Wills and Estate Administration Revision

Question 1

If a beneficiary has predeceased the testator, the gift to them will lapse

Question 2

If the subject of a general legacy is not in the estate, the beneficiary is entitled to require the executor to purchase it if the estate has sufficient funds

Question 3

An unborn child already conceived when the class closes and subsequently born alive is considered a living beneficiary

Question 4

A life estate ceases on the beneficiary’s death

Question 5

A life estate ceases on the beneficiary’s death

Question 6

Benjamin Order

Answer 6

A court order giving the personal representative (PR) leave to distribute the estate taking into account a possible claim from a person who cannot be found

Question 7

Individuals have six months to make financial provision claims, but there is no such time limit for known creditors

Question 8

A variation allows a beneficiary to change who receives their inheritance. To be effective for tax purposes, a variation must be made in writing, made within two years of death, and not made for monetary consideration

Question 9

Under the 1975 Act a person who was living with the decedent as a partner (such as the man’s long-term partner) during the whole of the two-year period immediately before the decedent’s death is eligible to bring a claim under the Act even if they were not married or civil partners

Question 10

If there are concerns over the validity of a will what should the concerned parties do whilst the will is further investigated?

Answer 10

Lodge a caveat at the Probate Registry

Caveats are valid for up to six months, and if the matter cannot be resolved, it may end up with a judge determining the issue

Question 11

Property specifically gifted in the will should not be used to pay debts unless other assets have been exhausted

Question 12

The inheritance tax threshold is currently £325,000

Question 13

An estate can be excepted if specified transfers do not exceed £150,000 in the seven years before the deceased’s death.

Question 14

A marriage revokes a pre-existing will unless it is clear from the will that: (1) the testator was expecting to marry a particular person, and (2) the testator intended that the will should not be revoked by the marriage.

Question 15

General legacy: if the source of the funds no longer exists or has insufficient funds to meet the legacy, the executor can meet any shortfall from other cash or assets in the estate.

Question 16

Lapse applies when a beneficiary dies before the testator

Question 17

A minimum of two administrators is required when there is a minor beneficiary

Question 18

Parents take an deceased’s estate only when there is no surviving spouse or issue

Question 19

A testator is presumed to have had mental capacity unless someone challenging the validity of the will proves the testator lacked capacity.

Question 20

Merely being elderly is not a basis for assuming a person lacks capacity.

Question 21

PRs are not entitled to charge for services unless it is authorised in some way-either by the court, the will, or the beneficiaries.

Question 22

The court can authorise remuneration for PRs for past, present, or future services.

Question 23

The court can authorise remuneration for PRs for past, present, or future services.

Question 24

A citation to accept or refuse a grant is used to clear off a person with a prior right to any type of grant who has not applied for a grant and shows no intention of doing so.

Question 25

A caveat is used to stop the issue of a grant, rather than force it.

Question 26

To be valid, a will must be in writing and signed by or on behalf of the testator in the presence of two or more witnesses present at the same time who each sign the will in the presence of the testator. The witnesses must sign in the presence of the testator, but they do not have to sign in the presence of each other.

Question 27

When a testator is divorced, the appointment of their former spouse as executor is ineffective, and the former spouse is treated as having died on the date of the divorce for these purposes.

Question 28

The PR power to invest does not include the power to purchase land jointly with anyone else

Question 29

A citation to take probate is used when an executor has lost their right to renounce by intermeddling in the estate but has not applied for a grant and does not intend to do so. Once cited by the Probate Registry, the executor must proceed with an application. If they do not, the citor can apply for a court order allowing the executor to be passed over.

Question 30

A caveat is used to prevent the issue of a grant of representation

Question 31

A grant de bonis non is a second grant made to allow the completion of the administration of the deceased’s estate following the death of the sole or last personal representative.

Question 32

A chain of representation occurs when a sole executor dies and that executor’s executor takes a grant of probate

Question 33

Under section 27 Trustee Act 1925, a personal representative can receive protection from claims by unknown creditors and beneficiaries by advertising the deceased’s death in the London Gazette, a local newspaper, and any other appropriate newspaper. The personal representative must then wait at least two months from the date of the advertisements in order to receive protection.

Question 34

Waiting six months from the issue of the grant of probate protects against claims under the Inheritance (Provision for Family and Dependants) Act 1975, which seek to challenge the estate distribution.

