will weeks 4 additional Flashcards

1
Q

Gross value of the estate

A

The total value of the estate for IHT purposes, plus any specified transfers and specified exempt transfers made in the seven years before death (like lifetime gifts).

This figure given to PR because they are ones administering estate and they will pay debts and other costs

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2
Q

Net value of the estate

A

The gross value, minus allowable debts (e.g., funeral expenses, outstanding bills).

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3
Q

Net qualifying value:

A

he net value of the estate minus any exemptions for assets left to a spouse, civil partner, or charity (since these transfers are exempt from IHT).

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4
Q

Category 1 – Small Excepted Estates

A

Definition: Estates where the gross value is below the NRB threshold (£325,000) including specified transfers.

Conditions:
The deceased was domiciled in the UK. The gross value of the estate (before debts/exemptions) + any transfers in the last 7 years does not exceed £325,000.
No chargeable transfers exceeding £250,000 were made in the 7 years before death.
No more than £100,000 of the estate is situated outside the UK.
Settled property cannot exceed £250,000.

Procedure:
PRs do not submit IHT400.
Provide basic details (name, date of death, and declaration confirming it’s an excepted estate).

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5
Q

Category 2 – Exempt Excepted Estates

A

Definition: Estates where the majority of the estate is exempt due to the spouse or charity exemptions.
Conditions:
The gross value of the estate (including specified transfers in the last 7 years) must not exceed £3 million.
Trust property in the estate must not exceed £250,000 (chargeable) or £1 million (including exempt).
No chargeable transfers exceeding £250,000 were made in the last 7 years.
Net chargeable estate after deducting spouse/charity exemptions + liabilities must be under the NRB (£325,000).
Can claim transferable NRB from a pre-deceased spouse.
Procedure:
PRs do not submit IHT400.
Provide only basic details (name, date of death, declaration confirming exempt status)

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6
Q

Category 3 – Non-Domiciled Excepted Estates

A

Definition: Estates where the deceased was non-domiciled in the UK and owned only limited assets in the UK.
Conditions:
The deceased was never domiciled or treated as domiciled in the UK.
The gross value of the UK-based estate (including specified transfers) must not exceed the NRB threshold of £325,000.
No chargeable transfers exceeding £250,000 were made in the last 7 years.
UK-based assets only.
Procedure:
PRs provide only basic information on the probate application (name, date of death, declaration confirming it is an excepted estate).
No detailed IHT form unless selected for review by HMRC within 60 days.

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7
Q

ey Terms – Specified Transfers & Exempt Transfers

A

Specified Transfers: Transfers (cash, personal chattels, quoted shares, UK land) made in the 7 years before death that count towards the estate value.
Exempt Transfers: Transfers made to a spouse, charity, political party, etc., during the 7 years before death that do not count for IHT.

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8
Q

What is Nil Rate Band (NRB) and Transferable NRB

A

NRB: The amount up to which an estate is not liable to IHT. Currently set at £325,000.
Transferable NRB: If a spouse or civil partner died without using their NRB, the unused portion can be transferred to the surviving spouse’s estate, increasing their NRB. (look at it from % pop)

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9
Q

When is an IHT400 Form Required?

A

n IHT400 form is required if:
The estate exceeds the NRB threshold.
There are significant lifetime gifts exceeding £250,000.
The estate does not meet the conditions for being an excepted estate.
The estate includes complex assets like unquoted shares or significant non-UK assets.

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10
Q

What Happens if the Estate is Selected for Review? (for excepted estate number 3)

A

selected for review, HMRC may request:
Detailed information about the estate (assets, liabilities, and transfers).
Supporting documents like valuations or legal paperwork.
HMRC typically has 60 days after the probate application to request this information.

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11
Q
A
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12
Q

net probate value vs net chargeable estate for IHT

A

Not probate value: what PRs will beneficially MINUS any debts or expenses (gross value of estate- debts/expenses)

Net chargeable estate for IHT: net qualifying value estate for IHT so you put everything which charges IHT MINUS expenses & exceptions

LOOK AT WILLS WK4 the document

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13
Q

Do PA1P & PA1A need statement of truth?

A

YES- applicants for grant of probate// letter of administration are confirming they will administer estate in accordance to law and content of submitted form is truthful.

Criminal proceeding for fraud and

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14
Q

What information is included in the signature section after the statement of truth?

A

Each applicant must sign, insert their name, and add the date.

