Wills & Admin

Question 1

What are the different forms used when applying for grant?

Answer 1

1) For probate - PA1P

2) For grant of letters with will annexed - PA1P

3) For simple grant - PA1A

Question 2

Can minors be named executors?

Answer 2

Yes but they cannot take grant so need their parents to do so if only executors

Adults will take grant with power reserved to minor

Question 3

What’s the order of grant where will but no executors and statute?

Answer 3

Rule 20 Non Contentious Probat Rules

1) Trustee of residuary beneficiary
2) Residuary beneficiary (life tenant or interest)
3) PRs of residuary beneficiary
4) Any other beneficiary or creditor
5) PRs of beneficiary or creditor

Question 4

Order of grant - no will

Answer 4

Intestacy order of distribution (rule 22 of Non Contentious Probate Rules)

Question 5

What are the two IHT exempt estates?

Answer 5

Low value - gross value less than £325,000

Exempt excepted - gross value above £325,000, but not more than 3 million and after spouse / charity exceptions falls below £325,000

Question 6

General process and documents needing to be sent to apply for probate

Answer 6

1) Pay IHT within 6 months from the end of the month where deceased die (IHT 400, IHT 421 and money)

2) Apply for Probate Registry for grant: will and any codicils, receipted IHT 421, Form PA1P/PA1A, Death Certificate, Probate Court fee

Question 7

What are the rules on caveats and benefits / disadvantages?

Answer 7

Can be applied for to last for 6 months, however can incur legal action and costs where court feels it shouldn’t have been made, therefore try to negotiate before.

Question 8

What assets don’t need a grant to be administered?

Answer 8

Personal property, estate passing as joint tenants, banks if small amount of cash, assets of below £5000

Question 9

Legal duties of the personal representatives

Answer 9

1) Collect asset
2) Not commit waste
3) Exercise due care & skill as is reasonable in the circumstances - this is both objective and subjective so if they have special expertise they’ll be held to this.
4) Make fullest inquiries and searched
5) Act in interest of beneficiaries

Question 10

What are the nine powers granted to personal representatives?

Answer 10

1) Power to invest
2) Power to appropriate
3) Power of maintenance
4) Powers of sale
5) Power to delegate
6) Power to claim expenses and remuneration
7) Advancement of capital
8) Power to appoint trustees
9) Powers granted under will

Question 11

How can PRs use their power of appropriation?

Answer 11

They can swap things to satisfy pecuniary or general legacy or residue entitlement provided hasn’t been gifted to anyone else (e.g. car for cash)

Question 12

How can a PR be relieved of liability?

Answer 12

1) By the will - e.g. mistakes made in good faith
2) s.61 Trustee Act - court can relieve the PR where acted honestly, reasonably and ought fairly to be excused
3) by agreement with beneficiaries - full legal capacity and aware of breach

Question 13

What is the time limit on a London gazette notice?

Answer 13

Can distribute after 2 months

Question 14

Options for known but missing creditor or beneficiary

Answer 14

1) s.27 statutory advertisement but no protection where PR is known
2) Benjamin Order - court order allowing estate to be distributed without missing beneficiary
3) Indemnity from beneficiaries
4) Insurance
5) Pay an amount into court (last resort)
6) Court declaration of presumed death if missing for 7 years or more

Question 15

How to get round self dealing?

Answer 15

As a PR you can’t buy property off estate (voidable by beneficiary) or satisfy a legacy by selling off property unless authorised by the will, authorisation from beneficiaries or by the court, where it is deemed in interest of beneficiaries

Question 16

Rules re power of appropriation

Answer 16

Beneficiary must agree, and must be valued at date of appropriation. Also make sure no specific legacy is prejudiced

Question 17

PRs powers re minors

Answer 17

CANNOT GIVE GOOD RECEIPT THEREFORE:
- PR hold gifted property until 18 or contingency satisfied
- Parents give good receipt
- Use power to appoint trustees to receive and hold property

Where legacy carries right to income / contingent interest under intestacy, can apply income for maintenance, education and benefit (power of maintenance)

Question 18

Limits on power of advancement

Answer 18

Can apply capital where vested or contingent interest however life interest beneficiary must consent in writing

Question 19

What’s the rule on power to delegate

Answer 19

Delegable functions can be delegated (distribution, appointing trustees, income v capital).