Question 35

When a person dies intestate without a spouse or civil partner, a strict order of entitlement under the intestacy rules applies to determine who will inherit the estate. If there is no living relative who fits into any of the categories listed, the estate passes back to the Crown by a process called ‘bona vacantia’

Question 36

A will is automatically revoked when an individual gets married. So if a new will is not made then before the individual dies then they die intestate

Question 37

The order of entitlement to a grant under rule 22 of the Non-Contentious Probate Rules: a surviving spouse or civil partner is at the top of the list. Next are issue of the decedent, then parents, and then surviving brothers and sisters.

Question 38

Former spouses are eligible to claim under the Inheritance (Provision for Family and Dependants) Act 1975if unmarried but may be barred from a claim under a ‘clean break’ divorce, which is the case here

Question 39

A beneficiary’s right to trace and recover property is lost against a bona fide purchaser

Question 40

A beneficiary can bring a claim against a person who wrongly received estate assets

Question 41

For a will to be valid, the testator must have acted with an intention to make the particular will. A challenger may prove lack of intention by showing the testator made the will as a result of duress (that is, as a consequence of a threat of force), due to fraud, or because of undue influence (that is, something that overpowered the testator’s volition)

Question 42

There is a time limit for bringing a claim under the Inheritance (Provision for Family and Dependants) Act 1975. An application must be made within six months of the issue of the grant of representation to the personal representatives.

Question 43

A new will impliedly revokes the existing will, but only to the extent that it is inconsistent with the existing will. Therefore, executing a new will is not a definite way to achieve full revocation unless the new will contains an express statement that it revokes all earlier wills.

Question 44

Any money held in a joint bank account with a spouse passes solely to the spouse under the right of survivorship.

Question 45

When a will leaves a gift to each member of a class who meets a condition, the class closes on the date of the testator’s death and includes only beneficiaries who were living on that date.

Question 46

A witness also being a beneficiary does not invalidate the will. Instead, any gifts to the witness-beneficiary will fail

Question 47

To be excepted, the estate’s total gross value plus specified transfers cannot exceed either (1) the inheritance tax threshold, currently £325,000, or (2) £3 million if the net chargeable estate does not exceed the threshold.

Question 48

An estate can be excepted if specified transfers do not exceed £150,000 in the seven years before the deceased’s death.

Question 49

Undue influence must be proved by the person alleging undue influence by showing that the testator surrendered to intolerable pressure

Question 50

Knowledge and approval must be shown by the person seeking to enforce the will when there are suspicious circumstances

Question 51

Without an attestation clause evidence may be required to prove the will was properly executed

Question 52

Demonstrative legacy

Answer 52

A gift of cash which is directed to be paid from a specified fund or pool

Question 53

Pecuniary legacy

Answer 53

A gift of cash

Question 54

If a specific legacy fails, the item concerned passes as part of the residue of the estate

Question 55

Only those in a marriage or civil partnership with each other, not cohabitants, can be surviving spouses for the purpose of intestacy rules

Question 56

A life assurance policy written in trust for the insured’s children passes outside the insured’s will or intestacy and is not subject to inheritance tax on their death

Question 57

A life assurance policy written in trust for the insured’s children passes outside the insured’s will or intestacy and is not subject to inheritance tax on their death

Question 58

There is nothing to prevent a beneficiary from being an executor

Question 59

Types of grant of representation

Answer 59

1. Probate: the deceased left a valid will appointing an executor who is willing to act as PR
2. Letters of administration with will annexed: the deceased left a valid will, but there is no executor willing or able to act as PR
3. Letters of administration: the deceased did not leave a will

Question 60

When a will appoints no executor and leaves a share in the estate to a minor under 18 or a life interest arises at least two administrators must be appointed

Question 61

Clearing off

Answer 61

When a residuary beneficiary applying for a grant of letters of administration with will annexed must explain why there is no executor applying for probate

Question 62

If the deceased held an asset in a name differing from that in their will one grant will be issued, indicating both names, which must be explained on the PA1 form

Question 63

If there is no attestation clause, a witness or other person present when the will was executed must provide an affidavit of due execution

Question 64

What is the appropriate process for a beneficiary to follow if they believe that the will may be invalid due to a lack of mental capacity on the part of the testator?

