother, but their father has pre-deceased.
Which is the correct grant?
Grant of letters of administration (with will)
Grant of probate
Grant of double probate
Grant of letters of administration
Grant of Representation
Grant of letters of administration (with will)
Correct
Correct. The deceased left a will which does not appoint any executors who can act.
You are instructed to assist with the administration of an estate which contains the following assets:
- Property owned as tenants in common
- Building Society account with £2,000
- Furniture
- Life policy where proceeds of £100,000 are payable to the estate
Which of the following correctly states whether or not a grant of representation is needed to administer these assets?
A grant is required to deal with the property and the life policy only.
A grant is required to deal with the building society account, furniture, and life policy proceeds only.
A grant is required to deal with the property, building society account and life policy proceeds only.
A grant is required to deal with all of the assets.
The estate could be administered without the need for a grant.
A grant is required to deal with the property and the life policy only.
Correct
Correct. A grant is required to deal with assets within the succession estate unless an exception applies. A property owned as tenants in common, and a life policy where proceeds are payable to the estate, are items that fall within the succession estate and will require the PRs to take out a grant to deal with them. The account with a balance of less than £5,000 could be collected under the exception in the Administration of Estates (Small Payments) Act 1965 and no grant is required to deal with household possessions.
incorrect
A grant is required to deal with all of the assets.
Incorrect
Incorrect. Review your materials and ensure you appreciate which items may be dealt with without the need for a grant. Consider the treatment of building society accounts with less than £5,000 and personal household possessions.
You are instructed to assist with the administration of an estate which contains the following assets:
- Property owned as joint tenants - Building society account with £2,000 - Furniture - Life policy where proceeds have been nominated for the deceased’s spouse
Which of the following correctly states whether or not a grant of representation would be required to deal with the assets?
The estate could be administered without the need for a grant.
A grant is required to deal with the property, building society account and life policy proceeds only.
A grant is required to deal with the property and the life policy only.
A grant is required to deal with all of the assets.
A grant is required to deal with the building society account, furniture and life policy proceeds only.
The estate could be administered without the need for a grant.
Correct
Correct. A property owned as joint tenants does not fall within the succession estate and passes under survivorship rules. The life policy proceeds do not fall within the succession estate and may be paid directly to the deceased’s spouse. The building society account with a balance of less than £5,000 could be collected under the Administration of Estates (Small Payments) Act 1965 and no grant is required to deal with household possessions.
You are instructed to assist with the administration of an estate which contains the following assets:
- Property owned as tenants in common
- Bank account with £60,000
- Furniture
- Life policy where proceeds have been nominated for the deceased’s spouse
Which of the following correctly states whether or not a grant of representation would be required to deal with the assets?
A grant is required to deal with all of the assets.
A grant is required to deal with the property and the bank account only.
The estate could be administered without the need for a grant.
A grant is required to deal with the bank account, furniture, and life policy proceeds only.
A grant is required to deal with the property and the life policy only.
A grant is required to deal with the property and the bank account only.
Correct
Correct. The life policy proceeds do not fall within the succession estate and may be paid directly to the deceased’s spouse and no grant is required to deal with household possessions. The deceased’s share of property owned as tenants in common will pass as part of the succession estate and a grant is required. As there is more than small amount in the bank account this would usually require a grant to be provided before the bank would release the funds.
A deceased owned the following assets among their personal possessions:
- Dining table (worth approximately £200 if sold but would cost £1,500 to replace)
- Painting worth approximately £300 (sale and replacement value are similar)
- Diamond ring worth approximately £6,000 (sale and replacement value are similar)
Regarding the value of the assets, which of the following would be the most appropriate?
The PRs should obtain a professional valuation for the dining table and ring but may record an estimated value for the painting.
The PRs should obtain a professional valuation for all of the assets.
The PRs should obtain a professional valuation for the ring but may record estimated values for the dining table and the painting.
The PRs may record estimated values for all of the assets.
The PRs should obtain a professional valuation for the dining table and the painting but may record an estimated value for the ring.
The PRs should obtain a professional valuation for the ring but may record estimated values for the dining table and the painting.
Correct
Correct. The sale value of the assets at the date of death is relevant. Estimated figures may be used for ‘low value’ chattels, which would include the dining table (£200 sale value) and the painting (£300). The ring is a single item worth more than £500 so a professional valuation should be obtained.
You have been appointed as an executor of an estate jointly with the deceased’s adult son. The deceased’s assets comprised a car, a bank account and a small partnership interest in their sole name. The deceased owned his home and personal chattels as joint tenants with his spouse.
The deceased’s surviving spouse has already registered the death and is currently arranging the funeral.
Which of one of the following does not need to be carried out by the executors?
Transferring the house and chattels into the name of the executors.
Valuing the deceased’s debts.
Locating the original will.
Notifying assets holders of the deceased’s death.
Arranging a professional valuation of the business.
Transferring the house and chattels into the name of the executors.
Correct
Correct. The joint tenant property passes automatically to the survivor under the survivorship rules and does not form part of the succession estate for administration purposes and would not be transferred into the names of the executors.
incorrect
Notifying assets holders of the deceased’s death.
Incorrect
Incorrect. Refer to your materials regarding the obligation of the PRs in respect of assets passing outside of the succession estate.
You have been instructed by the executors of an estate to assist with the administration.
The deceased owned a property jointly with his brother and held a joint bank account with his son.
When preparing a schedule of assets in respect of the deceased’s estate which of the following is correct?
The deceased will be deemed to own 50% of the property. Further enquiries are needed to establish whether or not the deceased held a 50% share of the bank account.
Further enquiries are needed to establish whether or not the deceased held a 50% share of the property and joint bank account.
The deceased will be deemed to own 50% of the property and 100% of the bank account (because this passes by survivorship).
The deceased will be deemed to own 50% of the bank account. Further enquiries are needed to establish whether or not the deceased held a 50% share of the property.
The deceased will be deemed to own 50% of both the property and the joint bank account.
Further enquiries are needed to establish whether or not the deceased held a 50% share of the property and joint bank account.
Correct
Correct. Where an asset is owned jointly (whether a property or bank account) enquiries are needed to establish what the terms of that co-ownership are. You cannot assume that the deceased held a 50% share or that all joint property is owned as joint tenants.
The other options were incorrect because it was assumed that the deceased owned 50% of one or both of the assets.
incorrect
The deceased will be deemed to own 50% of both the property and the joint bank account.