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15
Q

Who can sign the PA1P/PA1A if the applicant has legal representation?

A

The legal representative can sign on behalf of the applicant, but the grant will still be issued in the applicant’s name.

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16
Q

What happens if an applicant’s legal representative signs the form on their behalf?

A

The legal representative signs, but the grant will still be issued under the name of the applicant listed in the form.

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17
Q

if X is married to testator and then gets divorce what happens? assuming before testator death

A

Any gifts to X from the will fail and their appointment as executor ceases.

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18
Q

if x is sole executor and the previous situations occurs what happens?

A

the grant would be a grant of letters of administration with the
will annexed

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19
Q

Can a person appointed as executor who lacks decision-making capacity at the testator’s death apply for the grant?

A

No, they cannot apply for the grant. The other executors will take the grant.

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20
Q

What happens if the only executor lacks capacity?

A

Their attorney, appointed under an enduring or lasting power of attorney, can take the grant in their place.

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21
Q

What happens when one of several executors is a minor?

A

Probate can be granted to the adult executor(s), with “power reserved” to the minor to take a grant later when they are of age.

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22
Q

What happens if the minor attains 18 years before the estate is fully administered?

A

An application for a grant of double probate can be made, allowing the former minor to act as executor alongside the adult executor(s).

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23
Q

Who takes the grant when the minor is the only executor appointed by the will?

A

A grant of letters of administration with will annexed is made to the minor’s parent(s) or guardian(s) until the minor reaches 18 years.

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24
Q

What can the minor executor do once they turn 18 if the estate is still not fully administered?

A

The minor executor can apply for a cessate grant of probate to act as executor and complete the administration of the estate.

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25
Q

when there’s two executors and one in adult while the other is a minor what happens?

A

Adult will take the grant alone with power reserved to minor.

side:One executor can act even where there is an infant beneficiary.

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26
Q

When can executors renounce their role?

A

Executors can renounce only if they have not intermeddled in the estate (e.g., by selling the deceased’s chattels). i.e doing tasks a PR might do

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27
Q

What happens if an executor intermeddles in the estate?

A

The executor is considered to have accepted their appointment and must take the grant.

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28
Q

How must an executor formally renounce their role?

A

A: By completing and signing Form PA15 (witnessed) and filing it with HMCTS.

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29
Q

Do executors who are also trustees remain trustees after renouncing executorship?

A

Yes, they remain trustees unless they also disclaim the trusteeship.

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30
Q

What does “power reserved” mean in probate?

A

it allows an executor to delay acting without renouncing, reserving the right to take out a grant if needed later.

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31
Q

How many executors can be granted probate for the same property?

A

A: A maximum of four executors can be granted probate for the same property.

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32
Q

In what situation would “power reserved” apply to an executor? A

A

: If an executor, like Bella working abroad, does not want to act initially but wants the option to help later, “power reserved” can be applied.

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33
Q

Can a grant of probate be limited to a specific part of the estate?

A

A: Yes, a grant can be limited, for example, to literary executors for an author’s writings, while general executors handle the rest.

34
Q

How does an executor confirm that “power reserved” applies to another executor in their grant application?

A

A: The executor applying for the grant, like X, confirms in the PA1P form that they have notified the other executor, such as Y.

35
Q

When does a grant of letters of administration with will annexed apply?

A

A: It applies in the following scenarios:

The will does not appoint any executors.
All executors named in the will have predeceased or renounced.
The sole executor appointed in the will is unable to act, such as when the executor is the deceased’s spouse, but they divorced before the testator’s death.
There is a valid will, but no executor is able or willing to act.

36
Q

Beneficiary with Vested Interest Preferred:

Q: What happens if there are multiple beneficiaries of equal rank but one has a vested and another has a contingent interest?

A

A: The court generally prefers the beneficiary with the vested interest.

Example: Kalima’s will leaves her estate to Laila (30 years old, vested interest) and Masoud (23 years old, contingent interest). If they apply separately, the court will prefer Laila’s application.

37
Q

Q: Can minors (infants) act as administrators or apply for a grant?

A

A: No, minors cannot act as administrators or apply for a grant. Others in the same category or the minor’s parent(s)/guardian(s) will apply on their behalf for the minor’s use and benefit until they turn 18.

38
Q

Number of Administrators (When Required):

Q: When does the court require at least two administrators to apply for the grant?

A

A: Two administrators are required if there is:

A life interest involved.
Property passes to a minor, whether vested or contingent.