Can also delegate by power of attorney but not for longer tenants 12 months

Question 20

Rule on gifting things with security attached

Answer 20

Beneficiary will take the gift subject to security (and therefore be liable to pay) unless contrary intention is shown in the will stating gift is free from debt

If beneficiary fails to keep up payments, chargee can enforce

Question 21

How to deal with unsecured debts and order of abatement

Answer 21

Statutory order of abatement is:

1) Property undisposed of in will (subject to specific / demonstrative legacies)
2) Property in a residuary gift (subject to specific / demonstrative legacies)
3) Property specifically given by testator for payment of funds
4) Funds retained to meet general and demonstrative legacies if not paid out

Assets in residuary first used to pay off debts (reduced per share); then general gifts, then specific gifts

Question 22

What happens when an estate is insolvent

Answer 22

Estate is then administered for the benefit of the estate’s creditors

Question 23

List applicants under Provision for Family and Dependants Act

Answer 23

1) Spouse or civil partner
2) Former spouse not remarried
3) Cohabitant for two years/someone living there like spouse
4) Child
5) Person treated as child of family
6) Wholly or partially maintained

Question 24

How does the court determine what reasonable financial provision is?

Answer 24

By looking at what they received from the estate and then looking at their individual circumstances by using the reasonable person test

Question 25

How does the court determine reasonable financial provision?

Answer 25

1) Size and nature of the estate 2) Financial needs and resources of the person making the claim 3) Financial needs and resources of anyone else making a claim + existing beneficiaries 4) Any obligation and responsibility the deceased had towards the person claiming and the beneficiaries 5) Physical and mental disabilities of the person making the claim and other beneficiaries 6) Any other matter

Question 26

Test for testamentary capacity and case law

Answer 26

Banks v Goodfellow W - understands making a will + effects I - inventory - understand extent of property L - legacies - comprehends + appreciates claims L - lucid - no disorder of the mind Sound memory, mind and understanding I.e. understands what a will is and its effects, understands the extent of the property, knows comprehends and appreciates claim he gives effect to, and have no disorder of the mind.

Question 27

Where doubt as to capacity, what to do?

Answer 27

Where there is doubt about capacity, 1) get a report from a medical practitioner, 2) ask a doctor to witness will, 3) make a file note that solicitor believes testator has capacity

Question 28

What are the two components of testamentary intention?

Answer 28

1) General intention to make a wil 2) Specific intention to make the particular will they are signing (know and approve of the contents of the will)

Question 29

What’s the difference between duress and undue influence?

Answer 29

Duress is coercion into making a will Undue influence is where there’s a special relationship between two parties / one based on trust and confidence, and the relationship is abused. Advise testator to seek legal advice before writing the will, and make sure testator is seen before

Question 30

What are the requirements on section 9 Wills Act?

Answer 30

The will must be in writing, signed by the testator, the signature must show the testator intended to give effect to the will, two or more witnesses must be present and each witness must sign the will in the presence of the testator

Question 31

What happens when a beneficiary or a spouse witnesses the will? What are exceptions?

Answer 31

The will is valid but they are not able to inherit as gift will fail Exceptions: 1) Two other witnesses present 2) Reexcuted via codicil without them 3) Not actually married to testator

Question 32

Can you amend a will which has already been executed?

Answer 32

Yes, if you have it attested (with 2 witnesses present - initials is fine but no pencil), or completely redacting the words making them impossible to read. Invalid alterations can be made real via codicil

Question 33

What does divorce do to a will and what to advise if they need money?

Answer 33

Cannot act as trustee, and any gifts to them fail as they are treated as if they died before testator Can still claim undre Provision for Family & Dependants Act

Question 34

Exception to the rule that a gift will fail in a will where beneficiary dies before testator

Answer 34

1) Substiutional language 2) Statutory Substitution s.33 Wills Act: pre-deceased ISSUE of testator passed to their issue living at time of death in equal shares 3) Joint tenants in doctrine of survivorship - language of equal shares indicates tenancy in common, without this is a JT

Question 35

What happens when a gift is adeemed?

Answer 35

At the time of death, the testator no longer owns the gift in the Will - only applies to specific legacies as general / pecuniary can be “made up”

Question 36

Can you gift to a minor?