Incorrect
Incorrect. Review your materials regarding the valuation of the estate. Is it always the case that 50% ownership can be presumed where the deceased owned assets with another person?
A testator died leaving a will that appoints their civil partner, sister and brother jointly as executors.
The testator’s civil partnership was subsequently dissolved and the testator’s sister has pre-deceased.
Which of the following correctly states who is entitled to apply for the grant of representation?
The brother
The brother and the sister’s own executor
The brother or civil partner
The brother and civil partner
The brother or the sister’s own executor
The brother
Correct
Correct. The civil partner cannot act because of the effect of s.18C Wills Act 1837. The sister’s executor cannot act because the chain of representation does not apply in this scenario. The brother may apply as the sole surviving executor.
A testator died leaving a will that appoints A, B, C, D and E as joint executors.
A is aged 17. B, C, D and E are adults.
Which of the following most accurately explains who will take out the grant of probate?
A, B, C, D and E
B, C , D and E. Power cannot be reserved to A because they are a minor.
A, B, C, D as the first named executors to the maximum of four.
B, C, D and E. Power may be reserved to A who could apply once they reach the age of 18.
B, C, D and E. A cannot act because an appointment of a minor is invalid.
B, C, D and E. Power may be reserved to A who could apply once they reach the age of 18.
Correct
Correct. A minor may be appointed by will but cannot act until they reach the age of 18. Power may be reserved to them until this time. A maximum of four executors may apply, so B, C, D and E can be named on the grant.
For which of the following estates might the chain of representation apply?
- Testator A appoints a sole executor who survives A but dies before taking out the grant in A’s estate.
- Testator B appoints two executors, one of whom dies after taking out the grant in B’s estate. The other wishes to act.
- Testator C appoints an executor who has died before C.
- Testator D appoints an executor who dies intestate after taking out the grant in D’s estate.
B’s estate
None of them
A’s estate
C’s estate
D’s estate
None of them
Correct
Correct. The chain of representation only applies where a sole surviving executor, who has taken out a grant of probate, dies before administering the estate and appoints their own executor in turn.
The others were incorrect because:
Estate A: the executor died before taking the grant. Estate B: there is a surviving executor who will act Estate C: the executor did not survive the testator Estate D: the sole surviving executor died intestate so cannot have appointed an executor for their own estate.
Your client has died intestate and is survived by their spouse and two children, one aged 20 and the other aged 15. The deceased’s spouse and children are all entitled to inherit from the estate under the intestacy rules.
Which one of the following statements is correct in relation to the administration of the estate?
The testator’s eldest child can apply on their own to act as sole administrator.
The testator’s spouse can apply on their own to act as sole administrator because they will be the primary beneficiary under the deceased’s intestacy.
The testator’s spouse can apply with either of the children to act as joint administrators.
The testator’s spouse cannot act as sole administrator because one of the two children is a minor.
The testator’s spouse cannot act as sole administrator because the role of administrator is a fiduciary one and they will be in a position of conflict with the children.
The testator’s spouse cannot act as sole administrator because one of the two children is a minor.
Correct
Correct. Where administrators are needed for an estate a minimum of two must be appointed where any minor interest arises (s.114 Senior Courts Act 1981). There will be a minor interest under the deceased’s intestacy because one of the children is only 15. The other options were wrong because: - Two administrators are required - A minor cannot act - There is no conflict where a PR is also one of the beneficiaries
incorrect
The testator’s spouse can apply on their own to act as sole administrator because they will be the primary beneficiary under the deceased’s intestacy.
Incorrect. Refer to your materials regarding the number of PRs required where a minor interest arises.
A deceased died leaving a valid will that appoints their adult brother as executor. The deceased’s will leaves a cash lump sum to the deceased’s two adult children and the residue of the estate to their spouse.
The deceased is survived by their spouse and children. The deceased’s brother has pre-deceased.
There are no trustees of the residuary estate.
Who should apply for the grant of representation?
The deceased’s spouse under NCPR 22 because they were married to the deceased.
The deceased’s spouse under NCPR 20 because they are the residuary beneficiary.
The PR of the deceased’s brother.
The deceased’s spouse and at least one of the children – 2 PRs are required.
The deceased’s spouse and both children because they are all estate beneficiaries.
The deceased’s spouse under NCPR 20 because they are the residuary beneficiary.
Correct
Correct. The deceased left a will that does not appoint an executor who is able to act (the appointed brother has died before the testator). Therefore, an administrator will need to be appointed under NCPR 20. Only one person is required as there are no life or minor interests and the surviving spouse has the best right to apply, as the residuary beneficiary.
A man died intestate. The man never married or entered a civil partnership.
He has two sons (20 and 18) and a daughter (15) from a long-term relationship with a woman.
The children are the only beneficiaries of the man’s estate under his intestacy.
Which of the following most accurately explains who may apply for a grant?
Both sons and the woman (on behalf of the daughter) although applications made by the sons will be preferred over the woman’s.
Both sons and the woman (on behalf of the daughter). All three have equal entitlement.
Any of the children.
The woman on her own behalf.
Either son.
Both sons and the woman (on behalf of the daughter) although applications made by the sons will be preferred over the woman’s.
Correct
Correct. Under Rule 22 (1) (b) all three children have equal entitlement to apply. However, the daughter is a minor and cannot apply on her own behalf. The woman can apply on behalf of the daughter but the court will prefer an application by an adult in their own capacity (i.e. the sons) over an application made on behalf of a minor.
incorrect
Both sons and the woman (on behalf of the daughter). All three have equal entitlement.
Incorrect. Where an application is made on behalf of a minor, does the court treat this equally to one made by an adult in their own capacity within the same category of entitlement?
A testator made a valid will appointing their civil partner, mother and son (17) jointly as executors.
The testator’s civil partnership was dissolved after the will was executed.
The testator’s mother does not have mental capacity.
There are no relevant express provisions in the will.
Who may apply for a grant of probate?
The civil partner only
Civil partner and the mother only
The mother and the son
All three executors named in the will
None of the executors named in the will
None of the executors named in the will
Correct
Correct. The testator’s former civil partner cannot act (s.18C Wills Act 1837) unless the will expressly states otherwise (which it does not). A minor and someone who lacks capacity are both unable to act.
A deceased died intestate and their estate passes to their spouse and two children (one of whom is a minor).