39
Q

Q: What is an example where two administrators are needed due to a life interest?

A

: Example: Quentin leaves his estate to Rose (his wife) for life, remainder to his son, Sam. Two administrators are required because of Rose’s life interest—both Rose and Sam should apply.

40
Q

Q: What is an example where two administrators are needed due to a minor beneficiary?

A

: Example: Tahir’s will leaves part of his estate to Zafir (15 years old). Two administrators are needed because Zafir is a minor. Varisha (21) and Wahid (19), his siblings, should both apply.

41
Q

Application Without Notice to Others:

Q: Can one person apply for a grant without notifying others of the same degree?

A

A: Yes, if multiple people are entitled to act as administrators in the same degree, any one can apply without notice to the others.
Example: Jenny leaves her estate to her brothers Ken and Larry. Larry does not wish to act, so Ken can apply alone, without affecting Larry’s entitlement to the estate.

42
Q

Administrator Limit and Power Reserved:

Q: How many administrators can be appointed for the same property?

A

A: A maximum of four administrators can be appointed for the same property (Senior Courts Act 1981, s 114).

43
Q

Q: Can an administrator have power reserved to prove at a later stage?

A

: No, unlike executors, administrators cannot have power reserved to apply later.

44
Q

Renunciation by Administrators:

Q: Can a person entitled to apply for letters of administration with will annexed renounce their right?

A

: Yes, they can renounce using Form PA16, just like an executor.

45
Q

Does an administrator lose the right to renounce if they intermeddle in the estate?

A

A: No, unlike an executor, an administrator does not lose the right to renounce by intermeddling

46
Q

Effects of Renunciation:

Does renouncing affect the administrator’s beneficial entitlement or appointment as a trustee?

A

A: No, renunciation does not affect either their beneficial entitlement as a beneficiary or their appointment as a trustee.

47
Q

simple letters of administration when the deceased died intestate.
List the priority classes for beneficiaries entitled to a grant under intestacy rules.

A

A:

Surviving spouse or civil partner
Children and issue of deceased children
Parents
Full siblings and their issue
Half siblings and their issue
Grandparents
Full uncles and aunts and their issue
Half uncles and aunts and their issue.

48
Q

Q: What happens if no beneficiaries are available to claim the estate?

A

: The Treasury Solicitor may claim a grant bona vacantia on behalf of the Crown.

49
Q

Q: Who can apply for a grant if all entitled persons have been cleared off?

A

A: A creditor of the deceased or any person who may have a beneficial interest if the estate increases (accretion).

50
Q

Q: What must applicants establish in Form PA1A (simple letters of administration when the deceased died intestate.)?

A

A: They must clear off higher categories of entitlement and state their relationship to the deceased.

51
Q

: Are step-children entitled to property on intestacy?

A

no

52
Q

see example:

A

John dies intestate leaving personal chattels and other assets worth £400,000. He is survived by his wife, Kala, and children, Laksha (20) and Madesh (16).
Kala and Laksha must take the grant. Two administrators are needed because the intestacy creates a minority interest. Madesh cannot be an administrator because he is a minor.

53
Q

What documents should be sent to HMCTS when applying for a grant?

A

Completed Form PA1P or PA1A (or an online application) explaining the right to take a grant.
Any will and codicils.
Additional evidence of validity of any will (if necessary).
Probate fee.
Any renunciations of the right to act.

54
Q

What is a caveat?

A

A: A caveat is a formal notice lodged at HMCTS to prevent the issue of a grant due to a dispute over a will or the validity of the executor. For example, if Ann believes Eric, the named executor, lacks the capacity to act, she should enter a caveat.

55
Q

What happens once a caveat is entered?
A

A

No grant can be issued until the caveat is removed or ceases to be effective. Caveat lasts for six months

56
Q

Who can enter a caveat?

A

: A person with just cause, like a beneficiary questioning the executor’s capability or the validity of a will. For instance, Fahima can enter a caveat if she believes Dinar’s homemade will naming Eisaz as executor is invalid.

57
Q

What is a citation to take probate?

A

t is issued when an executor has intermeddled in the estate but hasn’t applied for a grant, compelling them to act. For example, if an executor sells the deceased’s chattels but hasn’t applied for probate, they can be cited.

58
Q

What is a citation to propound a will?

A

It is used to authenticate a will when someone believes a newer will may reduce their inheritance. The person can cite the executors of the later will to propound it.

