Wills 3

Question 1

When does a gift in a will take effect?

Answer 1

• Subject to a contrary intention in the will, a gift in a will takes effect as if the will had been executed immediately before death (rather than at the date of the will). This is becase the testator’s property might change between execution and death.* This can be superseded by use of the words “now” or “at present”.

Question 2

When are the objects of a will determined?

Answer 2

The beneficiaries (‘objects”) of the will are determined as at the date of the will’s execution (subject to the class closing rules).

Question 3

T’s will gives her jewellery collection to the eldest daughter of F. On the day the will is executed, the eldest daughter of F is D. But before T’s death, D dies in a car accident. Tessa then dies. F has a second daughter, E. Can E inherit D’s gift?

Answer 3

No because for beneficiaries the will speaks from the date of the wills execution. On that day D was F’s eldest daughter. Since she’s now deceased, she can’t receive the gift and the gift lapses. Note, E could have received it if T’s will said “F’s eldest surviving daughter”.

Question 4

What is the difference between a legacy and a devise?

Answer 4

Legacy: a gift of personalty (personal property). Devise: a gift of realty (real estate).

Question 5

What are the 5 types of legacies that mau be made in a will?

Answer 5

• Specific legacy* General legacy* Pecuniary legacy* Demonstrative legacy* Residuary legacyAny of these may be in the form of a trust. Different rules apply to different types

Question 6

What is a specific legacy?

Answer 6

A gift of a specified part of the estate that is clearly identified at the time of the will’s execution. These are subject to ademption if the testator no longer owns the specified gift.Example: “My BMW car registration number 123XYZ4 to my daughter”.

Question 7

What is a general legacy?

Answer 7

A legacy that does not identify a particular item. Example “a BMW car”. * The testator may or may not own a BMW car at the time of making the will. * The doctrine of ademption does not apply to general legacies. Therefore, if there is no BMW in the estate, the beneficiary is entitled to require the executors to purchase such a car if they have sufficient funds.

Question 8

What is a pecuniary legacy?

Answer 8

A gift of cash. Almost all pecuniary legacies are general (“£1,000 to the NSPCC”), but they could equally be specific (“£1,000 to the NSPCC payable from the £5,000 owed to me by John Doe”) or demonstrative.

Question 9

What is a demonstrative legacy?

Answer 9

A general legacy which identifies the source from which the gift is to be made. Example: “£1,000 to the NSPCC to be paid from my savings account held at ABC Bank”. * If the account is closed at the date of death or no longer has sufficient funds to meet the legacy, the charity can look to the executors to meet any shortfall from other cash or assets in the estate.

Question 10

What is a residuary legacy?

Answer 10

Everything that is left of the deceased’s estate, not otherwise disposed of by other gifts or taken up by the payment of liabilities and the costs of administration.

Question 11

In which 3 situations do gifts fail?

Answer 11

• Ademption* Lapse* Beneficiary/their spouse witnesses will unless 2 neutral witnesses also witness it.

Question 12

What is the doctrine of ademption?

Answer 12

A specific gift will fail (or ‘adeem”) if it is:* no longer part of the testator’s estate, * is subject to a binding contract for sale, or * no longer meets the description in the will. Note: a change in the substance of the subject matter of a specific gift causes that gift to adeem, but a mere change in the name or form does not.

Question 13

The testator makes a specific legacy of ordinary shares in ABC plc owned by them at the date of their will. The shares are in some way altered, due to an amalgamation or reconstruction of the company during the testator’s lifetime, but they represent the same shares in the company. Does the doctrine of ademption apply?

Answer 13

No, the gift does not adeem.

Question 14

The testator makes a specific legacy of ordinary shares in ABC plc owned by them at the date of their will. ABC plc is acquired by another company and the shareholders are given shares in the acquiring company as payment for their shares in ABC plc. Does the doctrine of ademption apply?

Answer 14

Yes, the substance of the subject matter changes and the gift then adeems.

Question 15

T makes a specific legacy of 500 ordinary shares in XYZ PLC to her daughter. During the testator’s lifetime, the company declares a stock split and the testator receives an additional 500 shares in XYZ for a total of 1,000. Does the doctrine of ademption apply?

Answer 15

No. When the testator dies, the daughter will receive the 1,000 shares because there was only a change in form. The subject matter of the shares was the same.