Answer 64

Caveat

Question 65

When an executor has intermeddled in the estate but has not applied for a grant and does not intend to do so, an interested party may ask the Probate Registry to issue a citation to take probate

Question 66

When an executor has intermeddled in the estate but has not applied for a grant and does not intend to do so, an interested party may ask the Probate Registry to issue a citation to take probate

Question 67

If the PRs advance capital to a beneficiary before they are entitled to it under the will or intestacy, and the beneficiary dies before satisfying the age contingency, does their estate have to repay the amount of the advance?

Answer 67

No

Question 68

How long should PRs delay distributing the entire estate if they are worried about a possible claim against the estate under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 68

6 months from the date of grant

Question 69

To be effective for inheritance tax and capital gains tax purposes, both a variation and a disclaimer should be made within 2 years from the date of death

Question 70

An assent by the PRs vests the legal title to the asset in the beneficiary

Question 71

A PR is also a beneficiary of a specific legacy. Does the PR have to assent to themself to vest the legal title in themself?

Answer 71

Yes

Question 72

A beneficiary does not have a legal or equitable interest in the estate assets before administration of the estate is completed, they only have a right to have the estate properly administered

Question 73

What is the time limit for bringing a claim under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 73

6 months from the date of the grant, or later with the leave of the court

Question 74

Can an ex-spouse of the deceased bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 74

Yes, provided they have not remarried and there is no agreement preventing a claim such as a term of a clean break divorce

Question 75

A cohabitant can bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975if they were living with the deceased as a spouse, civil partner, or same-sex partner for the whole of the 2-year period before the death

Question 76

The standard of reasonable financial provision for a spouse applicant Inheritance (Provision for Family and Dependants) Act 1975 is what would be reasonable in all the circumstances, whether or not required for their maintenance

Question 77

When there is more than one person of equal rank entitled to administer an estate but one has a vested interest and one has a contingent interest in the estate, the court generally prefers an application by the vested interest beneficiary

Question 78

Under rule 20 NCPR, the beneficiaries have the best entitlement to act as administrators when an executor has not been named or unable or unwilling to act

Question 79

The executors have the power of appropriation. This means that they can use an alternative asset to satisfy a legacy or interest in the estate, provided no specific beneficiary is affected. However, unless the will provides otherwise, it is not permissible for a PR to make an appropriation in their own favour to satisfy a pecuniary legacy with an asset other than cash or the equivalent of cash, such as government stocks or quoted shares. The power of appropriation does apply to beneficiaries who are also executors but subject to this limitation.

Question 80

If a beneficiary has predeceased the testator, the gift to them will lapse (fail)

Question 81

If a testator makes a gift to a child or other issue who die before the testator and leave living issue, the living issue receive the gift.

Question 82

Even if an executor is deceased anyone applying to obtain a grant of representation will have to clear off the deceased executor and explain why they are not applying

Question 83

The order of entitlement to a grant of letters of administration with will annexed is set out in rule 20 of the Non-Contentious Probate Rules (‘NCPR’). Under this rule, the residuary beneficiary, will have the best entitlement to a grant of representation.

Question 84

Personal representatives have a variety of powers to support the administration of an estate. The personal representatives generally have no authority to carry on the deceased’s sole trade, but they can do so in order to sell the business as a going concern

Question 85

Solicitors should obtain medical evidence and advice on a client’s mental capacity if there are concerns about capacity

Question 86

An executor has discretion to advance the sum held (the capital) to the beneficiary even though if they have a contingent interest

Question 87

A class gift is a gift of property to be divided among beneficiaries who fulfil a general description. Class closing rules apply to determine how and when a class gift should be distributed. Generally, a class closes-to the exclusion of any potential beneficiary not then living-when at least one beneficiary has a vested interest. When there is a contingent gift, the class closes at the date of the testator’s death if there is any living beneficiary who has met the condition. If there is no beneficiary who meets the condition, the class remains open until the first beneficiary does.

Question 88

When the deceased is survived by a spouse or civil partner and issue, the spouse or civil partner will receive personal chattels, £270,000, and one-half of the residue. The deceased’s issue will take the other half of the residue. However, a surviving spouse can require the personal representatives to appropriate the family home to the spouse in partial or total satisfaction of their interest. If the property is worth more than the spouse’s entitlement, the spouse can still require appropriation provided they pay over the difference-known as equality money-to the estate.