59
Q

What is a citation to accept or refuse a grant?

A

It clears off a person with a prior right to the grant who has not applied. For instance, if Bert, the executor, does nothing, Clare can cite him to act, and if he does nothing, she may apply for a grant with the will annexed.

60
Q

What is meant by “passing over” an executor, and when should it be applied?

A

Passing over” an executor involves applying to the Court under section 116 of the Senior Courts Act 1981 to replace an unwilling executor with another person. For example, in Re Biggs [1966], an executor who intermeddled with the estate refused to act, leading the applicants to obtain an order to pass him over.

61
Q

Do beneficiaries of an unadministered estate have an equitable interest in the deceased’s property?

A

No, beneficiaries do not have an equitable interest until the personal representatives (PRs) transfer or assent the property to them.

62
Q

What right do beneficiaries of an unadministered estate have?

A

They have the right to compel due administration of the estate, including access to accounts and information about the administration.

63
Q

What must PRs keep throughout the administration of an estate?

A

PRs must keep accurate records of receipts and payments.

64
Q

What can beneficiaries do if PRs refuse to provide accounts?

A

Beneficiaries can apply to the court for an order compelling the PRs to provide an inventory and accounts (s 25 Administration of Estates Act 1925).

65
Q

What happens at the end of the administration before final distribution?

A

PRs prepare estate accounts showing all assets, income, and payments, which are sent to the residuary beneficiaries for approval.

66
Q

re beneficiaries entitled to reasons for PRs’ decisions?

A

No, there is no automatic entitlement to disclosure of PRs’ reasons for decisions, but beneficiaries can apply to the court if disclosure is refused.

67
Q

Who can bring administration proceedings?

A

Anyone interested in the estate, including beneficiaries, creditors, and PRs, can bring administration proceedings.

68
Q

What are the two types of administration proceedings?

A

1) Applications limited to a particular issue (non-contentious);
2) Applications for a general administration order, where the court supervises the PRs.

69
Q

What is the “executor’s year”?

A

The executor’s year refers to the one-year period following a death during which PRs are not obligated to distribute the estate (s 44 Administration of Estates Act 1925).

applies to both executors and administrators, even though it’s a misnomer.

70
Q

Can beneficiaries sue PRs directly for breach of duty?

A

Yes, beneficiaries can sue PRs for breach of fiduciary duty or maladministration instead of bringing administration proceedings.

To NOT breach duty PRs must void conflicts of interest and account for unauthorized profits. Any profit made from estate property without authorization is considered a breach.

Example of breach: If PRs receive a commission from a stockbroker for selling estate shares without the will’s authorization or beneficiaries’ consent, they must return that commission to the estate.

71
Q

What is “devastavit”?
A

A

Devastavit” means a wasting of assets. Beneficiaries can claim if PRs cause loss to the estate through breach of duty.

Claims may arise from misuse of assets, maladministration, or negligence.

EXAMPLE:
1.if PRs divide an intestate estate among four known children without recognizing a fifth child, they may be sued by the fifth child for failing to distribute the estate correctly.

2.If PRs fail to sell volatile investments in a timely manner, leading to significant value decline, they are personally liable for the loss.

3.f PRs delay paying a £20,000 rent bill, incurring unnecessary interest, they are liable for that additional cost due to maladministration.

72
Q

What are some defenses to a claim for devastavit?

A

Section 61 Trustee Act 1925: PRs may be relieved from liability if they acted honestly and reasonably.
Example: In Re Gale (1941), trustees were not liable for allowing a beneficiary who falsely claimed to be a widow to benefit because they acted honestly.
Exclusion Clause: The deceased’s will may contain a clause that modifies PRs’ duties or excludes liability.
Acquiescence of Beneficiaries: If an adult beneficiary consents to a PR’s breach of duty, they cannot claim against the PR.
Protection Against Unknown Claimants: PRs are protected if they distributed the estate without knowledge of a beneficiary and followed advertisement procedures under s 27 Trustee Act 1925.
Example: If PRs distribute an estate without knowing about an omitted beneficiary and have placed advertisements, they won’t be liable to that beneficiary.
Limitation: Beneficiaries have 12 years to claim a share of an estate, but there’s no time limit for claims related to fraudulent breaches by PRs.
Example: Eric can claim against Derek within 12 years for taking property incorrectly, and there’s no limit for his claim against Derek for fraud.

73
Q

How can PRs protect themselves against unknown or missing claimants?

