Wills and Administration of Estates Flashcards
What is a succession estate?
Assets capable of passing under a will or by the intestacy rules.
The succession estate passes into the hands of the deceased’s personal representatives, who are legally responsible for administering the estate.
What is a testator?
A person who makes a will.
Explain the difference between testate and intestate?
If the deceased made a valid will they have died “testate”. The terms of the will determine who inherits the succession estate.
If the deceased died without making a valid will he/she has died intestate.
What rules apply when a person dies intestate?
The statutory provisions in the Administration of Estates Act 1925 (AEA) as amended by the Inheritance and Trustees’ Powers Act 2014 (ITPA), referred to as the statutory intestacy rules, apply to determine who inherits the succession estate and what each beneficiary receives.
What is partially intestate?
This occurs where the deceased made a valid will, but the terms of the will do not dispose of all of the succession estate.
In this case, the will is followed but any property that remains indisposed of passses in accordance with the intestacy rules.
This generally occurs as a result of poor will drafting.
What assets are excluded from the succession estate?
- Property held as joint tenants
- Insurance policies written in trust
- Pension benefits
- Statutory nominations
- Donatio mortis causa
- Trusts.Settlements
Explain how those assets which are excluded from the succession estate are distributed.
- Property Held as Beneficial Joint Tenants
- Property Held as Beneficial Joint Tenants
- The property will automatically pass to the remaining joint tenant instantly by way of the law of SURVIVORSHIP.
- However, if the deceased and another were beneficial tenants in common, the deceased’s shares will form part of the succession estate.
Explain how those assets which are excluded from the succession estate are distributed.
- Insurance Policies Written in Trust
- Insurance Policies Written in Trust
- If a policy is written in trust the policy proceeds do not form part of the deceased’s succession estate . Instead, the money is paid directly by the insurance company to the specified beneficiaries
Explain how those assets which are excluded from the succession estate are distributed.
- Discretionary Pension Schemes/Lump Sum Pension Benefits
- Discretionary Pension Schemes/Lump sum pension benefits
The terms of some pension schemes oblige pension fund trustees to pay out a lump sum of money following the death of the person who held the pension. If this amount is payable to the personal representatives, then the money forms part of the deceased’s succession estate.
However, if the deceased nominated a third party to receive this lump sum, the money is paid directly to the named beneficiary.
With some other pension schemes, the pension fund trustees may have discretion to make a lump sum payment following death. The deceased typically indicates during their lifetime, who should receive the money (often in an expression of wish form) if the trustees exercise their discretion to make a payment. In this case, the lump sum paid to the third party does not form part of the succession estate. Instead, it passes to the third party directly.
Explain how those assets which are excluded from the succession estate are distributed.
- Statutory nomination
Its possible to make a statutory nomination in writing to transfer ownership on death of sums of money held in certain friendly society bank accounts.
The nominated beneficiary receives the money and the will or intestacy rules not apply to that account.
Nominations are limited to the sum of £5,0000 and are quite rare in practice.
Explain how those assets which are excluded from the succession estate are distributed.
- Donatio Mortis Causa (DMC)
This is a gift made during the donor’s lifetime in contemplation of and conditional upon the death of the donor.
The donor may recover the asset should he change his mind before death.
The subject matter of a DMC doesnt form part of the succession estate.
Explain how those assets which are excluded from the succession estate are distributed.
- Trusts/Settlements
The distribution of the trust property (other than life insurance polciies) is governed by the deal that created the trust.
What are the intestacy rules? Explain who is entitled to benefit in an intestacy situation from the succession estate and what they will receive.
IF THE DECEASED HAD A SPOUSE (and survived the deceased by at least 28 days)
–> If they did not have any issue (children) the spouse/civil partner receives everything
–>If they did have issue (children):
The spouse/partner receives
- personal chattels
- statutory legacy of up to £250,000
- Half of the remaining succession estate
The issue receives:
- Other half of the remaining succession state on statutory trust
–