Question 16

T makes a specific legacy of 500 ordinary shares in XYZ PLC to her daughter. XYZ PLC is acquired by ABC PLC during the testator’s lifetime. ABC gives shares in ABC to the shareholders of XYZ as payment for their shares in XYZ. At the time of the testator’s death, she now owns 500 ordinary shares in ABC PLC. Does the doctrine of ademption apply?

Answer 16

Yes, the gift to the testator’s daughter adeems because the subject matter of the gift changed. The shares were in a different company.

Question 17

What happens if a testator makes a specific gift of an asset described in the will but before their death acquires a different item which meets the same description?

Answer 17

The basic rule of succession is that a will speaks from the date of death unless a contrary intention is apparent in the will. Example: a gift of “my car”. By referring to “my car”, the testator is usually taken to have shown a contrary intention, though this construction may vary according to the circumstances. If the testator had a Range Rover at the date of execution and on death had a VW, the gift adeems.

Question 18

What happens if a testator makes a specific gift of property that it can vary in value?

Answer 18

The testator will usually be taken to have made a gift of any items satisfying the description at death e.g. “all my jewellery”.

Question 19

A testator makes a gift of “my car”. What type of legacy is this?

Answer 19

A specific legacy taken to mean the car the testator had when the will was written, so if that car is gone, the gift will adeem.A testator can avoid such a result with language such as ‘the car I own on my death”.

Question 20

What does ‘lapse’ of a gift in a will mean?

Answer 20

If a beneficiary has predeceased the testator, the gift will lapse (i.e., fail). * Note, it is common practice to include a substitutional gift in the will. If the substitutional gift is effective, the gift will go to the substitute beneficiary and will not lapse. * Otherwise, the subject matter of the gift falls into the residue. If a residual gift lapses, it passes under the rules of intestacy.* Exceptions: gifts to joint tenants where at least one survives and gifts to issue which pass per stirpes.

Question 21

C’s will leaves “£10,000 to my nephew, D, and the rest of my estate to my civil partner, R, but if he fails to survive me then to my sister, E”. Only C’s sister survives him. What happens to the gifts to D and R?

Answer 21

The gifts to D and R lapse. The legacy to D falls into the residue, and E will take C’s entire estate.

Question 22

If a gift in a will is made “to A and B jointly” and A dies before the testator, does the gift lapse?

Answer 22

No. The whole gift passes to B.A gift by will to two or more people as joint tenants will not lapse unless all the recipients die before the testator.

Question 23

If a gift in a will is made “to A and B in equal shares” and A dies before the testator, does the gift lapse?

Answer 23

Here, there are words of severance. A’s share lapses and B takes only one share. The lapsed share will pass under the intestacy rules (subject to a substitutional gift being included in the will).

Question 24

Can gifts in wills be made conditional to the beneficiary surviving a certain amount of time?

Answer 24

Yes, it is common for gifts in wills to be made conditional upon the survival of a beneficiary (other than a surviving spouse) for a specified period of time, usually 28 or 30 days, after the death of the testator. This is to avoid double probate administration over the same asset/assets.The gift fails if the beneficiary fails to survive for the specified number of days.

Question 25

What is the law of ‘commorientes’?

Answer 25

In circumstances where it is impossible to determine who died first out of the testator and a beneficiary, the law of ‘commorientes’ provides that, for succession purposes, the younger person survives the elder.

Question 26

A, 68, and H, 64, a married couple, die in a car accident. It is impossible to determine who died first, or if they died in the same instant. Their wills each leave everything to the surviving spouse, failing which to their two children. What happens to their estates?

Answer 26

The law will assume that A died first as the elder of the two. His estate therefore passes to H under succession law. The combined estate will then pass to the children under the terms of H’s will.

Question 27

If a gift is made to the testator’s issue and they die before the testator, does the gift lapse?

Answer 27

No. If a gift is made to the testator’s child or other issue (remoter lineal descendants, such as grandchildren or great grandchildren), the living issue will receive the gift. * This includes children who are ‘en ventre sa mère’ -conceived but unborn. * Unless a contrary intention is shown in the will, the issue will take ‘per stirpes’ and if more than one in equal shares. Per stirpes means “through the root’ and indicates that the issue of the deceased person will split the deceased person’s share.Note, this rule does not apply to other beneficiaries who are not issue.

Question 28

M’s will leaves her estate to her three sons, A, B, and C equally. C predeceases her. He had two daughters, D and E. What happens to C’s share of the estate?