A

By following advertisement procedures under s 27 Trustee Act 1925, PRs are protected if they distribute the estate without knowing about an omitted beneficiary.

74
Q

What should PRs obtain to protect themselves from liability to missing beneficiaries?

A

PRs should obtain a Benjamin order, insurance, or indemnity from the beneficiaries. However, an indemnity is ineffective if the beneficiaries lack funds.

75
Q

Does Section 27 protect PRs from liability to family provision claimants?

A

No, Section 27 does not protect PRs against personal liability to successful family provision claimants (family claiming g they are entitled to estate)

Rs should wait at least six months from the date of the grant before distributing the estate to avoid personal liability. (so family settle their problems)

76
Q

What remedies do beneficiaries have if a PR distributes assets to someone not entitled?

A

Beneficiaries may pursue two potential remedies:

Proprietary Claim: Claim the assets or traceable proceeds unless the recipient is a bona fide purchaser for value without notice.

Example:If PRs wrongly give shares to Fred instead of Harry, and Fred sells the shares to buy an apartment, Harry can claim the apartment using equitable tracing principles, as long as Fred is not a bona fide purchaser for value without notice.

Personal Claim for Compensation: Seek compensation from the recipient after exhausting remedies against the PRs.

ExmPLE: Ministry of Health v Simpson (1951), the next of kin of Caleb Diplock recovered £15,000 from PRs after they distributed funds to charities based on a void gift. After exhausting remedies against the PRs, the next of kin sought the remaining balance from the charities, winning a personal claim for refund even though some proprietary claims failed.

77
Q

What is the time limit for bringing claims against a recipient of wrongly distributed assets?

A

The time limit for both proprietary and personal claims is 12 years from the date of the wrongful distribution.

78
Q

What are the key points regarding the appointment and removal of personal representatives (PRs)?

A

PRs cannot be forced to accept the office and can renounce their right to the grant.

Once granted, the office is for life unless removed by the court.

The court can remove PRs under s 50 of the Administration of Justice Act 1985, either substituting them or terminating their appointment.

Applications for removal can be made by the PR or a beneficiary.

The court must ensure at least one PR remains and will consider the welfare of the beneficiaries when exercising its discretion.

79
Q

What are the primary responsibilities of personal representatives (PRs) regarding the deceased’s debts and contracts?

A

PRs take on all of the deceased’s debts and liabilities.
Causes of action against the deceased continue against the PRs.
PRs must perform the deceased’s contracts.
They are liable only to the extent of the deceased’s assets.
The general limitation period for claims against the PRs is 6 years.

80
Q

When can personal representatives (PRs) be personally liable to creditors?
A:

A

PRs may be personally liable for devastavit, meaning loss of assets caused by a breach of their duties.
Personal liability requires PRs to pay the creditor from their own resources.

Examples of breaches include:
Paying a legacy before advertising for creditors, leading to insufficient funds.
Failing to collect and preserve the deceased’s estate.
Spending excessively on the deceased’s funeral.
Paying debts of an insolvent estate in the wrong order

81
Q

: What occurs during the transition from personal representatives (PRs) to trustees when a trust is created in a will?

A

t is common for the same individuals to act as both PRs and trustees.
Both roles are fiduciaries, and the Trustee Act 2000 applies to both.
Key differences:
Trustees can retire, while PRs cannot without a court order.
Limitation periods for claims differ between the two roles.
The transition is marked by PRs executing an assent to themselves as trustees for real estate.
For personal property, PRs become trustees once they finish administering the estate by paying debts and distributing assets.

82
Q

Q: When and how is a grant of letters of administration with the will annexed issued, and what is the order of entitlement under NCPR 1987, r 20?

A

When Issued: A grant of letters of administration with the will annexed is appropriate when there is a valid will, but no executor is able or willing to act. Situations include when no executor is appointed, all executors predeceased, renounced, or where the sole executor is a divorced spouse.

Order of Entitlement (NCPR 1987, r 20):
Executor (if applicable)
Residuary Legatee or Devisee holding in trust for another
Residuary Legatee or Devisee (including life interests)
Personal Representative of any residuary legatee or devisee
Other Legatee or Devisee (including life interests and creditors)
Personal Representative of any other legatee, devisee, or creditor
Note: Applicants from lower priority categories can apply only if no higher-priority person is available. They must explain why no higher-priority person is applying (this is known as “clearing off”) and detail their own entitlement.