The spouse has not applied for a grant but has been dealing with the estate administration and has arranged for the sale of the deceased’s property. However, the spouse no longer wishes to be involved with the administration.
Which of the following would you advise?
Renunciation
Acting alone
Reserving power
Doing nothing
Renunciation
Correct
Correct. The spouse with an entitlement to apply as administrator may renounce that right even if she has intermeddled. The other options were incorrect because: - Reserving power is not an option for administrators - She cannot act alone where there is a minor interest - Doing nothing is not a viable option
A testator’s will appointed their spouse and sister as joint executors.
The testator’s sister reserved power and a grant of probate was issued to the deceased’s spouse. The testator’s spouse has not yet completed the administration.
Which of the following most accurately describes the sister’s entitlement to act in the administration?
The sister can act as PR under the original grant issued in the spouse’s name because the sister is named in the will.
The sister can apply for a grant of probate.
The sister can act under the original grant provided it mentions that notice of the reservation was given to the testator’s spouse at the time the grant was issued.
The sister can apply for a grant of double probate.
The sister cannot apply for a grant.
The sister can apply for a grant of double probate.
Correct. The 2nd grant issued in the estate is a grant of double probate. The other options were incorrect because;
- the new grant was incorrectly stated
-the sister has no entitlement to act under the grant originally issued in the sole name of the spouse
- reserving power does not preclude a later application when the administration is still ongoing
-the original grant will have referred to notice having been given to the sister who reserved power
A deceased died without leaving a will. The estate is shared between their spouse and three children (two of whom are minors). No IHT is payable. A paper form will be used for this estate.
Which one of the following statements most accurately describes the requirements when applying for the grant?
The PA1P is required and an administrator will be appointed under NCPR 20.
The PA1A is required and at least two administrators will be appointed under NCPR 22.
The PA1P is required and at least two administrators will be appointed under NCPR 22.
The PA1A is required and an administrator will be appointed under NCPR 22.
The PA1A is required and at least two administrators will be appointed under NCPR 20.
The PA1A is required and at least two administrators will be appointed under NCPR 22.
Correct
Correct. Where the deceased died without making a will the correct form is the PA1A. Two administrators are required because there will be at minor interests.
Which of the following best describes what an applicant under NCPR 22 will always need to do when applying for a grant?
Confirm their familial relationship with the deceased
Confirm their beneficial entitlement to the estate
Clear-off other applicants
Confirm the validity of the deceased’s will
Confirm their familiar relationship with the deceased and their beneficial entitlement to the estate
Confirm their familiar relationship with the deceased and their beneficial entitlement to the estate
Correct
Correct. If NCPR 22 applies the deceased died intestate. The entitlement to apply derives from the relationship with the deceased and their right to receive a share of the estate under intestacy, so both must be stated. The other options were incorrect because:
- they were either incomplete or: - It is not always necessary to clear-off anyone else e.g. when the person with the greatest entitlement will be applying. - If NCPR 22 applies the deceased did not leave a valid will
Which of the following is correct with regards an application for a grant of probate?
The application cannot be made online.
The grant can only be issued in the name of an executor as it appears in the will.
The value of the deceased’s taxable estate will be noted on the grant.
The application only needs to refer to those executors named in the will who are applying.
The grant can be issued in the deceased’s true name and also any common name in which they held assets.
The grant can be issued in the deceased’s true name and also any common name in which they held assets.
Correct
Correct. The full name of the deceased should be included in the application and where the deceased owned assets in a common name this should also be stated so the grant can be issued in both names. The other options were incorrect because:
- The grant should be issued in the true name of the executors- if this is not how their name appears in the will, the discrepancy can be explained
- The application should refer to all executors named in the will- and if any are not applying the reason for this should be explained
- Most probate applications can be made online
- It is the value of the deceased’s succession (not taxable) estate which appears on the grant
A testator died leaving a valid will appointing two executors. One of them will renounce. Inheritance tax has been paid. Which of the following most accurately states what needs to be submitted to the probate registry when making an application for the grant?
Certified copy of the will
Certified copy of the will and form of renunciation
Original will and form of renunciation
Original will, form of renunciation and IHT 400
Certified copy of the will and IHT 400
Original will and form of renunciation
Correct
Correct. When an executor renounces power they will completed a form of renunciation and this must be submitted along with the application for probate. The original not a copy will must also be provided. The other options were incorrect because: - The original will is needed - The IHT 400 is sent to HMRC not probate registry
incorrect
Original will, form of renunciation and IHT 400
Incorrect
Incorrect. The IHT 400 is sent to HMRC not to the probate registry.
A deceased died intestate. The deceased’s surviving spouse inherits the whole of the estate free of inheritance tax (this estate is excepted) and is applying for the grant of representation alone.
Which of the following most accurately states what needs to be submitted to the probate registry when making an application for the grant?
Certified copy of the will and IHT 400
Nothing
Original will and the probate registry fee
The probate registry fee
IHT 400
The probate registry fee
Correct. This is sent to the probate registry as part of the grant application. The other options were incorrect because there was no will (the deceased died intestate) and the IHT 400 is not relevant.
An executor takes out a grant of probate and then decides to appoint an attorney to assist with the administration.
Will the power of attorney be sent to the probate registry?
No
Correct
Correct. The executor has already taken out the grant in their own name. The probate registry would only be sent the power of attorney if the grant was being issued in the name of the attorney i.e. the executor was delegating their right to apply.
incorrect
yes
Incorrect
Incorrect. The executor has already taken out the grant in their own name. The probate registry would only be sent the power of attorney if the grant was being issued in the name of the attorney i.e. the executor was delegating their right to apply.
A woman died leaving a will appointing her brother as her executor. The woman’s will contained the following standard attestation clause:
“Signed by the above named [woman’s name] in our joint presence and then by us in hers”
The will was executed in accordance with s 9 Will Act 1837.
The woman was illiterate and unable to read her will so it was read out loud to her before she signed it.
Which of the following affidavits may be required to support the application for a grant of probate?
An affidavit of due execution confirming compliance with s 9 Wills Act 1837.
None – the will is invalid and cannot be submitted to the probate registry.
An affidavit of plight and condition.
None - no affidavit evidence is required on these facts.
An affidavit of due execution confirming knowledge and approval.
An affidavit of due execution confirming knowledge and approval.
Correct
Correct: On the facts the will was correctly executed. However, as the woman could not read her will there is no presumption that she knew and approved of its contents. This presumption could have been raised by a specially worded attestation clause – however, this was not done and an affidavit confirming the will was read out loud to her and that she understood it may be needed.