Answer 36

Nah, them man can’t give valid receipt - so held on trust by parents/guardians fam

Question 37

What must a spouse achieve before inheriting under intestacy rules

Answer 37

Must survive the testator by 28 days

Question 38

What is the classic “waterfall” distribution of intestacy?

Answer 38

Spouse gets: 1) Personal chattels 2) Statutory legacy of £322,000 3) Half the residue which is shares with issue

Question 39

What is the statutory order and section number

Answer 39

S.46 (1) Administration of Estates Act 1925 1) Parents 2) Siblings of whole blood 3) Siblings of half blood 4) Grandparents 5) Uncles or aunts of whole blood 6) Uncles or aunts of half blood 7 7) The crown

Question 40

What happens when a beneficiary dies before intestacy?

Answer 40

Their children will inherit under statutory trust (must be 18 years or form CP) Does not apply to spouse/parents/grandparents so only to issue, brother, sister, uncle

Question 41

What’s the rule on inheriting the family home under intestacy?

Answer 41

Surviving spouse has the right to take the family home if it forms part of estate. However this must be exercised within 12 months of the grant And they must pay the difference using they own funds if they’re entitled to less than the value of the home

Question 42

What needs to be considered before selling assets to fund debts and expenses?

Answer 42

1) Check provisions of the will 2) Sell assets only according to the statutory order 3) Check asset is not secured 4) Check wishes of beneficiaries 5) Check whether assets are due to increase in value

Question 43

What is the rule on valuing estate property for CGT purposes for PRs

Answer 43

The value of the property is taken at the time the property was received at death

Question 44

What rates of CGT do PRs pay?

Answer 44

20% (lower rate) unless residential property (28%) and may deduct for costs and annual exemption

Question 45

What rates of tax do PRs pay for income other than CGT? What’s the interest exception?

Answer 45

8.75% - dividend income 20% - all other income Interest of less than £100 is exempt

Question 46

Steps to take when someone dies?

Answer 46

1) Secure assets 2) Register death 3) Check if will 4) ID the PRs 5) Check gifts made within 7 years, properties, life insurance, pension, bank and building society accounts, employment entitlements, vehicles, shares, trusts, partnerships, valuables, credit cards, loans, mortgages, unpaid invoices, funeral expenses 6) Notify death to banks etc 7) Value taxable estate (including instructing valuer for non cash assets) 8) Pay IHT

Question 47

What passes outside of estate?

Answer 47

1) Joint tenant properties (but still half of value forms part of estate) 2) Proceeds of life insurance payable to named beneficiaries (unless payable to estate) 3) Discretionary pension (but only where this is at the discretion of trustees, or payable to estate) 4) Gifts with reservation of benefit (still forms part of estate if benefit retained in gift) 5) Life interest under a trust (passes according to trust) 6) Dearhbed gift

Question 48

Form for IHT exempt estate

Answer 48

IHT205

Question 49

Form for IHT

Answer 49

IHT 400

Question 50

What’s the order of distribution in terms of residue?

Answer 50

1) Payment of debts / liabilities 2) IHT settlement 3) Specific gifts under will 4) Demonstrative / pecuniary gifts using designated funds or general estate 5) General gifts - use of estate funds 6) Residuary gifts - after all other gifts and expenses / taxes / costs 7) Undisposed estate Unless beneficiaries all consent to different distribution

Question 51

Limits on power to appropriate

Answer 51

- make sure no specific beneficiary prejudiced - must agree to the appropriation (or parent / guardian) - asset must be valued at the date of appropriation rather than death

Question 52

What are the PRs powers concerning minors?

Answer 52

- can hold property until they reach 18 - can appoint trustees of a minor’s property until 18 (note where contingency, this must be met before anything is paid out) - if legacy carries right to intermediate income, can apply income for maintenance, education and benefit

Question 53

In what circumstances can the PRs apply income for maintenance, education and benefit

Answer 53

FULL DISCRETION, unless: - where a minor has a right to intermediate income - where minor has contingent interest under intestacy rules

Question 54

Scope of power to advance capital

Answer 54

- vested or contingent interest - whether or not a minor - can transfer or apply properties as well as cash

Question 55

Limits on power to advance capital

Answer 55

You need any person with a prior interest (life tenant) to consent in writing

Question 56

Limits of power to delegate and what are the limits on power of attorney?

