Wills & Administration of Estates Flashcards
What does not form part of the succession estate?
- Donations Mortis Causa (gift made in contemplation of death)
- Discretionary pension scheme benefits
- Insurance policies written in trust
- Statutory nominations
- Property held as joint tenants
What is the statutory order of entitlement of relatives who survive the deceased on intestacy under s46?
- If the deceased leaves a spouse who survives them by 28 days
- If the deceased leaves an issue
These are then the only class to consider. If not, then
- Parents
- Siblings
- Grandparents
If a person leaves a spouse and issue in intestacy, what are each entitled to?
The spouse is entitled to the personal chattels (excluding items for investment purposes only), statutory legacy (£270,000) and one half of the residue absolutely
Issue is entitled to one half of the residue, though they must be aged 18 or over or married in order to inherit (if the issue has died, then their own issue can inherit in their place as long as they are at least 18 or married)
At what point must the person making the will have testamentary capacity?
At the time the will is EXECUTED
What is the exception to the rule an individual must have capacity at the time of execution?
Parker v Feldgate: a will is still valid if
- had capacity at the time they gave instructions
- will was prepared in accordance with those instructions
- at time of execution, testator understood they were signing a will for which they had previously given instructions
When is testamentary capacity presumed?
If will appears to be rational and has been duly executed
Who has the burden of proving undue influence?
Burden lies with the person making the allegation and the court requires evidence
What is the definition of undue influence and duress
Occurs where a testator is coerced into making the will or including particular terms, against their judgement or contrary to their intention
Who has the burden of proving the testator had testamentary capacity?
The person who is seeking to prove the will as valid and they must produce evidence to rebut the presumption that the testator had testamentary capacity
What are the formal requirements for a will as outlined in s9 Wills Act?
- writing and signed by the testator
- testator intended his signature to give effect to the will
- signature is made or acknowledged by the testator in the presence of two or more witnesses present AT THE SAME TIME
- each witness either attests and signs the will OR acknowledges the signature (must be in the presence of the testator but not necessarily the other witness)
When is there no presumption of knowledge and approval of the will?
- The testator is blind or illiterate
- Will was signed by someone on behalf of the testator
- there are suspicious circumstances
What does an attestation clause for a will do?
it raises the presumption that the will was executed in accordance with the s9 requirements
Who CANNOT be a witness to a will?
A beneficiary (otherwise they will lose their legacy) but the rest of the will remains valid
What are the minimum and maximum number of executors?
Minimum of one and maximum of four
Who can charge for their time as executors?
Only professional executors and trustees can charge for their time as executors.
Though all executors can claim reasonable expenses
How does an executor renounce their role if they are unwilling to act?
- They must sign a form of renunciation
- This will be noted on the grant when it is issued
- Renunciation is final and cannot change their mind without court approval
- Executor cannot renounce if they have already inter-meddled with the estate (things such as arranging the funeral and securing the deceased’s assets DO NOT COUNT as intermeddling)
How can an executor reserve power?
- there must be one other executor who takes out a grant of probate
What happens if undue influence is proven?
The will is declared invalid and the intestacy rules will apply
What should the PR’s do if something needs to be rectified in the will?
Application for rectification must be made within 6 months of the grant, though it is possible to make a late application with the permission of the court
If the personal representatives make a distribution six months or more after the grant, they will not be personally liable to a beneficiary wishing to claim against the estate as a result of the error. The disappointed beneficiary may still be able to recover from beneficiaries who have already received a distribution
What is the general rule on amendments made after the will is executed?
General rule is that any amendments after the will has been executed are invalid and unenforceable
What is the rebuttable presumption of alterations to a will?
There is rebuttable presumption that alterations are made AFTER the will is executed
When will an alteration to a will post-execution be valid?
If it meets the formalities of a will (signed by testator and two witnesses) then it is valid
When are obliterations effective?
Where text has been crossed out so that the original text is illegible
AND
With intention to revoke
If the alteration is filling in a blank space, when is this presumed to have occurred?
There is rebuttable presumption that this was filled in prior to the execution of the will
When is a codicil valid?
If it is executed in accordance with the s9 requirements
What is the effect of a codicil on the will?
It effectively republishes the will (new witnesses take effect), will is deemed executed on the date of the codicil
Does a statement stating ‘this is the last will and testament of…’ revoke earlier wills?
This does not invalidate the earlier wills except to the extent that the new will is not consistent with the earlier wills or simply repeats the earlier will
how can a will be revoked by destruction?
burning, tearing or otherwise destroying it by testator or someone in the presence of testator and by his direction
provided there is also the intention to revoke: can be absolute or conditional (ie on getting divorced)
What is the rebuttable presumption concerning a will last known to be in the testators possession but unable to be found upon their death (revocation?
Rebuttable presumption that the will has been destroyed with the intention to revoke it
What happens to a will if a person marries?
The will is automatically revoked in full when a person marries
What happens to the will when a married testator gets divorced?
The divorce or dissolution automatically operates as a partial revocation of the will (operates as though the former spouse has pre-deceased)
In relation to class gifts to children, what does the term children include?
Includes those who were adopted or those who were born outside of marriage
When does a class close when the testator makes a class gift?
The class closes when one member of the class becomes entitled in possession
What is the general rule regarding specific gifts of property in a will, when does it speak from?