A woman died leaving a will appointing her spouse as her executor. The woman’s will contained the following standard attestation clause:
“Signed by the above named [woman’s name] in our joint presence and then by us in hers”
The date and two signatures appear as part of the attestation.
Which of the following affidavits may be required to support the application for a grant of probate?
None – the will is not valid so cannot be submitted to the probate registry
None - no affidavit evidence is required and the application can proceed as standard
An affidavit of plight and condition
An affidavit of due execution confirming knowledge and approval
An affidavit of due execution confirming compliance with s 9 Wills Act 1837
None – the will is not valid so cannot be submitted to the probate registry
Correct
Correct. The will has not been executed in accordance with the requirements of s 9 WA as there are only two signatures on it not three (a will must be signed by the testator and two witnesses). If a will is not valid it cannot be admitted to the probate registry.
Incorrect. The will has only been signed by two people. An affidavit cannot be submitted to suggest otherwise.
A client brings you a home-made will made by her mother. The client’s mother has recently died.
The client’s mother kept the fact that she made a will secret and the only people who knew about it were the two witnesses.
The will is well drafted and contains a standard attestation clause. You are confident that the will was signed in accordance with the execution requirements in s 9 Wills Act 1837. However, the will does not contain a date.
The client tells you that both witnesses to the will died before the client’s mother.
Which of the following is correct?
Affidavit of due execution may be required.
An affidavit as to alterations may be required.
An affidavit of due execution cannot be sworn.
No affidavit evidence is required and the probate application can proceed as standard.
An affidavit of plight and condition may be required.
An affidavit of due execution cannot be sworn.
Correct
Correct. An affidavit of due execution can be used to confirm the date of a will. However, it must be signed by someone who can swear under oath what this date in fact was. If the only people who knew about this will have pre-deceased there is no suitable deponent.
incorrect
Affidavit of due execution may be required.
Incorrect. Refer to your materials on affidavits and consider who would sign the affidavit.
A testator dies leaving a will. In his will he leaves his house (worth £600,000), which is subject to a mortgage (£50,000) to his brother, a legacy of £3,000 to his friend and the residue of his estate to his mother. The testator’s assets are worth £50,000 (excluding the house) and he had unsecured debts of £2,000.
The will effectively distributes the whole of T’s estate and is silent with regards the payment of debts.
Which of the following statements is correct?
The unsecured debts will be paid out of the £3,000 set aside for the legacy to T’s friend.
Only the unsecured debts will be repaid from the residue.
The mortgage and unsecured debts will be paid from the sale proceeds of the house.
The whole of the estate will bear the burden of the mortgage and unsecured debts and each beneficiary’s entitlement will abate proportionately.
The mortgage and unsecured debts will be repaid from residue.
Only the unsecured debts will be repaid from the residue.
Correct
Correct. T’s brother will inherit the house subject to the mortgage (the mortgage will not be repaid using other assets in the estate) – s.35 AEA 1925.
The unsecured debts will be paid in the statutory order prescribed in Sch 1 Part II AEA – the application of which directs the repayment of debts from the residue (as there is no undisposed of part of the estate). The other options were incorrect because:
- The legacy to T’s friend is unaffected
- The house is inherited subject to the mortgage charge and the mortgage debt is not repaid from other estate assets – the value of the house is sufficient to meet the whole of the secured loan
- The house is only subject to the secured debts
- The burden of debts is not shared proportionately between the whole of the estate
A woman dies leaving an estate worth £50,000. By her will the woman leaves £20,000 to her mother and the residue to her sister.
When she died the woman has secured debts of £10,000 and unsecured debts of £20,000.
Which one of the following is correct?
The woman’s estate is insolvent because there are insufficient funds to pay all of her debts and legacies.
The woman’s estate is solvent because there are sufficient funds to pay her unsecured debts and legacies. The secured debts do not need to be considered as these are tied to specific estate assets.
The woman’s estate is solvent because there are sufficient funds to pay her secured debts. It does not matter if the unsecured debts or legacies cannot be paid in full.
The woman’s estate is insolvent because after the debts and cash legacy are paid there is nothing left in the residue to pay to her sister.
The woman’s estate is solvent because there are sufficient funds to pay all of her debts. It does not matter if the legacies cannot be paid in full.
The woman’s estate is solvent because there are sufficient funds to pay all of her debts. It does not matter if the legacies cannot be paid in full.
Correct
Correct. An estate is solvent if all the debts, liabilities and expenses can be paid. It is irrelevant whether or not the legacies (pecuniary, residuary or otherwise) can be paid.
The other options were incorrect because to be a solvent estate all debts must be payable from the estate in full not just secured/unsecured debts.
incorrect
The woman’s estate is solvent because there are sufficient funds to pay her unsecured debts and legacies. The secured debts do not need to be considered as these are tied to specific estate assets.
Incorrect
Incorrect. Refer to your materials regarding the payment of the deceased’s debts and review the definition of a solvent estate. Although the burden of secured debts falls primarily to the charged assets, all debts must be payable from the estate assets to be solvent.
The executors of an estate have sought your advice. They need to sell an item from the residuary estate to raise a cash sum of £10,000 to repay a unsecured debt. They have identified the following residuary assets as potentially suitable:
- Painting (probate value £15,000, current value £30,000)
- Car (probate value £10,000, current value £10,000)
- Collection of jewellery (probate value £12,000, current value £12,000)
- Motorbike (probate value £4,000, current value £4,000)
One of the residuary beneficiaries has asked the executors whether they can have the car as part of their entitlement.
Which of the following would be the best advice?
It doesn’t matter which item they sell provided the executors fulfil their legal duty to the estate creditors.
The executors should sell the car.
The executors should sell the painting.
The executors should sell the jewellery.
The executors should sell the motorbike.
The executors should sell the jewellery.
Correct
Correct. This would be the best option. While the executors have a legal duty to repay the deceased’s debts, and provided they identify items in accordance with the statuary order, they are not legally obliged to sell one item in preference to another, there are practical considerations which they should take into account.
The other items would be less suitable because:
- the painting has increased significantly in value and may result in a capital gains tax charge
- a beneficiary has specifically asked for the car, and although the executors don’t have to agree with the request, in this case there is no reason not to because alternative assets can be sold
- the motorbike would not provide the cash sum that they need.
