Wills: Administrative Provisions Flashcards
List the trustee/PR powers which should be included in all wills.
1) power to change;
2) Extended power to appropriate assets without the consent of legatee;
3) Power to insure assets;
4) Power to accept receipts from or on behalf of minors;
5) Self-dealing
Explain the power to change.
Must be included in all wills.
It allows the executors and trustees to change he remuneration. under the will if appropriate.
This can either be included as part of the appointment Claude, or with the other admin provisions.
The clause needs to be clear as to whether a person engaged in any profession or business can charge for time spent on the administration (eg a doctor) or whether only people whose profession involves ministering estates can do so (eg solicitors and accountants).
Explain the extended power to appropriate assets without the consent of the legatee.
s41 AEA 1925 gives PRs power to appropriate any assets in the estate in or towards satisfaction of any legacy of interest in residue, provided the appropriation does not prejudice any beneficiary of a specific legacy.
So if will gives a pecuniary legacy to a beneficiary, PRs may allow beneficiary to take chattels or other assets in the estate up to the value of their legacy, provided these assets are not specifically bequeathed.
The legatee to whom assets are appropriated (or parent or guardian if they are a minor) must consent to the appropriation.
The statutory provision usually requiring the consent of the legatee is often removed (although PRs would seek their permission informally).
Explain the power to insure assets.
PRs have duty to preserve the value of estate.
they therefore have statuary power to insure assets against all risks up to the full value of the property, and to pay premiums out of income or capital.
It is not necessary to amend the statuary provision, but it is easier if this provision is expressly included in the will.
Explain the power to accept receipts from or on behalf of minors.
Infant’s cannot give good receipt for legacy or share of an estate, but parents or guardians can on their behalf.
If the testator has an issue with someone else accepting the gift on behalf of the child, will should include a provision that the trustees hold the legacy for the benefit of the minor. Alternatively, a clause may allow the PRs to accept receipt for the child if the child is over 16 years old.
Explain the power of self-dealing.
IF executors/ trustees are beneficiaries as well, the will should include a power to allow self-dealing.
Under trust law, trustees cannot enter into any transaction where their duties conflict with personal interest. An express provision in the will allowing this removes this issue.
List the powers which should be included where there are trustees (eg where there is a trust in the will because there is a substitutional gift to children of a primary beneficiary).
1) Power to appropriate assets;
2) Power to invest;
3) Power to purchase land;
4) Power to sell personality;
5) Power to use capital for advancement of beneficiaries.
6) Control of the trustees by the beneficiaries.
7) Trusts of land
Explain why the power to appropriate assets needs to be expressly included in the will where the will includes trust provisions.
Trustees do not have the automatic statuary power to appropriate assets like executors do. As such, this needs to be expressly included, allowing them to appropriate trust property towards beneficial interests arising under the trust (without obtaining consent from the beneficiary).
Explain the power to invest and why this needs to be expressly included in wills containing trust provisions.
Trustees have a duty to invest trust money under general law (s3 TA 2000 gives them general power of investment - enabling then to invest as if they were absolutely entitled to the trust property themselves). trustees are meant to take proper advice when doing so and have a duty to ongoing maintenance of the investments.
This can be expressly included in a will if necessary given the context of the trust property.
Can trustees delegate their powers of investment to IFAs (etc) under the TA 2000?
Yes, the act permits delegation.
Trustee must appoint the delegate in writing and give them a written policy document setting out investment objectives and restrictions on the choice of investments. They also must review the delegates work and policy statement from time to time.
Explain the power to purchase land and why this may need to be expressly included in a will.
TA 2000 (s8) gives trustees power to acquire freehold or leasehold land in the UK for investment or occupation but a beneficiary for any other reason. The act also gives trustees al power of the absolute owner of the land.
However this does not allow them to purchase land abroad, or to purchase land jointly with someone else in their capacity as a trustee. An express power will need to be included in a will for the trustees to have such a power.
Explain the power to sell personalty and why a provision allowing trustees to do this may be required in the will.
Trustees holding land in their trust have the power to sell it, but there is doubt whether this applies to property.
As such, wills should include this provision if testator wishes trustees to have this power.
Explain the power to use income for maintenance of beneficiaries and whether this needs to be included as an express provision in the will.
Trustees can in some circumstances use trust money for a beneficiary before they are entitled, for reasons such as university fees or funding a despite on a property. his can only be done if the beneficiary has an interest in the trust capital. This is given as an absolute discretion to the trustees under s32.
As such, it is common for the life trust provision in a will to extend s32 to allow the trustees to make advancements of capital to the life tenant.
Explain the provision in a will which may be included to prevent trustees from changing the trustees of the trust fund.
s19 TLATA 1996 allows beneficiaries who are all over 18 to direct the current trustees to retire and appoint new trustees (an extension of their power to bring the trust to an end).
In a will, a provision can expressly exclude this power to prevent the beneficiaries from doing so.
Explain how the provisions in the will may amend the TLATA 1996 special powers given the a beneficiary under a trust of land who has an interest in possession.
If under the terms of a will, trust for land with an interest in possession would arise, the will may amend the statuary powers to prevent beneficiaries from becoming immediately entitled to the income as it arises.
