Wills

Question 1

What is a General Legacy/Gift?

Answer 1

A gift of an item, not necessarily owned at Date of Death, i.e. a ring to X

Question 2

What is a Specific Legacy/Gift?

Answer 2

A gift of particular item owned at Date of Execution of the will, i.e. my ring to X

Question 3

What is a Demonstrative Legacy/Gift?

Answer 3

A general gift paid out of a specific fund, i.e. £100 from Barclay’s account To X

Question 4

What is a Pecuniary Legacy/Gift?

Answer 4

A gift of a fixed sum of money, i.e. £1000 to X

Question 5

What is a Residuary Legacy/Gift?

Answer 5

The whole or part of the person’s estate once all gifts, debts, taxes and other costs have been paid.

Question 6

What is Administrator?

Answer 6

The person granted the Letter of Administration by a Court of Law, made on Intestacy. This Person will dispose of the estate of the deceased.

Question 7

What is Beneficiary?

Answer 7

A person who is entitled to receive a gift or legacy under a Will OR someone who benefits under a Trust.

Question 8

What is a Codicil?

Answer 8

An attached document to a Will, which alters the original will document. It has the same conditions for validity as the original will.

Question 9

What is an Estate?

Answer 9

All a person’s wealth, goods & possessions (including digital assets), which are left when they die.

Question 10

What is an Executor?

Answer 10

A person named in the Will (or appointed) to administer the estate of the deceased person, under the terms of the Will.

Question 11

What does Intestacy mean?

Answer 11

The rules of law that will govern how a deceased person’s estate is distributed when they die without leaving a valid will.

Question 12

What is a Legacy? (3)

Answer 12

1. A gift in a Will; 2. leaving part of one’s estate; 3. to a named legal person.

Question 13

What is Not part of a deceased person’s estate? (5)

Answer 13

1. Joint Property due to survivorship rule; 2. Insurance policies in Trusts; 3. Discretionary Pension Schemes under Contract law; 4. Nominations of National Savings accounts; 5. Trust property

Question 14

What does Testate mean? (2)

Answer 14

1. There is a valid will disposing of all property; 2. All the property is distributed under the will.

Question 15

What does Intestate mean? (2)

Answer 15

1. There is NO will; 2. Property of estate will be distributed according to Intestacy Rules.

Question 16

What is does partially Intestate mean?

Answer 16

1. There is a will which does NOT dispose of ALL the property or is partly invalid. 2. The will is followed as far as possible and the remaining property is distributed via Intestacy Rules.

Question 17

What makes a WILL valid? (3)

Answer 17

1. Capacity; 2. Intention; 3. Formalities in Execution followed

Question 18

What does mental capacity mean for a valid will?

Answer 18

1. Over 18 years old; 2. Person has a sound mind, memory and understanding; 3. No impairment of the functioning of the mind or brain.

Question 19

What does Intention mean for a valid will? (2)

Answer 19

1. There is a general intention to make a will; 2. There is a specific intention to make the will in question.

Question 20

What are the formalities for a valid will? (5)

Answer 20

1. It’s in writing; 2. Signed by the Testator ; 3. By any mark Intended to give effect to the will, could be an X/Name/initials on any page; 4. In the Presence of 2 or more witnesses; 5. The witnesses signed in the presence of the Testator.

Question 21

What is Duress? (2)

Answer 21

When a will is created under Force or Fear of injury.

Question 22

What is Undue Influence?

Answer 22

When something overpowers the Testator’s own volition/freedom of thinking in the creation of their Will?

Question 23

What are the Liabilities of in an Estate?

Answer 23

Debts that must be paid out from the Estate before the remaining assets are distributed. Debts must be paid in a defined priority order.

Question 24

What is an Insolvent Estate?

Answer 24

When the Estate does NOT have sufficient funds to pay for the expenses, debts and other costs in full.

Question 25

What is the priority order to pay Debts of an Estate? (2)

Answer 25

1. Secured debt; 2. Unsecured Debt

Question 26

What are Secured Debts of an Estate?