The deceased acquired an asset when it was worth £10,000. The asset increased in value during the deceased’s lifetime and was worth £40,000 when the deceased died. The PRs needed to sell the asset a few months after the deceased died and have just sold the item for £45,000.
What is the value of the gain made by the PRs?
None – the gain is treated as being made by the beneficiary who will inherit the asset.
£5,000
£35,000
£30,000
£45,000
£5,000
Correct
Correct. The PRs are treated as having made a gain equal to the difference in value between the date of death value (£40,000) and the sale proceeds (£45,000).
The other options were incorrect because:
- Gains accrued during the deceased’s lifetime were included
- Sale proceeds are not equivalent to the ‘gain’
- The PRs made the sale not the beneficiary – so the gain is attributed to the PRs
In the tax year of death a testator received rental income of £2,000 in respect of which income tax was due but had not been paid.
During the administration the estate received savings income of £50 as bank interest but no other income.
Which of the following is correct?
The PRs should complete a tax return for the deceased for the tax year of death (to include £2,000 rental income) but do not need to account to HMRC for the estate savings income.
The PRs should account to HMRC for tax due in respect of the estate savings income but do not need to worry about the deceased’s untaxed rental income as this does not need to be paid following death.
The PRs should complete a tax return for the deceased for the tax year of death (to include £2,000 rental income) and should also account to HMRC for tax due in respect of the estate savings income.
The PRs should complete a tax return for the deceased for the tax year of death (to include both £2,000 rental income and £50 savings income).
The PRs are not required to account to HMRC for either the deceased’s rental income or the estate savings income.
The PRs should complete a tax return for the deceased for the tax year of death (to include £2,000 rental income) but do not need to account to HMRC for the estate savings income.
Correct
Correct. The deceased’s PR must account to HMRC in respect of the deceased’s untaxed rental income for the tax year of death. They are not however required to account to HMRC for the estate savings income as this was bank interest of under the threshold of £100, and there is no other estate income.
incorrect
The PRs should complete a tax return for the deceased for the tax year of death (to include £2,000 rental income) and should also account to HMRC for tax due in respect of the estate savings income.
Incorrect
Incorrect. Refer to your notes on PR responsibilities for IT and CGT. There is no requirement to account to HMRC for the estate income if this comprises solely bank interest and is less than £100.
During the administration of an estate the PRs transfer a piano to the deceased’s mother and some shares to the deceased’s brother.
The probate value of the piano was £1,200 and the value at the date of transfer was £2,000. The deceased’s mother has just sold the piano for £1,800.
The probate value of the shares was £3,500 and their value at the date of transfer was £3,000. The deceased’s brother has just sold them for £2,500.
Which of the following is correct?
The PRs and both the deceased’s mother and brother have made a loss.
The PRs have made neither a gain nor a loss. The deceased’s mother and brother have made a loss.
The PRs have made a gain. The deceased’s mother and brother have made a loss.
The PRs and the deceased’s mother has made a gain. The deceased’s brother has made a loss.
The PRs have made neither a gain nor a loss. The deceased’s mother has made a gain and the deceased’s brother has made a loss.
The PRs have made neither a gain nor a loss. The deceased’s mother has made a gain and the deceased’s brother has made a loss.
Correct
Correct. Where assets are transferred to beneficiaries there is no disposal by the PRs, so they make neither a loss nor a gain. The values at the date of transfer are not relevant.
A beneficiary is deemed to acquire the asset at probate value so the deceased’s:
- mother acquired the piano with a value of £1,200
- brother acquired the shares with a value of £3,500.
When the assets were sold by the beneficiaries, the deceased’s:
- mother sold the piano for £1,800 and would have made a gain of £600
- brother sold the shares for £2,500 and would have made a loss of £1,000.
The PRs and the deceased’s mother has made a gain. The deceased’s brother has made a loss.
Incorrect
Incorrect. Refer to your notes on PR responsibilities for IT and CGT. Where assets are transferred to beneficiaries there is no disposal by the PRs, so the PRs do not make either a loss or a gain.
The PRs of an estate are ready to distribute assets to the residuary beneficiaries. The residue comprises cash (£2,000) and shares in a quoted company (£1,000). There are two residuary beneficiaries who are entitled to share equally in the residue.
Which of the following is correct?
The PRs should split the assets in half so that each beneficiary receives one of the two items.
The PRs must sell the shares and then distribute £1,500 in cash to each beneficiary.
The PRs may appropriate the cash and shares in whatever proportions they see fit, provided that both beneficiaries receive assets with a total value of £1,500.
The PRs must obtain the agreement of the beneficiaries about how the appropriate the assets.
The PRs must transfer £1,000 cash and £500 of shares to each beneficiary.
The PRs may appropriate the cash and shares in whatever proportions they see fit, provided that both beneficiaries receive assets with a total value of £1,500.
Correct
Correct. The PR may appropriate assets in or towards a beneficiary’s entitlement. Each beneficiary should receive half the value of the residue (£1,500), but neither is entitled to any particular asset. The other options were incorrect because the PRs:
- do not have to divide each asset in ½
- do not have to convert the residue into cash in order to distribute identical sums to the beneficiaries
- do not have to divide the number of items in the estate
- may give effect to a beneficiary’s wishes but are not obliged to do so.
An estate is valued at £50,000. The deceased’s will leaves a specific gift of an asset worth £10,000 to A, a general cash legacy of £38,000 to B, and the residue to C. The deceased’s debts total £4,000.
Which of the following is correct?
The creditors are paid in full. A, B and C share the remainder of the estate equally between them.
A receives the specific asset and the creditors are paid in full. B receives £36,000. C receives nothing.
A receives the specific asset and the creditors are paid in full. B and C share the remainder of the estate equally between them.
A receives the specific asset and B receives £38,000. C receives nothing. The creditors receive £2,000.
The estate is insolvent so the statutory order of payment will apply.
A receives the specific asset and the creditors are paid in full. B receives £36,000. C receives nothing.
Correct
Correct. The estate is solvent as there are sufficient assets to meet the debts. However, there are insufficient funds to pay the debts and all of the legacies. The beneficiaries receive their inheritance from the assets that remain after creditors are paid in full.
As between the beneficiaries the specific legacies are paid first, then the general legacies and to the extent anything remains this would go to the residuary beneficiary.
Here, the specific legacy will be paid in full and the beneficiary of the general legacy will receive what is left over (but will inherit less than the legacy amount). The residuary beneficiary receives nothing.