Answer 28

On M’s death, A and B will inherit one-third each. C’s share will be divided equally between D and E.

Question 29

The testator’s will contained the words “to such of them my daughters. .. as shall survive me”, and the clause containing those words went on to provide “and if more than one in equal shares”. The testator had three daughters. One predeceased the testator but that daughter was survived by her own daughter (the testator’s granddaughter). What happens to the share of the predeceased daughter?

Answer 29

The gift lapsed. The court held that the language was sufficient to show that the testator did not want the deceased daughter’s share to go to her issue. Therefore, the gift was given only to the two surviving daughters.

Question 30

C’s will leaves “£10,000 to my nephew, D, and the rest of my estate to my civil partner, R, but if he fails to survive me then to my sister, E”. Only Clive’s sister survives him. D has 2 children. What happens to the gift to D?

Answer 30

Because D is not C’s issue, the legacy of £10,000 is not saved for any of D’s children who survived C.

Question 31

If a beneficiary to a will or their spouse/civil partner witnesses a will, is the will valid?

Answer 31

Yes, the will is valid but in most cases the gift to the beneficiary will fail.The gift will not fail if, ignoring the attestation by the beneficiary or spouse or civil partner, there are at least two other witnesses who are not beneficiaries or their spouses or civil partners.

Question 32

L asks her sister, M, and her friend, H, to act as witnesses to her signature in her will. L’s will gifts a house to M. Is the gift to M valid?

Answer 32

Unfortunately, this specific gift to M fails as she is a witness to the will.

Question 33

L asks her sister, M, her friend, H, and her next-door neighbour, V, to act as witnesses to her signature in her will. L’s will gifts a house to M. Is the gift to M valid?

Answer 33

Yes, the gift remains valid because M is an unnecessary witness, there being two other valid witnesses in H and V.

Question 34

What does the term ‘children’ mean in the context of wills?

Answer 34

Legitimate, illegitimate, and adopted children but not stepchildren

Question 35

What is a class gift?

Answer 35

A class gift is a gift of property to be divided among beneficiaries who fulfill a general description e.g. “£100,000 to the children of A”, “£100,000 to the children of A who attain the age of 18” or “£10,000 to each of the children of A” * Class closing rules apply to avoid the difficulty that the question of who the beneficiaries are cannot be answered definitively until A has died.* Note, the will may exclude the class closing rules in a specific provision

Question 36

What are the class closing rules?

Answer 36

‘Class closing’ rules have developed for:* vested gifts (no condition needs to be satisfied) and * contingent gifts (conditional gifts e.g., where a specified age needs to be attained). These rules apply unless the will provides otherwise. * When a class closes, it excludes any potential beneficiary not then living. The rules are complex in this area.* Normally, a class will close when at least one beneficiary has a vested interest - to the exclusion of any potential beneficiary not then living (‘living’ includes a child already conceived and subsequently born alive).

Question 37

“£5,000 to the children of Z”. When does the class close?

Answer 37

The class closes at the date of the testator’s death if there is any child of Z then living. If not, the class remains open until the death of Z. Note, any children born after the class closing will not receive anything unless they are conceived when it closes and later born.

Question 38

“£5,000 to the children of Z who attain the age of 18”. When does the class close?

Answer 38

The class closes at the testator’s death if any such child has already reached 18. It will include those children already over 18 and any others then under 18 who later reach that age. If no beneficiary is yet aged 18, the class remains open until the first beneficiary reaches 18, whereupon it closes around that child and any others then living who later reach 18.

Question 39

“£5,000 to each of the children of Z who attain the age of 18”. When does the class close?

Answer 39

The class closes at the date of the testator’s death. If no children exist at that point, the gift fails. * Strictly speaking, this is not a class gift as the size of each beneficiary’s entitlement is fixed and does not vary according to the number of class members. * However, such a gift shares many of the practical problems of true class gifts-the personal representatives are likely to have difficulty distributing the estate as they will not know how large a fund to retain. * In the absence of any provision to the contrary, the class closes at the date of the testator’s death and includes only children then living. The object of this rule is to allow the personal representatives to distribute the estate.

Question 40

Can class closing rules be disapplied?

Answer 40

Yes, a will may exclude the class closing rules through a specific provision therein e.g. “To the children of R living at my death” or “To my grandchildren, whenever born”.