Question 89

The executor has a wide discretion about whether to advance capital, and the beneficiary is not required to demonstrate a need for

Question 90

The executor has discretion to advance sums held (the capital) to the beneficiaries even if their interest is contingent

Question 91

Shares can be sold to raise funds for IHT payment owed prior to grant of representation

Question 92

Life assurance proceeds are payable to the estate, the insurance company may pay this sum directly to HMRC for the payment of IHT prior to grant of representation

Question 93

When a person dies intestate without a spouse or civil partner, the strict order of entitlement under the intestacy rules applies to determine who will inherit the estate. If a person in the category of issue has died before the deceased, the person’s issue take their parent’s share per stirpes, provided the issue attain age 18 or marry earlier.

Question 94

Employee will receive only £800 as a preferred debt payment and any remaining money owed is classified as ordinary debt

Question 95

A secured debt, such as the mortgage on the rental property, should be paid from the asset against which it is secured.

Question 96

Unsecured debts should be paid from the residuary estate, rather than from specific legacies

Question 97

Property specifically gifted in the will should not be used to pay debts unless other assets have been exhausted

Question 98

A minimum of two administrators is required when there is a minor beneficiary

Question 99

The rules of intestate succession apply when a person dies without a will. Under these rules, when the deceased is survived by a spouse or civil partner, the spouse or civil partner will receive personal chattels, £270,000, and one-half of the residue. The deceased’s issue will take the other half of the residue.

Question 100

A Benjamin Order is a court order giving the personal representative leave to distribute the estate, taking into account the interests of a known claimant who cannot be found. It is the only way for the executor to gain full protection from a future claim by a known beneficiary

Question 101

Waiting six months protects against claims under the Inheritance (Provision for Family and Dependants) Act 1975, which seek to challenge the estate distribution under the will.

Question 102

Under section 27 Trustee Act 1925, an executor can receive protection from claims by unknown creditors by advertising the decedent’s death in the London Gazette, a local newspaper, and any other appropriate newspaper. They then must wait at least two months from the date of the advertisements before distributing the estate.

Question 103

Personal representatives have the power to sell and lease estate property.

Question 104

Personal representatives have a variety of powers to support the administration of an estate. The personal representatives generally have no authority to carry on the deceased’s sole trade, but they can do so in order to sell the business as a going concern

Question 105

When the sole executor of an estate dies and that executor’s executor takes a grant of probate for the deceased executor’s estate, the executor automatically becomes the executor of the original estate. This is known as a chain of representation.

Question 106

No presumption of undue influence applies to wills-undue influence is something that must be proved

Question 107

To be valid, a will must be in writing and signed by or on behalf of the testator in the presence of two or more witnesses present at the same time who each sign the will in the presence of the testator. It is possible for another person to sign on behalf of the testator if they are blind or illiterate. However, the testator must be present, and the will should be read to them before the will is signed on their behalf.

Question 108

If a beneficiary has predeceased the testator, the gift to them will lapse

Question 109

A gift to two or more people as joint tenants will not lapse unless all the recipients die before the testator. If one joint tenant dies, the surviving joint tenants are entitled to the entire gift.

For example, if a gift of shares were left to two sisters jointly but one sister died before the testator, the entire gift would go to the surviving sister

Question 110

When a spouse died intestate, the spouse or civil partner of the deceased is entitled to a statutory legacy.

Question 111

A variation allows a beneficiary to change who receives their inheritance. To be effective for tax purposes, a variation must be made in writing, made within 2 years of death, and not made for monetary consideration. A verbal variation is not effective.

Question 112

When a gift is to two or more people “in equal shares”, the death of one of the beneficiaries will not entitle the surviving beneficiary to receive the share of the deceased beneficiary. Therefore, the other half of the shares will lapse and fall into the residue

Question 113

The basic rule of succession is that a will speaks from the date of death unless a contrary intention is apparent in the will. However, this basic rule will not apply if a contrary intention is apparent in the will. When a testator makes a gift of “my shares”, they are normally taken to have shown an intention contrary to the basic rule. Instead, the testator intended for the beneficiary to receive the property as it was on the day of the will’s execution and not on the day of the testator’s death. Therefore, if the property has been sold then the gift will fail.

Question 114

Everyone aged at least 18 has legal capacity to make a will

Question 115

Writing “revoked” across a will is not sufficient to constitute destruction of the will

Question 116

When a commercial building is sold to the buyer and is less than 3 years old it is deemed a standard-rated supply for VAT purposes

Question 117

When property is held for a minor beneficiary, PRs may apply the income for the maintenance, education, or benefit of the minor. Otherwise, the PRs must accumulate the income. Once the beneficiary turns 18, ongoing income must be paid to them until their contingent interest is satisfied.