Wills and Administration of Estates Flashcards
Assets not included in the succession estate:
- DMCs
- Insurance policies written in trust for someone else
- Interest in discretionary trust
- Statutory nominations
- Property held as joint tenants (including bank accounts)
Statutory order of priority - intestacy rules:
- Issue and spouse
- Parents
- Siblings (whole blood)
- Siblings (half blood)
- Grandparents
- Aunts/uncles (whole)
- Aunts/uncles (half)
- Crown as bona vacantia
Requirements for a DMC?
- Donor makes gift in the belief she is imminently dying
- Makes gift conditional upon death
- Parts with property or something representing it
Statutory legacy for spouses:
£322,000
What does the spouse get on intestacy?
When can the spouse inherit?
What if the spouse wants to continue to live in the matrimonial home?
£322,000 + half residue + chattels
Chattels does NOT include:
- cash/securities
- property used mainly or solely for business purposes
- property held by intestate solely for investment purposes
When?
- inherits after 28 days of surviving the spouse
Matrimonial home:
- spouse has a statutory right to appropriate the matrimonial home in satisfaction of their entitlement
What is the rule in Milroy v Lord? Are there exceptions?
Milroy v Lord - if title has not vested on death then transfer cannot take effect
Exceptons:
1. Re Rose - where D has done everything in their power to effect the transfer
2. Strong v Bird - 3 requirements:
(i) D must have had intention to make an immediate gift
(ii) intention must be continuing up until death
(iii) donee must become executor or PR
3. DMC
Requirements for a valid will (at its most general):
- Testamentary capacity
- Knowledge and approval
- Comply with formalities in s.9 Wills Act
How to determine if a testator has testamentary capacity?
What if someone wants to dispute testamentary capacity - is there a presumption?
Common law test comes from Banks v Goodfellow
- Does T appreciate the nature of the act?
- Does T appreciate the extent of his estate?
- Does T appreciate the moral claims that ought to give give effect to?
- T not suffering from a disorder of the mind
Presumption of testamentary capacity IF will is rational and duly executed
- Someone can rebut if raise sufficient evidence to raise doubt
- Burden on Executor to prove T had testamentary capacity in line with the B v G test
Requirements for T to have requisite knowledge and approval for a valid will?
When will there be NO presumption of K&A?
How to get around this?
T must:
1. Read will
2. Understand it
3. Intend for signature to effect the terms
No presumption when T:
1. blind or illiterate
2. suspicious circumstances
3. signed by someone else on behalf of T
Ways around:
- At time of signing - attestation clause reflecting how was executed
- Affidavit evidence when will submitted to probate detailing how the will was executed
Section 9 formality requirements for a valid will?
- In writing
- Signed by T or signed by someone a T’s direction in his presence
- T intended to give effect - generally shown by signature being at the end of the will
- Signed in the presence of 2 witnesses each of whom either attests or acknowledges - don’t need to be in presence of each other
Order of dispositive clauses/gifts:
- Specific gifts
- General gifts
- Pecuniary gifts
- Residuary gifts
What happens if a type of gift is left in the will e.g. a Sony camera but this does not form part of the estate?
Executors can purchase it and give it to B
When will the class close for inheritance under a will in the event will is silent?
Class closing rules = closes when first B’s interest vests
- if no contingency rule applies then class closes on date of death
Contingent v vested?
Vested interest is not about age - if there are no conditions on B inheriting in the will then will vest immediately
- may still be held on trust if B is under 18 as B cannot give good receipt
Contingent - B’s entitlement is dependent on them satisfying certain conditions e.g. in an intestacy situation, on them attaining the age of 18 - if die before then, does not form part of estate
When does s.33 apply?
S.33 is the substitution clause in wills
- if T leaves a legacy to someone who dies before T, the rules of subsitution mean that this gift can pass down through B’s linear descendants
Initial requirements for someone to bring an IPFDA claim:
- Deceased was resident within jurisdiction
- C falls within a recognised category
- C applies within time limit - 6 months from grant of rep
Categories of applicant under IPFDA?
- Spouse
- Child
- Someone treated as child
- Former spouse not remarried
- Someone living as though spouse with deceased for 2+ years
- Someone maintained by D
Ground for IPFDA claims:
Will does not make reasonable financial provision for them
2 standards:
- Surviving spouse standard = reasonable in all circumstances whether or not it is required for maintenance
- NB, court has discretion to apply this standard where:
(i) former spouse not remarried
(ii) judicially separated within last 12 months
(iii) not received financial provision from ancillary proceedings - Maintenance standard = reasonable in all circumstances for maintenance of C
Guidelines the court MUST follow under s.3 IPFDA:
ALL applicants
- financial position of applicant, Bs and other applicants
- size of D’s estate
- obligations on D
- disability of B
- other relevant factors
Spouse
- how long married
- whether spouse contributed to family
- what spouse might reasonably have expected to receive
Cohabitee
- how long cohabited
- on what basis
Child
- nature of eduction/training
- non-blood treated as child:
- did D know not their child
- on what basis were they maintained
- did D assume responsibility for maintenance
- who else is liable for the child
Other applicants
- how long maintained
- extent responsibility assumed for maintenance
Requirements for successful variation of inheritance?
- In writing
- State that s.142 applies
- Made within 2 years of date of death
- Not made for consideration of money’s worth
What are the differences between the effects of a variation vs disclaimer?
Variation:
1. Can be of whole or part of inheritance
2. Can choose who the inheritance goes to
3. Happens after acceptance of the gift
4. Have to comply with formalities
Disclaimer
1. Cannot accept the gift
2. Must disclaim the whole gift
3. Cannot choose who it goes to
4. Disclaiming the rights under will does not disclaim rights under intestacy
5. Treated as though gift failed
Who is a direct descendant for the purpose of RNRB?
A lineal descendant (child, grandchild) or a spouse of a lineal descendant
What is included in taxable estate which is not included in the succession estate?
- Properties held as joint tenants - deemed severance on DOD
- GROB
- DMCs
- Interest in possession trust before 22 March 2006 - taxed on capital value of interest
- Interest in possession trust after 22 March 2006 - when life T with immediate post death interest dies(cap value not included if trust created during settlor’s lifetime)
How to value the taxable estate:
- Assets valued as at DOD
- ‘Related property’ - e.g. part of a collection owned with spouse, will be valued at proportion of value as a whole collection
- Property co-owned - reduced by 10% to reflect difficulty in selling EXCEPT where owned by spouses
Death rate:
40% UNLESS at east 10% left to charity then reduced to 36%
Value of the marriage exemption:
- £5,000 from a parent to a child
- £2,500 from a grandparent to a grandchild
- £2,500 from spouse to spouse
- £1,000 in any other event