Your firm has been instructed by the PRs of an estate. One of the solicitors has just prepared a set of estate accounts.
Who should approve and sign these?
The PRs and residuary beneficiaries.
The residuary beneficiaries.
The solicitor who prepared them.
The PRs.
The PRs and all of the beneficiaries.
The PRs and residuary beneficiaries.
Correct
Correct. The estate accounts should be approved and signed by the PRs and residuary beneficiaries.
1 – Having obtained the grant of probate Desmond and Tara (the ‘Executors’) are keen to progress the administration of Robert’s estate. Tara has made arrangements to transfer Meadow View and the joint bank account into her sole name. The executors have already closed Robert’s sole current account (and did this without the grant as the figure was small) but the Executors now need advice regarding Robert’s savings account.
Which of the following sets out the most appropriate course of action the Executors should take?
[A] Send a sealed copy of the grant of probate to the bank, arrange for the account to be closed and ask for the money to be transferred to Price Prior’s client account.
[B] Send an official copy of Robert’s will to the bank, arrange for the account to be closed and ask for the money to be divided equally so half is paid to Tara’s personal account and the other half to Desmond’s personal account.
[C] Send an official copy of Robert’s will to the bank, arrange for the account to be closed and ask for the money to be transferred to Price Prior’s client account.
[D] Send a sealed copy of the grant of probate to the bank, arrange for the account to be closed and ask for £150,000 to be paid to Andrew, £10,000 to Crisis and the balance transferred to Tara’s personal account.
[E] Send Robert’s original will to the bank, arrange for the account to be closed and ask for the money to be transferred to Price Prior’s client account.
[A] Send a sealed copy of the grant of probate to the bank, arrange for the account to be closed and ask for the money to be transferred to Price Prior’s client account.
- the bank’s job is just to transfer the balance to PR and not make the payments to the beneficiaries
- in this scenario, Tara and Desmond have instructed Price Prior
Solution available for in class MCQs (one drive)
Correct [A]:
A sealed copy of the grant of probate (rather than the will) is used to confirm that the Executors have authority to act (B, C and E are incorrect).
The money in the bank account should be sent to Price Prior’s designated client account or a specific Executors account. It should not be paid into the personal account of either Tara or Desmond (Option B, D and E are incorrect); this would mix estate money with their personal money making it more difficult to keep track of funds, accurately account for bank interest and prepare estate accounts and risks a breach of duty. The money should not be paid by the bank to the beneficiaries at this point – these funds will be needed to pay creditors and meet the estate administration costs (options D and E are incorrect).
2 – The Executors discover the closing balance for Robert’s savings account is greater than the date of death balance because interest has accrued since Robert died. Total interest received is less than £100.
Which of the following most accurately describes the inheritance tax (‘IHT’) and income tax (‘IT’) liabilities?
[A] The bank interest is excluded from Robert’s IHT estate. The interest is income payable to the estate. No IT is payable because the Executors can use their Personal Allowance.
[B] The bank interest is included in Robert’s IHT estate. The Executors must notify HMRC about the increase in value but no IHT is payable because the taxable value of Robert’s estate remains below the nil rate band.
[C] The bank interest is included in Robert’s IHT estate. The Executors do not need to notify HMRC because the taxable value of Robert’s estate remains below the nil rate band.
[D] The bank interest is excluded from Robert’s IHT estate. The interest is income payable to the estate. No IT is payable because the only income is savings income and the amount is below the estate IT threshold.
[E] The bank interest is excluded from Robert’s IHT estate. The interest is income payable to the estate. The Executors are required to pay IT.
[D] The bank interest is excluded from Robert’s IHT estate. The interest is income payable to the estate. No IT is payable because the only income is savings income and the amount is below the estate IT threshold.
- he did not have this interest when he died so it should not have been included at all! no retrospective adjustment for IHT unless claiming a specific loss relief – so not subject to IHT
- subject to income tax (IT)
– income tax applies but the amount is so low that HMRC is not interested - D and E could in theory be correct
Solution available for in class MCQs (one drive)
Correct [D]:
It is the value of assets on the date of death which are relevant for IHT purposes and any interest accrued following Robert’s death cannot form part of his estate (so options B and C are incorrect).
Post death bank interest is income for the estate and would ordinarily be subject to income tax (an estate expense payable by the PRs from the estate funds). However, where the only income received is saving interest, and the amount is below the de-minimus threshold at which IT would be due (as it is here), no IT is payable (option E is incorrect). The Executors are not entitled to a Personal Allowance (option A is incorrect).
3 – The Executors are considering selling Robert’s paintings. Robert bought the paintings for £30,000. They were accurately valued at £40,000 on the date Robert died. Their current market value is £45,000. Tara has used all of her capital gains tax allowance this tax year.
Which of the following correctly describes the capital gains tax (‘CGT’) position for the Executors?
[A] They would make a £5,000 gain. The Executors’ tax free allowance would minimise any CGT liability.
[B] They would make a gain of £15,000. The Executors’ tax free allowance would minimise any CGT liability.
[C] They would make a gain of £10,000. The Executors’ tax free allowance would minimise any CGT liability.
[D] They would make a gain of £10,000. The Executors do not qualify for a tax free allowance. CGT would be payable.
[E] They would make a gain of £10,000. No CGT is payable because gains accrued during the deceased’s lifetime are not subject to CGT following their death.
[A] They would make a £5,000 gain. The Executors’ tax free allowance would minimise any CGT liability.
- you always want the value of the asset on the date of death!
- death is not a disposal so increase before death is irrelevant here!
capital gains tax starting point is date of death
Solution available for in class MCQs (one drive)
Correct [A]:
The Executors have a power of sale in respect of all of the estate assets. Gains accrued during the deceased’s lifetime (the increase in value from £30,000 to £40,000) are effectively cancelled out on a person’s death, and option E was correct in this respect only.
Therefore, only the post death gains (the increase from £40,000 to £45,000) are relevant - the figure for gains stated in all options except A were incorrect.
Whether or not the gain would give rise to any CGT liability depends on how much of the Executors’ annual exempt amount is available. Personal Representatives do qualify for a CGT tax free allowance (so option D was incorrect in this respect). If you thought they did not you may have confused this with the Income Tax rule where there is no personal allowance for PRs.