Answer 26

Mortgage, car loans, hire purchase loans

Question 27

What are Unsecured Debts of an Estate, what order are they paid in? (5)

Answer 27

1. Reasonable funeral expenses; 2. Preferred debts (wages/salary of employees); 3. Ordinary debts (money owed to HMRC, loans, credit cards, overdraft, utility/medical bills); 4. Interest on Ordinary debt; 5. Deferred debts - personal loans from spouse or family.

Question 28

How do PR’s collect and realize assets? (4)

Answer 28

1. PR’s must pay estate creditor before distributing to beneficiaries; 2. PR’s should NOT sell any property specifically gifted in the will to pay debts/ unless other assets have been exhausted; 3. Unsecured creditor should be paid in certain order; 4. Debts should be paid in a certain order.

Question 29

How should unsecured creditor paid from the Estate assets? (2)

Answer 29

1. From property not disposed of by the will; then 2. the residue of the estate, unless the will states another source.

Question 30

What is a Probate Valuation of the deceased person’s Estate?

Answer 30

A probate valuation is a calculation of the value of a deceased person’s assets, debts, and lifetime gifts. It’s used to:
1. Provide to the probate court before probate is granted; 2. Calculate any inheritance tax (IHT) due.

Question 31

How is the Probate Value of an Estate calculated? (7 not law)

Answer 31

The value is calculated by:
1.Assets: Including the home, other properties, bank accounts, personal items, cars, and money owed to the deceased ;
2. Gifts: Gifts made within seven years of death that are over £3,000 ;
3. Deducting Funeral expenses and Debts: Including mortgages, loans, credit cards, household bills, and work not yet paid for ;
4. Joint assets: Assets owned with someone else that are being passed to the surviving owner ;
5. Assets abroad: Assets owned overseas, such as property or money in foreign bank accounts ;
6.Assets held in a trust: Assets held in a trust ;
7. Government Pension schemes: If the deceased died before reaching 75 and did not draw from the pension, this will be passed to the beneficiaries named in the will, tax-free (if there is a will or through intestacy rules).

Question 32

What are the Estate assets?

Answer 32

Property, bank accounts, savings accounts, pension schemes, investment, stocks & shares, insurance cover, valuable household contents, businesses owned.

Question 33

What to do when someone dies? (7 general steps NOT law)

Answer 33

1. Immediately get medical certificate with cause of death (free from GP, hospital or coroner); 2. In 5 days must Register the Death at government office and get Death certificate; 3. Notify the government (Passport office, HMRC, DWP, DVLA, Local Council); 4. Arrange the funeral within 1 week; 5. If Executor/Administrator - Notify other organisations and close accounts (landlord, bank mortgage provider, employer, utility providers); 6. Return their passport/ drivers license; 7. Notify insurers and creditors.

Question 34

What is Testamentary Freedom?

Answer 34

Testator will always be able to revoke their will at any point before their death.

Question 35

How can you revoke your own will? (4)

Answer 35

1. Destruction by your own hand or by another in your presence and a your direction per your intention to destroy the will; 2. Express revocation clause in later will; 3. By marriage/civil partnership - automatically revokes a previous will before the marriage/partnership; 4. Divorce will only revoke parts of the Will that applies to your former spouse.

Question 36

How can you alter your own will ? (2)

Answer 36

1. You can use a Codicil after the will is signed as long as it is executed with the same formality as the original will. 2. Before you sign the will, you can strike out the original wording and input your changes by hand with the initials of the Testator and witnesses beside it. If substituted wording is not effective - the original wording can still take effect if apparent/legible.

Question 37

When is an alteration of a will invalid? (2)

Answer 37

1. When there is NO initials of the testator and witnesses beside the change, if the original wording is apparent it can be admitted in probate. 2. When the original wording is not apparent, or obliterated, which means the clause cannot take effect/ not legible. Exception - if there is substituted wording that is effective/legible, may conditionally take effect.

Question 38

What is the Pre-Grant Procedure for Personal Representatives of an Estate?

Answer 38

The PR must pay Inheritance Tax (IHT) to HMRC to obtain a Grant of Representation.

Question 39

How can a PR pay the IHT? (3)

Answer 39

1. Request for the bank to release funds directly to HMRC at their discretion; 2. Seek a loan from bank or a beneficiary; 3. Sell estate assets by showing a death certificate

Question 40

What is a Grant of Representation?