Answer 56

Only delegable functions: (1) distribution decisions, (2) payments from capital or income, (3) power to appoint trustees, (4) power to delegate - not liable for their actions unless not complied with statutory duty of care - can do a POA for 12 months of any duties, but remains fully liable.

Question 57

Limits on power to invest

Answer 57

Cannot invest in land other than by way of loan

Question 58

What two things can PRs do to protect themselves from future liability (generally)

Answer 58

1) make the fullest inquiries and searches (doesn’t extend to looking into whether adopted is effected though) 2) Records and evidence: get signed receipt from beneficiaries, prepare estate account prior to distributing and get signed by residuary beneficiaries.

Question 59

What action to take to limit liability where there is a potential matrimonial home right (intestacy)

Answer 59

Spouses can exercise the right to have house appropriated within 12 months of grant in partial or total satisfaction of interest - therefore, wait 12 months before distributing matrimonial home

Question 60

What to advise PR when they’re uncertain on something

Answer 60

- get guidance under CPR 64, apply to court for answer - consent of beneficiaries by way of indemnity

Question 61

What to do where PR is liable for desvastavit

Answer 61

- rely on s.61 Trustee Act - discretion to relieve PR of personal liability if honest, reasonable, ought to be excused - personal claim in equity for those with share

Question 62

Statute for family claims

Answer 62

Inheritance (Provision for Family and Dependants) Act 1975

Question 63

Matters to which court is to have regard in exercising powers to grant under provision for family / dependants

Answer 63

- Financial resources - Moral obligations - Size/nature - Child - how brought up - Anything else

Question 64

Docs needed to apply for probate

Answer 64

- Death certificate, - statement of truth, - original and 2x copies of wills/codicils, - Applicable tax forms (see above), - additional evidence, - supporting documentation, - payment for probate fees

Question 65

Rule on IHT205 in terms of death dates

Answer 65

Not needed if death after 1 Jan 2022

Question 66

When is mental capacity presumed?

Answer 66

1) When testator had capacity at time of instructions 2) When the will is prepared in accordance with instructions 3) At time of executing the will, testator capable of understanding that they were executing a will

Question 67

When is the testator presumed to have testamentary intention?

Answer 67

When will is executed in line with required formalities (unless blind, deaf, someone else signed or suspicious circumstances)

Question 68

When is a will valid?

Answer 68

1) 18 or over 2) Mental capacity 3) Necessary intent

Question 69

When is mental capacity presumed?

Answer 69

(a) T had such capacity at time of giving instructions; (b) Will is prepared in accordance with instructions and (c) At time of executing will, T was capable of understanding and did understand that she was executing a will

Question 70

What do PRs pay on savings income

Answer 70

20%

Question 71

What do testators pay on dividend income

Answer 71

8.75%

Question 72

Capital gain tax rates for PRs

Answer 72

20% - normal assets 28% - residential property

Question 73

Effect of attestation clause

Answer 73

rebuttable presumption formalities under s.9 have been complied with

Question 74

What is the golden rule

Answer 74

For will to be valid, testator must have mental capacity to make a Will and understand its effects (sound mind, memory, understanding)

Question 75

Solution for testator who is blind, illiterate, unable to sign (intention)

Answer 75

Special attestation clause

Question 76

Solution to someone else signing on behalf of testator

Answer 76

1) person signs in presence of testator 2) testator indicates they know + approve of contents

Question 77

Revoking wills - rules for destruction

Answer 77

Burn, tear, destroy (by him or someone in his presence) 1) Must intend to revoke 2) Must destroy original will 3) Partial destruction not good enough unless it's an essential part

Question 78

Unclear alterations - steps taken

Answer 78

1) IF changes signed properly - e.g. as a will, initials by amendments or by memorandum, THEN valid 2) IF NOT SIGNED, then if made before execution of the will, valid 3) IF NOT MADE BEFORE EXECUTION, where the original text is apparent (natural means of deciphering) then original applies. If not apparent, treated as blank space (partial destruction) unless 1) no intention to revoke, or 2) dependant relative revocation (basically prevents a gift from failing)

Question 79

Presumption re unexecuted changes to a will

Answer 79

Presumed to be made after the will unless evidence provided to Registrar or made to fill in a blank space (codicils can validate any amendments)

Question 80

Rule on later wills

Answer 80

In the absence of express revocation, later wills revoke earlier wills only to the extent of inconsistency