Unless a contrary intention is shown, the will speaks from the date of the testators death in respect of identifying the subject matter of the gift
HOWEVER, the use of the word illustrates contrary intention so there is a high likelihood these gifts will fail
Can a beneficiary be an executor of a will?
Yes
When is IHT due for payment?
Six months from the end of the month of death
What are the three types of grant?
Grant of probate (when the deceased had a will and capable executors)
Letters of Administration (with will annexed): when deceased had a will but no executors capable of acting
Letters of Administration: when the deceased died intestate
Who is the deceased’s estate vested in if a grant for letters of administration are requested?
It is vested in the public trustee
When must an application under the IPFDA be made?
It cannot be made more than six months after the date the grant of representation has been issued
*court has discretion to extend the time limit (onus on applicant to show special reasons for the delay)
Who can make an application under the IPFDA?
- Spouse or civil partner of deceased
- Former spouse who has not remarried
- Person who cohabited with deceased for two years prior to death
- Child of the deceased
-Any person treated as a child by the deceased - Any person who was maintained by the deceased immediately before death
What are the grounds to make a claim under the IPFDA?
- Will did not make reasonable financial provision for the applicant
- Distribution of the estate under the intestacy rules fails to make reasonable financial provision for the applicant
What are the standards for financial provisions for grounds under a IPFDA claim?
Surviving Spouse Standard (when spouse has not remarried or divorce occurred within 12 months before death)
Maintenance standard …. look azt this again
What grant should be requested when someone dies partially intestate?
Grant of Probate (executors will apply to the intestacy rules to the rest of the estate)
What is the order of priority for individuals to apply for letters of administration with will annexed?
- Executor
- Trustee of the residuary estate
- Any residuary beneficiary
- PR’s of any of the above
- ## Any other beneficiary or creditor
What is the order of priority for individuals to apply for letters of administration?
- Spouse
- Children of the deceased
- Parents of the deceased
- Brother and sister whole blood
- ## half sibling
What does the grant application require to be sent to the Probate Registry?
- If there is a will, the ORIGINAL will must be delivereed
- relevant IHT forms (IHT400) which have been sent to HMRC will then be sent on to Probate Registry
- Statement of truth from the applicant
- Probate fee
When will a statement of due execution be necessary?
if there are concerns with the validity of the will then a statement of due exectuion by someone who witnessed the will may be necessary
What happens when an executor dies whilst administering the estate of a testator?
Then if the executor has appointed their own executors, this executor can carry on the original administration of the estate, however, if they are PR’s not appoint by the executor who died, this breaks the chain of representation
What happens if a testator has assets that exceed the IHT limit but all assets are all held as joint tenants, does he need a grant?
No, they pass outside the will by survivorship
What can a power of attorney do if one of the executors if incapacitated in regards to the grant application?
The attorney may apply for the grant on their behalf
What are the three main duties of PR’s in administering the estate?
- secure, collect and realise the assets of the estate
- Pay the deceaseds debts and expenses
- distribute the estate according to the rules of the will or intestacy
Are PR’s liable for debts of the deceaseds estate?
PRs are personally liable for debts of the deceased whether they have knowledge of them or not
How can PRs protect themselves from liability for a deceaseds unknown creditors?
s27 Trustee Act
Place a notice in the Gazette for two months
(this does not protect a claim against the beneficiaries)
How can PRs be protected from a claim from a beneficiary whose whereabout are unknown?
Should apply to the court for a Benjamin Order (creates the presumption the person missing pre-deceased the person who has died)
When must inheritance tax be paid to HMRC?
Must be paid before the grant is issued and no later than the end of the sixth month in which the death occurred
Are joint tenancy assets included for the calculation for IHT purposes?
Yes, any property owned beneficially before death is included in the calculation for IHT
- this includes joint tenancies
Where should the money collected by the PRs go to?
a PRs bank account
a law firm client account
When should PRs pay the deceased’s debts?
Have to a duty to pay the debts with due diligence but should normally be paid before the end of the executors year
Which property in a will can be used to pay all estate debts and liabilities?
ALL the deceaseds property can be used to pay debts and liabilties and any clause contrary in a will is void
When is an estate considered solvent?
If there are sufficient assets to pay funeral expenses, testamentary and administration expenses and debts and liabilities
What is the order of items which are used to pay unsecured creditors?
- property not disposed of by will
- residue
- property the will sets aside
- money in the pecuniary legacy fund
- property specifically given
What should PRs consider when selling items to cover expenses?
If beneficiaries want to have a certain legacy
If certain assets go up since in value since the death and therefore will have to pay CGT on the disposal
What are PRs liable to pay on the death of the deceased?
Liable to pay any CGT and Income tax due on the persons death
What allowances are PRs entitled to for estate income?
Only pay basic rate and not entitled to personal allowance
What value does a beneficiary acquire property from will at?
Beneficiary’s acquire the property at the value at probate, not at date of transfer
What happens to the RNRB if the deceaseds share is less than the £175,000?
It is capped at the value of the property
At what value of the total estate the RNRB?
£2,350,000
What is BPR?
Unquoted shares 100%
Quoted shares 50%
BUsiness or interest in business
*must have owned continuously for 2 years immediately prior to transfer
*for spouses it is deemed acquired when the spouse acquired them
What is APR?
Agricultural land and buildings
Farmhouse and COttages: ONLY if they have been occupied for the purpose of agriculture
*owned for two years immediately before transfer
*owned by the transferor and occupied by them throughout seven years prior to transfer
usually 100% relief