Answer 40

A High Court order that gives authority to PR’s to collect assets and distribute the estate of deceased under a) valid will via Grant of Probate or b) through Intestacy Rules if no will via Grant of Letters of Administration

Question 41

What is a Personal Representative? (2)

Answer 41

1. Executors who are willing to Act under a valid will, via Grant of Probate; 2. Administrators who are willing to act under Intestacy Rules, via Grant of Letters of Administration

Question 42

Who cannot be a PR?

Answer 42

Minors cannot be PR’s but their parents can apply for a grant ‘for their use and benefit on their behalf’.

Question 43

What is included in a Grant of Probate application that PRs have to prepare to submit to Court? (4)

Answer 43

1. 2 copies of the Will; 2. Official copy of Death certificate; 3. A tax form that no IHT is payable or that IHT was paid from HMRC; 4. Probate court fees.

Question 44

What is the Process of Applying for Probate or Letters of Administration? (5)

Answer 44

1. Probate application form PA1P or Letters of Administration form PA1A; then 2. Official copy of the Death Certificate; 3. The Original Will and 3 copies (if probate only); 4. The application court fee; 5. If no IHT payable complete Estate Summary Form NIPF7 / if IHT is due complete form IHT 400.

Question 45

What is the Probate value of an Estate?

Answer 45

The value of an estate for probate is the total value of the deceased’s assets minus any debts.

Question 46

How many Executors are required?

Answer 46

1. Maximum 4 but a minimum of 2 if there is a life interest in the estate or a minor beneficiary; 2. if no minors or life interest, then 1 executor is sufficient.

Question 47

How can you become an Executor? (2)

Answer 47

By appointment: 1. expressly under the will or 2. impliedly by intermeddling in the Estate.

Question 48

On what grounds can you remove an Executor? (5)

Answer 48

Yes, they can be removed after being appointed on the grounds of: 1. neglect of duties; 2. incompetence; 3. conflict of interest; 4. actions contrary to the best interest of the estate and beneficiaries; 5. a complete breakdown of trust with the beneficiaries.

Question 49

What does it mean to intermeddle in an Estate?

Answer 49

A legal term that means a person has dealt with an estate to such an extent that they have assumed responsibility for it and cannot, therefore, simply “walk away” without the court’s approval. Once they start to act as Executor, they cannot renounce the appointment.

Question 50

When is a Grant of Probate approved for Executors? (2)

Answer 50

The court order/Grant given by the Court that appoint Executors when there is a 1. valid will; and 2. the Executor(s) are willing to act under the will.

Question 51

When is a Grant of Letter of Administration with the Will Annexed given?

Answer 51

The court order/Grant given by the Court that appoints an Executor when there is a valid will but either: 1. the will does not appoint an Executor expressly; 2. the appointed Executor pre-deceased the Testator; 3. the appointed Executor declines to act/renounces.

Question 52

Who can apply to be an PR when there is NO express Executor appointed under a valid will? (5)

Answer 52

When there is no Executor, the following may apply: 1. a Trustee of the Residuary Estate; if none then 2. any other Residuary Beneficiary under the will; if none then 3. PR of a Residuary Beneficiary who has died; if none then 4. any other Beneficiary or Creditor; if none then 5. the PR of any other Beneficiary or Creditor.

Question 53

What are Letters of Administration?

Answer 53

The Grant given by the Court that appoints an Administrator when there is NO will.

Question 54

Who is entitled to apply for a Grant of Letter of Administration if there is NO will? (10)

Answer 54

1. Deceased’s surviving spouse/civil partner; 2. Children of deceased or their issue if children are predeceased; 3. Parents; 4. Brothers/sisters full blood; 5. Brothers/sisters half blood; 6. Grandparents; 7. Uncles/ aunts full blood; 8. Uncles/ aunts half blood; 9. the Crown / Treasury solicitor; 10. Creditor of the Deceased.

Question 55

How many Administrators can you have if NO will?

Answer 55

At least 2 when there is a minor beneficiary under 18 years or a life interest in the estate. If not then 1 will suffice to act.