Question 81

When does marriage not revoke a will

Answer 81

Where 1) drafted in expectation to marry / form CP with that person 2) Intended that marriage should not revoke will Therefore advise to add in introductory clause indicating intention and expectation

Question 82

What is a mutual will and what is its effect

Answer 82

2 or more people agree not to revoke a a will without consent of the others The survivors property becomes subject to a constructive trust to give effect to the Mutual Will

Question 83

Exceptions to rule that legacy in intestacy will pass according to deceased beneficiary's will

Answer 83

1) Where spouse has not survived 28 days of testator 2) Where issue, sibling or aunt / uncle dies before 18 / marriage

Question 84

Date from which will speaks - beneficiaries v gifts

Answer 84

Gifts are read as the date of death (unless gift comes with use of "my" "now" "at present" which indicates contrary intention) Beneficiaries are read as date of the will (if no one meets description, goes to first person to meet description)

Question 85

Rule of use of "my" as regards gifts in wills

Answer 85

Where size is capable of fluctuating, date of death. Where size is fixed, date of will

Question 86

Minors re: grant - executors v administrators

Answer 86

Executors - no need for 2 Administrators - need 2 if minor beneficiary

Question 87

Options if don't want to act

Answer 87

Renunciation Reservation of power (need more than one executor) Appoint someone else

Question 88

Advice re gifts to executor

Answer 88

Make it clear whether the gift depends on them taking up the position

Question 89

What happens when executor dies before grant

Answer 89

Rule 20 applies i.e. trustee of residuary, residu

Question 90

Statute for Intestacy

Answer 90

S.46 (1) Administration of Estates Act 1925

Question 91

Statute for intestacy order

Answer 91

Section 22 Non-Contentious Probate Rules

Question 92

What is Residence Nil Rate Band

Answer 92

Applies where residency passed onto lineal descendants on death under will or under intestacy.

Question 93

Lineal descendants (RNRB)

Answer 93

Children, grandchildren, step-children, adopted children

Question 94

Conditions for property - RNRB

Answer 94

Lived in at some point (not just at time of death) Can still apply even if gifted to kids and some benefit remained

Question 95

Joint property exemption on IHT

Answer 95

10% reduction for property owned jointly with another person (not spouse) on the half share

Question 96

IHT Step 1

Answer 96

Work out NRB + RNRB

Question 97

IHT Step 2

Answer 97

Take total value of death estate (remember half JT) Take all lifetime gifts made within 7 years prior to death (potentially exempt transfers or chargeable lifetime gifts)

Question 98

IHT Step 3

Answer 98

Apply exemptions

Question 99

Exempted assets for IHT (all gifts)

Answer 99

To spouses / CPs and charities / political parties

Question 100

Exempted assets for IHT (gifts during lifetime)

Answer 100

Small gifts of £250 per year Wedding gifts up to £5000 (£2500 if grandparent) PETs 7 years before Normal expenditure out of income Annual exemption of £3000 (max 6000 if held over)

Question 101

IHT Step 4

Answer 101

Deduct reliefs (BPR or APR)

Question 102

IHT reliefs

Answer 102

Business Property Relief (BRP): 100% relief - interest in business or unquoted shares
 50% relief = controlling share (50% or more of votes) of quoted, and machinery / business shit (only qualifies If owned for two years before, used wholly or mainly For trading business, not caught by an exclusion

Question 103

What is abatement

Answer 103

Rule which applies where estate is solvent but unable to satisfy all legacies in full

Question 104

What is discharge

Answer 104

Obtaining good discharge means - have residuary beneficiaries sign accounts + receipt upon payment of legacies

Question 105

What happens when PR pays out lower ranking debts before higher ranking debts and exception to rule

Answer 105

Implied warranty that funds exist to pay higher and if not, PR is personally liable. Unless they don’t know about it (Harman v Harman)

Question 106

Rules on applying to pass over PR

Answer 106

Interested party can apply to pass over before grant

Question 107

Rules on applying to remove to substitute pr

Answer 107

Beneficiary can do so before or after grant

Question 108

What is a devastavit claim

Answer 108

PR makes unauthorised profit or causes loss

Question 109

Options for beneficiaries if loss to estate

Answer 109

Personal action against PR for breach of duty Tracing - trace property and recover value Personal action against recipient of estate assets