Will drafting Flashcards
Non dispositive clauses?
Commencement clauses
I tom JONES declare this to be my last will and testament.
- Identify name and occupation
- If testator is known by a different name
Revocation clause
- I hereby revoke all former wills and testamentary dispositions
- Ensures only one will is valid.
- Should be included as a matter of good drafting.
Burial and funeral wishes
- Many testators want to direct what happens to their body.
Appointment of executors
- Role of PR is to collect deceased’s assets and administer estate.
- Must pay deceased’s debts and admin costs and expenses.
- Executor is appointed by will.
- Administrator – non contentious probate rules determine who acts as PR
- Minimum of 1 executor better to have 2
- Common for surviving spouse or close family to be names.
- Scope of executor’s appointments is absolute and unrestricted, but qualified appointments are possible may be qualified by time, location, or type of assets. – if qualified grant of representation will be similarly limited.
- If trust occurs – common for executors to both be executors and trustees.
Appointments?
Appointment of law firm partnership
- No separate legal identity so all partners appointed.
- Number of partners can be limited so only named few.
Appointment of LLP
- Have legal capacity to apply for a grant of representation and may be appointed as an executor.
Appointment of guardians
- I appoint …. To be guardians of any of my children not age 18
Administrative clauses?
- Executors’ primary duty is to administer estate
- A trustee is responsible for management of any trust that continue following the estate administration
- Administrative powers – executors are responsible for assets within an estate and trustees are responsible for assets held in trust. Must be given power to carry out role. From either statute or common law or by powers in will
- If no express administrative powers, then only statutory or common law apply.
- Express powers usually reflect needs of client.
- When a trust is created by will – the trust deed if the will.
- Trust deed usually refers to document creating a lifetime trust.
- STEP is the society of trusts and estate practitioners promote best practice
Attestation clause - Usually, state will be executed in presence of two or more witnesses and confirms requirements for due execution.
Dispositive clauses?
By these clauses a testator directs who is to inherit their assets and what each person should receive and on what terms.
Words legacy and device are used of describe gifts of property. legacy is for chattels and devise is for land.
Typically, in:
- Non-monetary
- Gifts of cash
- Gifts of everything else
Specific gifts?
- Particular item owned by deceased at date of death. Needs to be drafted precisely.
- If item is not owned at death, then the gift adeems – fails to take effect
- A testator will commonly replace items such as cars and musical instruments, check testators’ intention if original one does not exist.
- Alternative item can be included.
Collections - Any collection should be clearly identified.
Chattels - A gift of a collection of chattels is a specific gift.
- Most testators will have chattels. Statutory definition of chattels s55 AEA – all tangible moveable property except for money or securities for money and assets used mainly for business purposes and held as investments
- Usually given away after specific gifts to avoid conflicts.
Specific gifts of land?
- Property owned as joint tenants passes outside of succession estate and is not distributed under terms of deceased’s will.
- As tenants in common Is in succession estate
- If testator wants to give away their interest in a property to a particular beneficiary, then the usual considerations for specific gifts should be considered. And check:
o Whether any 3rd party interests
o Should be given tax rate advice regarding RSNR
o If property is subject to charge the testator will need advice on repayment
o If testator does not want to make an outright gift and instead plans to leave it on trust, then who will have right to occupy?
General legacies?
General legacies
- A general is an a and not distinguished.
- Don’t normally fail
- Most pecuniary legacies are general in nature.
Demonstrative gifts
- Type of general legacy – which the will directs should be paid from specific fund. Will not fail if not enough in the fund, receive what’s left and receive rest from estate,
- Unusual to see this in practice
Pecuniary gifts
- Gifts if money
Residuary gifts?
Residuary gifts –
- The remains that have not already been disposed of under the will.
- May be given directly to beneficiaries or through a trust
- Trust should generally be imposed if
- A beneficiary is given a life interest in residue
- A discretionary trust of residue is to be set up
- The residue is given to more than 1 person
- There are contingent or minor interests.
Construction?
Property
- Will speaks form date of testator’s death s24
- The use of the word MY is construed to be a contrary intention to the general rule in s24. Likely to fail and beneficiary receives nothing is no express substitutional gift.
Collections
- If it’s a collection which is capable of growing it will speak from date of death.
- So, if used ‘my’ then its items included at date of death.
People
- The person is deemed to speak from date of execution. Rule in s24 does not apply.
- Where it’s given to a class of beneficiaries a testator should state expressly when the beneficiaries will be determined. Without express wording, the class closing rules apply when the first beneficiary obtains a vested interest,
Relieving provisions?