Question 56

What are the duties of a Personal Representative of an Estate? (5)

Answer 56

1. Duty to identify and collect Assets with due diligence/preserve the Estate; 2. Duty to Distribute Assets via Will or intestacy rules; 3. Duty to apportion Income between period before death and the administration period, not always in the will. ; 4 Have the Proof of Title to assets - must have the grant of representation/ court order to deal with the Estate; 5. Duty to Act in the best interest of the Beneficiaries with reasonable care and skill.

Question 57

When is a PR personally liable for a Breach of Duty? (3)

Answer 57

PR are liable personally for a breach of duty which causes loss to a creditor or beneficiary either by: 1. Maladministration; 2. Misappropriation of property; 3. Negligence.

Question 58

When are PRs NOT liable for a breach of duty? (2)

Answer 58

1. when the breach is done by another PR (unless the PR was negligent in preventing the other’s breach); 2. when the court has the power to relive the PR of liability as they ‘acted honestly and reasonable and ought fairly to be excused’.

Question 59

What are the Powers of a PR? (11)

Answer 59

1. Power of maintenance - apply income for the benefit of a minor’s maintenance/education; 2. Advance funds to B’s with vested or contingent interest with consent of life tenants; 3. Insure - property of the Estate; 4. Appropriate - use asset to satisfy legacy; 5. Remuneration - reimburse themselves for professional expenses; 6. Invest suitable for the Trust/should be diversified - act with honesty and reasonable prudence; 7. Use Assets to sell/lease/mortgage estate property; 8. pay unsecured debts; 9. To appoint trustees for minor beneficiaries; 10. Delegate duties to agents, but appoint agents with reasonable care; 11. Can carry out business as sole trader under terms of the will.

Question 60

Are PR’s liable to unpaid Beneficiaries or Creditors who are entitled from the Estate?

Answer 60

Yes, even if not known when distribution is made, unless they comply with s. 27 Trustee Act 1925, they are personally liable

Question 61

What steps can PR’s do to protect themselves against Unknown claims? (3)

Answer 61

You can 1. place adverts in the London Gazette, or local newspaper to the area; 2. requesting any person interested to contact the PR’s solicitor; 3. within a minimum of 2 months.

Question 62

How can PR’s protect themselves against Known beneficiaries or creditors? (4)

Answer 62

1. make the payment owed into the Court; 2. get an indemnity from the beneficiaries to distribute everything; 3. Seek a Benjamin Order; 4. purchase insurance against the risk of a missing claimant appearing.

Question 63

What is a Benjamin Order?

Answer 63

A court order giving PR’s leave to distribute the Estate based on an assumption set out in the order. Any claim can be brought against the other beneficiaries not against the PR. **Note - It permits PR’s to distribute an estate based on certain events having taken place or not taken place. It is often used when PR’s cannot trace Beneficiaries or even figure out if they are still alive.

Question 64

How can PR’s protect themselves from possible claims against the estate under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 64

They should wait 6 months from the date of the grant to distribute the Estate.

Question 65

What are the 4 parts of an Attestation clause in a will?

Answer 65

An attestation clause is a section at the end of a will that details the formalities required to make the will valid, and is signed by witnesses:
1. Who signed it: The attestation clause lists who signed the will.
2. When it was signed: The attestation clause states when the will was signed. DATE
3. Who witnessed it: The attestation clause lists who witnessed the will.
4. How it was executed: The attestation clause describes how the will should have been executed.

Question 66

What is a Revocation clause in a will?

Answer 66

A revocation clause in a will is a statement that cancels all previous wills made by the testator. It’s usually the first clause in a will and is one of the most important. The clause typically reads, “I revoke all my earlier testamentary dispositions”/ “I hereby revoke all former wills”

Question 67

What is a Caveat in a will?

Answer 67

A caveat in a will is a Notice that prevents a Grant of Probate from being issued by the Court, which gives the person who lodged the caveat time to investigate their concerns.

Question 68

What is the purpose of a Caveat in a will? (3) (not law)

Answer 68

A caveat is used when there’s a dispute about a will or who can apply for probate. It’s a way to delay the administration of the estate and allow time to:
1. Investigate concerns;
2. Receive legal advice;
3. Make investigations, such as obtaining information from the solicitors who prepared the will.

Question 69

How does a Caveat work? (not law)

Answer 69

The caveat is entered by lodging an application form at the Probate Registry. It lasts for six months, but can be extended for another six months.