4 – The Executors will be personally liable if a creditor or beneficiary suffers loss as a result of their breach of fiduciary/ statutory duties. Having collected Robert’s assets, the Executors must pay his creditors and beneficiaries, but do not know whether they are required to make these payments in a particular order.
Which one of the following most accurately describes the Executors’ obligations?
[A] Robert’s estate is solvent - there are sufficient funds to pay his debts, administration expenses and legacies. The order in which these payments are made does not matter.
[B] Robert’s estate is solvent - there are sufficient funds to pay his debts and administration expenses. The order in which these payments are made does not matter.
[C] Robert’s estate is solvent - there are sufficient funds to pay his debts. The order in which these payments are made does not matter.
[D] Robert’s estate is solvent - there are sufficient funds to pay his debts, administration expenses and legacies. The Executors must make these payments in accordance with a statutory order.
[E] Robert’s estate is solvent - there are sufficient funds to pay his debts. The Executors must make these payments in accordance with a statutory order.
[B] Robert’s estate is solvent - there are sufficient funds to pay his debts and administration expenses. The order in which these payments are made does not matter.
solvent: expenses and liabilities
does not matter if you can pay legacies
where it is solvent there is no statutory order of priority since all the creditors are going to be paid!
if the estate was insolvent then there is legislation for which creditors have priority
Solution available for in class MCQs (one drive)
Correct [B]:
An estate is solvent for these purposes if there are sufficient funds to pay the creditors and meet the administration expenses. It is irrelevant whether or not all of the legacies can be paid (therefore options A, C and D were incorrect).
Where the estate is solvent, but there are insufficient funds to pay the legacies, special rules apply to determine how the legacies are met and in what order. This does not apply to Robert’s estate.
Where an estate is solvent the order in which unsecured debts are paid is not important, the statutory order of payment only applies where the estate is not solvent (therefore options D and E were incorrect).
5 – The Executors have paid the credit card and gas bills and want to make payments to beneficiaries. However, they are concerned about their liability if they distribute all of Robert’s estate and subsequently discover he had other creditors of whom they were unaware.
Which of the following most accurately sets out the steps the Executors should take now to protect themselves from a possible claim later by unknown creditors?
[A] Place a notice of their intention to distribute Robert’s estate in the Gazette in accordance with s.27 Trustee Act 1925. The Executors should delay distributing the estate until two months from the date of the notice.
[B] Place a notice of their intention to distribute Robert’s estate in the Gazette and a newspaper local to Robert’s address in accordance with s.27 Trustee Act 1925. The Executors must wait at least two months from Robert’s death before placing the notice.
[C] Place a notice of their intention to distribute Robert’s estate in the Gazette and a newspaper local to Robert’s address in accordance with s.27 Trustee Act 1925. The Executors must wait at least six months from Robert’s death before distributing the assets.
[D] Place a notice of their intention to distribute Robert’s estate in the Gazette in accordance with s.27 Trustee Act 1925. The Executors should wait at least two months from Robert’s death before placing the notice.
[E] Place a notice of their intention to distribute Robert’s estate in the Gazette and a newspaper local to Robert’s address in accordance with s.27 Trustee Act 1925. The executors should delay distributing the estate until two months from the date of the notice.
[E] Place a notice of their intention to distribute Robert’s estate in the Gazette and a newspaper local to Robert’s address in accordance with s.27 Trustee Act 1925. The executors should delay distributing the estate until two months from the date of the notice.
Solution available for in class MCQs (one drive)
Correct [E]:
To comply with the requirements of s.27 Trustee Act 1925 (and thus be protected by claims from unknown creditors) the Executors must place a notice of their intention to distribute the estate in the Gazette and a local paper, giving creditors 2 months from the date of the notice to get in touch. Once this deadline has passed the Executors would be protected by claims from unknown creditors and may make distributions.
A: is incomplete - an advert is also needed in a local paper.
B and D: there is no deadline for when the notice should be placed.
C: the deadline is incorrect. You may have been thinking about claims under the IPFDA 1975.
-s27 notice procedure: simply the way of notifying the general public that you are about to distribute somebody’s estate
and time limit is lined to notice (and not date of death) and it is 2 months!
local newspaper only relevant for land and business in the area
6 – The Executors followed the correct procedure for placing the s.27 notice and are now ready to pay beneficiaries. They decided not to sell the paintings and Crisis have asked the Executors for a painting (valued at £8,000).
Which one of the following is an accurate summary of the Executors’ powers?
[A] The Executors must pay Crisis £10,000 because this is what was stated in Robert’s will.
[B] The Executors must give Crisis the painting instead of a cash lump sum because Crisis have made a formal request and the paintings have not been specifically given to anyone else.
[C] The Executors only have the power to give Crisis a painting instead of a cash sum if they choose a painting with a value of £10,000.
[D] The Executors have the power to give Crisis the painting provided that in addition they also transfer £2,000.
[E] The Executors cannot give the painting to Crisis because Tara, as Robert’s spouse, is entitled to his personal chattels.
[D] The Executors have the power to give Crisis the painting provided that in addition they also transfer £2,000.
Solution available for in class MCQs (one drive)
they can but they don’t have to
and if they do they have to give the balance
PR cannot underpay
power of appropriation
- ability to decide which assets satisfy the legacy
need consent of beneficiary (here crisis)
need to make sure it is a balancing payment
and calculate balancing payment properly FROM THE DATE OF APPROPRIATION
valuation = date of appropriation (NOT THE DATE OF DEATH)
Correct [D]:
The Executors have the power under s.41 Administration of Estates Act 1925 to transfer assets in satisfaction of the charity’s cash entitlement under the will. Therefore, Option A is incorrect.
There is no obligation to exercise this power, although most PRs will comply with a reasonable request. Therefore, Option B is incorrect.
If a beneficiary requests assets in or towards the satisfaction of a cash legacy the Executors must ensure that the beneficiary receives their full entitlement. As the painting is worth £8,000 an additional £2,000 must be paid to Crisis so that they receive the full value of their inheritance. Option D is correct as the asset does not have to be exactly the same value as the cash legacy.
Option E is incorrect. Tara is not entitled to the personal chattels. You may have been confused with the spouse’s entitlement under the intestacy rules, which do not apply in this case.
A man died last month leaving a valid will appointing his spouse and brother as executors and giving the whole of his estate to his minor children.
The man’s gross taxable estate was valued at £800,000 and did not include any residential property.
