Wills

Question 1

Specific legacy

Answer 1

gift of a specified part of the estate that is clearly identified at time of execution
subject to ademption: so if it doesn’t exist at date of death–>fails

Question 2

General legacy

Answer 2

Doesn’t identify a particular item
ademption doesn’t apply so if the object (such as BMW car) isn’t in the estate, can require executors to purchase one if they have sufficient funds

Question 3

Pecuniary legacy

Answer 3

gift of cash

Question 4

Demonstrative legacy

Answer 4

general legacy that identifies the source from which the gift is to be made

Question 5

Residuary legacy

Answer 5

everything that is left of the estate not otherwise disposed of or taken up by payment of liabilities

Question 6

Ademption

Answer 6

a gift will adeem if it is no longer part of the estate, subject to binding contract for sale or no longer meets description in will
change in substance causes ademption - change in name or format does not

Question 7

Lapse

Answer 7

gift lapses if beneficiary predeceases testator
if substitutional gift included, will go to substitutional beneficiary. otherwise, falls into residue
if residual gift lapses, passes under intestacy

Question 8

Beneficiaries/objects of will are determined at date of:

Answer 8

will’s execution

Question 8

Gifts in will takes place as if executed:

Answer 8

immediately before death, unless superseded by words like “now” or “at present”

Question 9

per stirpes

Answer 9

‘through the root’, issue receive/split deceased person’s share

Question 9

When does class normally close?

Answer 9

when at least one beneficiary has a vested interest

Question 10

Class gift

Answer 10

gift of property to be divided amount beneficiaries who fit a general description -

Question 11

Grant of representation

Answer 11

legal document that confirms a person’s ability/right to administer the estate of the deceased

Question 12

Grant de bonis non

Answer 12

second grant to allow for completion of administration of estate
following death of last PR or when previous grant revoked
granted to whoever would have been entitled if original PR had never taken the grant
not needed if there is a chain of representation

Question 13

Chain of representation

Answer 13

when executor dies and their executor takes grant of probate

Question 14

Power to appropriate/appropriation

Answer 14

use of an asset to satisfy a legacy or interest in the estate provided the beneficiary consents and no specific beneficiary is affected
PR’s cannot make an appropriation in their own favour except cash or equivalent unless allowed to do so in the will

Question 15

“Small gifts” for IHT

Answer 15

up to £250, can give to as many people as you want
“all or nothing” exception: if gift £300, whole £300 is the transfer, not just the amount over £250H

Question 16

Lifetime gifts on marriage limits for exemption

Answer 16

parent: up to £5000
grandparent: up to £2500
bridge to groom or vice versa: £2,500
all others: £1,000
per marriage
not “all or nothing” so only excess above limits are transfers of value for IHT

Question 17

Potentially Exempt Transfer

Answer 17

not covered by an exemption, will not give rise to lifetime IHT charge but if the donor dies within 7 years, will become chargeable and any tax due will become payable by the recepient

Question 18

Tax rates for CLTs

Answer 18

if the donor pays, 25%
if the trustees pay, 20%

Question 19

in intestacy, survived by spouse and children, how is property split?

Answer 19

spouse gets all tangible moveable property (not money, investments and business property), £322,000 and half remaining property.
children split the rest

spouse can require PR to give them the matrimonial home in partial or total satisfaction of the spouse’s interest (will have to pay over difference if worth more than their share)

Question 20

How can PRs protect themselves from liability against unknown claims?

Answer 20

placing ads in the London Gazette, a newspaper local to the area in which any land forming part of the estate is situated and any other appropriate newspaper (for ex. trade journal) requesting any person interested contact within 2 months minimum

Question 21

What can PRs do if they cannot find a known beneficiary or creditor?

Answer 21

making the payment into court and distribute the rest
distribute everything with an indemnity from the beneficiaries
seek a Benjamin Order
purchase insurance against risk of missing claimant appearing

Question 22

Benjamin Order

Answer 22

Court order giving PRs leave to distribute estate based on assumption set out in the order (for ex that the missing beneficiary should be treated as having died before the deceased)