Question 70

When should you lodge a Caveat in a will? (5) (not law)

Answer 70

You might use a caveat if you have concerns about:
1. The validity of the will ;
2. An executor refusing to disclose a copy of the will ;
3. Fraud or undue influence in the will ;
4. The person applying for a Grant of Representation may not be the person entitled to do so ;
5. The estate assets may be disposed of contrary to the intentions of the will.

Question 71

Who can contest a Will? (not law)

Answer 71

The following people have the right to contest a will:
1. Beneficiaries of a prior or current will ;
2. Beneficiaries of a version of a will after the will that’s now in question ;
3. People who would have been heirs in the absence of a will or intestacy law prohibition.

Question 72

What is a Citation in Probate court?

Answer 72

A citation in probate court is a written notice from a Probate Registrar or Judge that requires a party to take specific steps or appear in court. Citations are used to advance the administration of a deceased person’s estate when someone has the right to act but is not taking the necessary steps.

Question 73

What are the Types of Citations in Probate court? (3)

Answer 73

1. Citation to accept or refuse a grant: Requires the person cited to accept or refuse the grant of probate ;
2. Citation to take probate: Requires the person cited to obtain a Grant of Representation, complete the action, or allow the beneficiary to obtain the grant ;
3. Citation to propound a will: Requires the person cited to take action in relation to the will.

Question 74

What can a Beneficiary do with their inheritance gift? (2)

Answer 74

1. they may Disclaim it orally or in writing (must be in writing for IHT and CGT); 2. they may add a Variation to allow them to change who gets their inheritance.

Question 75

What happens when you Disclaim your inheritance? (2)

Answer 75

The specific gift falls in the residue of the Estate; 2. if the last or sole beneficiary disclaims the residue, the residue passes through intestacy. **Note a disclaimed gift does not prevent the person from receiving the property under intestacy. You cannot split up a disclaimer (its all or nothing).

Question 76

What happens when you have a variation on who gets your inheritance?

Answer 76

1. If in writing and made within 2 yrs after death and not monetary - it will be treated as if the deceased left the gift to the NEW beneficiary; 2. if not then the gift will be treated as a transfer for IHT and deemed a disposal for CGT from the original beneficiary; **Note - A variation can be of part of a gift inherited, not the whole gift.

Question 77

How do PR’s distribute the gifts from the Estate to the Beneficiary? (4)

Answer 77

1. Chattels - transfer by delivery to B; 2. Company shares - a stock transfer form should be completed and sent with a copy of the grant and share certificate to B; 3. Land - transfer requires an assent in writing, B needs to register interest at HMLR (B’s are entitled to income from property gifted to them) ; 4. Pecuniary gifts are usually paid out form the residue.** Note: Costs of transfer are paid by the beneficiaries unless the will states otherwise.

Question 78

Can a minor receive a gift from the Estate?

Answer 78

No they cannot give valid receipt unless the will provides otherwise.

Question 79

How can a minor receive a gift from PR’s? (3)

Answer 79

The PR may: 1. accept receipt from the minor’s parents; 2. hold the property in trust until they reach 18 yrs old; or 3. appoint a trustee to receive and hold the property until they attain the age of 18 yrs old.

Question 80

Can PR’s charge for acting for the Estate? (2)

Answer 80

Generally you cannot charge, unless 1. the will authorizes it; or 2. by agreement with the beneficiaries.

Question 81

How do PR’s handle the Residue of the Estate? (2)

Answer 81

1. Before distributing the residue - They must calculate any tax liability and withhold this amount to cover this; 2. They prepare estate accounts to show residuary beneficiaries what is available to them, they will endorse and discharge the PR’s with an agreement o indemnify PR’s against all claims (If B’s refuse to approve accounts, PR’s may ask the Court to approve and pay B’s share into Court).

Question 82

What is an Assent and what does it involve? (4)

Answer 82

1. For property, an Assent is the name of the document used to transfer legal title/ownership of property or land from the Estate of someone who has died, into the name of the new owner, the Beneficiary; 2. if relates back to the date of death; 3. it must be in writing, signed by the PR’s and name the person in whose favor it is given; 4. HMLR must be notified on the change of land ownership from the deceased to the Beneficiary.