The man’s spouse died two years ago. The man’s brother does has not taken any action so far in the administration of the estate and intends to renounce probate.
Assuming a paper application is required, which of the following most accurately states the items that will comprise the application for the grant of representation?
PA1P.
PA1P and a form of renunciation.
PA1P, IHT 421 and a form of renunciation.
PA1A, IHT 421. Provided the brother has not intermeddled no form of renunciation is required.
PA1A, IHT 400 and a form of renunciation.
PA1P and a form of renunciation.
Correct
Correct. The man left a valid will so form PA1P is required, even though the named executors (his spouse and brother) will not be making the application.
Inheritance tax will be payable following the man’s death. The value of his taxable estate is above the NRB and will pass to non-exempt beneficiaries. The man does not have any residential property so the RNRB will not apply. We do not know whether the TNRB may be claimed or not, but even if it did, the value of his estate is greater than 2 x NRB. As such the IHT 400 would be completed and sent to HMRC (not the Probate Registry). HMRC (not the executors) forward an IHT421 to the probate registry.
Renunciation is only possible if the executor has not intermeddled; the man’s brother has not intermeddled and renunciation is possible. A form of renunciation is always required where an executor is renouncing their role.
incorrect
PA1A, IHT 400 and a form of renunciation.
Incorrect
Incorrect. Review the materials which explain when a PA1P / PA1A would be used. Ensure you can determine what IHT form is required for an estate and which documents are included in an application for probate of both excepted and non-excepted estates. The IHT 400 is not sent to the Probate Registry.
PA1P, IHT 421 and a form of renunciation.
Incorrect
Incorrect. Ensure you can determine what IHT form is required for an estate and which documents are included in an application for probate of both excepted and non-excepted estates. The IHT 421 is not sent by the executors to the probate registry.
A woman dies leaving a valid will that appoints her spouse as executor and gives all of her assets to him.
The woman’s spouse takes out the grant of probate but he dies before completing the administration of the woman’s estate. He leaves a will appointing their adult son as his executor and the only beneficiary of his will.
Their son has just obtained the grant of probate for his father’s estate.
Which of the following is correct regarding who is able to administer the woman’s estate?
The son is able to complete the administration of his mother’s estate under the authority conferred by the grant of probate of his father’s estate.
The son is able to complete the administration of his mother’s estate because he is the sole beneficiary of his father’s estate.
The son is not able to complete the administration of his mother’s estate without making a further application to the probate registry.
The son is not able to complete the administration of his mother’s estate because he is not named as her executor.
The son is able to complete the administration of his mother’s estate because he is the ultimate beneficiary of her estate.
The son is able to complete the administration of his mother’s estate under the authority conferred by the grant of probate of his father’s estate.
Correct
Correct. The chain of representation under s.7 Administration of Estates Act 1925 applies. As the woman’s spouse had taken out the grant of probate of her estate before he died, and their son had taken out the grant of probate of his father’s estate, the chain of representation is complete. The son can complete the administration of both estates under authority conferred by the grant in his father’s estate. No further application is required.
A woman left a valid will which appoints her civil partner as her executor and gives the whole of the woman’s estate to her adult sister.
The woman was survived by her mother, sister and adult son. The woman’s civil partner died before the woman.
Which of the following correctly states who would apply for the grant of representation of the woman’s estate?
The woman’s mother
The woman’s sister and mother (two administrators are required)
The personal representative of the woman’s civil partner (under the chain of representation)
The woman’s son
The woman’s sister
The woman’s sister
Correct
Correct. The woman left a will which does not validly appoint any executors. Therefore NCPR 20 applies.
Under NCPR 20 the person with the greatest entitlement to apply is the beneficiary of the woman’s residuary estate, here her sister.
The other options were incorrect because neither the mother nor son are beneficiaries and do not rank in priority above the sister. Only one PR is required (there are no life or minor interests) and the chain of representation does not apply.
A woman died leaving a valid will which shares her estate equally between her adult children. The woman’s sister has been appointed as executor of the woman’s estate.
One of the woman’s three children cannot be located and has been missing since going travelling two years ago. Despite carrying out extensive searches no one can find the missing beneficiary.
The woman’s sister wants to complete the administration of the woman’s estate and distribute the assets between the two other children. However, she is concerned about her personal liability should the missing child return later and claim their 1/3 share.
Which one of the following would not adequately protect the woman’s sister?
Distributing the estate to the two other children and obtaining insurance to protect against a subsequent claim by the missing beneficiary.
Making a payment into court of the missing beneficiary’s 1/3 share.
Placing a notice in accordance with s.27 Trustee Act 1925.
Obtaining a Benjamin Order.
Retaining the missing beneficiary’s 1/3 share and delaying the administration of the woman’s estate.
Placing a notice in accordance with s.27 Trustee Act 1925.
Correct
Correct. All of the other options are feasible where there is a known but missing beneficiary. The protection afforded by a s.27 Trustee Act 1925 notice is in relation to unknown creditors and beneficiaries, not those who are known about but cannot be located.
An unmarried man died recently. The only lifetime transfer he made was an LCT (value £550,000) four and a half years before he died. IHT of £43,800 was paid on the LCT at the time of the transfer.
Calculate the IHT due on the LCT at the date of the man’s death.
£87,600
£10,200
£43,800
£8,760
£52,560
£8,760
Correct
Correct: The man had a cumulative total of £0 (Step A) and was able to use his AE from the year of the LCT and the previous year to reduce the chargeable value to £544,000 (Step C). The NRB is deducted from the chargeable value, leaving £219,000 to be taxed at the death rate of 40% (Step D). As the LCT was 4 years before death, taper relief is applied at 40% (Step E) and then credit is given for the IHT paid during his lifetime (Step F). The other answers were wrong because they failed to apply one or more of the AE at Step C, taper relief at Step E or credit for the lifetime tax at Step F.
A woman settles £650,000 on trust for her nieces and nephews (an LCT). She has made no previous lifetime transfers.
Calculate the IHT due on the LCT at the time it is made.
£63,800
£65,000
£130,000
£127,000
£64,400
£63,800
Correct: The woman has a cumulative total of £0 (Step A) and is able to use her AE from the year of the LCT and the previous year to reduce the value of the LCT to £644,000 (Step C). The NRB is deducted from the chargeable value, leaving £319,000 to be taxed at the lifetime rate of 20% Step D). The other answers were wrong because they missed one or both lots of AE and/or applied IHT at the death rate of 40%.