- Deal with who should bear burden of taxes and charges and expenses and costs
- Inheritance tax – in absence of any express provisions an individual gift in a will is made free of IHT and IHT would be payable out of the residue of general testamentary expenses.
- Testator can make a gift the subject of IHT
Expense cost of transfer - Cost of delivery and expenses incurred since date of death in upkeep the beneficiary bear’s burden. Can be maid free of expenses and then paid out of residuary.
Charge?
- When a property is subject to a secured debt – representatives will need to consider whether repayment of debt linked with the charge if a cost of the estate.
- General rule – is asset charged bears the burden for payment.
- Beneficiary will therefore inherit the property subject to the charge.
- A testator can expressly relieve the property of the charge – it then becomes a general debt of estate to be paid out of residue.
S21 AJA?
- Where a clause is unclear of ambiguous its possible for courts to rule on how it should be construed
- Determine effect of a will and the overriding principle regarding construction is intention of the testator.
- Court’s role is to determining meaning of words within will and what testator intended by these not look behind to find real intention.
- Extrinsic evidence may sometimes be allowed. (not included in the will)
Survivorship provisions?
- If beneficiary pre-deceases the gift will lapse.
- If two deaths occur in circumstances where exact order of death is uncertain then commerioted rules applies - where eldest is perceived to die first.
- If two deaths occur in short time, first to die loses control over ultimate destination of their property as all of the assets will pass under the second persons will or intestacy. Maybe increased IHT if same assets are taxed in both estates.
- If order of death is unknown s5 IHTA treats death as simultaneous, and each estate is taxed separately.
- To avoid this problem can have a survivorship clause must survive by a period of time.
Gifts to particular beneficiaries?
Gifts to individual person drafting will
- Presumption of knowledge will not be given.
Gifts to issue
- Includes illegitimate and legislate and adopted children. But not a step child unless the interpretation is clear.
- If it’s ‘I give absolutely to each of my children’ may want to include children born after will is executed. – appropriate to draft gifts to children as a class.
Class gifts
- When given to a group of beneficiaries referred to as class gifts.
- Each member is entitled to inherit.
- Class closing rules- when any one member becomes entitled in possession it closes.
- Vested interests = a gift vests if given outright and absolutely and there are no conditions which must be met. But if a minor then has to wait till 18 or if give good receipt. DOESN’T MATTER AGE STILL A VESTED INTEREST IF THEY WERE TO DIE WILL PASS PART OF THEIR ESTATE.
- Contingent interest – where a beneficiary has to satisfy a condition before they inherit. Like turning 21. If don’t meet condition gift fails.
Pre-decease the testator?
- if a beneficiary dies before testator a gift in wills lapses.
- If pecuniary legacy lapses – the money ends up in residuary estate
- However, is a gift of residuary estate lapses then a full or partial intestacy is created.
- Best to include substation clause to prevent intestacy.
S33 WA?
Substation in favour of the grandchildren clause
- Section 33 WA act 1837
- In the case of a gift to testators’ own issue if there is no express substitution clause s33 WA may apply to prevent the gift lapsing where
- A will contains a devise or bequest to a child or remoter descendant
- And the intended beneficiary dies before the testator leaving issue and
- The issue of the intended beneficiary is living at testators’ death
- Then unless a contrary intention appears the divide or bequest shall take effect as one to the issue living at testators’ death
Good practice to have a substitution clause for clarity.
If testator does not want s33 to apply needs to expressly state it.
Charities and unincorporates associations
- Organisation should exist and a full name and address and registered number should be included
- IHT implications
Incorporating documents into a will?
Provisions of a will should normally be containing in one properly executed document.
If changes or additional are made to the will – should be done by codicil or by revocation of original will and execution of new will.
Sometimes unexpected documents can be incorporated in successfully
Incorporating unexpected documents?
Can be incorporated by referring to it in the will.
Criteria must be satisfied
- Document must exist when will is executed
- Must refer to document as being in existence at time of execution
- Document must be clearly identified in will
If validly incorporated it will become part of will even though it itself doesn’t comply with s9 wills act.
Will be made public along with will once be admitted to probate.
- Should still be avoided wherever possible for fear of not meeting criteria
Incorporating step provisions and letter of wishes?
- STEP is a professional association – which promotes best practice on matters like will drafting
- STEP have produced a nationally recognised administrative powers for personal representatives and trustees.
- Commonly incorporated into will
- STEP provision can be incorporated into will or trust deed by reference.
Letter of wishes
- Letters are common practice
- Not legally binding – merely guidance
- Do not form part of will
