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SQE 1 > Wills and Estates 2 > Flashcards

Wills and Estates 2 Flashcards

1
Q

What are the legal requirement of a testator to make a valid will

A

Testator must be:
-Over 18, married minor or in military service
Have:
- Testamentary Capacity
- Knowledge and approval
- Formal requirements met

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2
Q

What is required for testamentary capacity?

A
  • what they’re doing
  • what they’re disposing of
  • Understand moral claims
  • Have no disorder of the mind that prevents their sense of right or prevents the excise of their natural faculties (testator may be insane and still have testamentary capacity provided the delusion is unconnected with and has no effect on the terms of the will)
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3
Q

When must a testator have testamentary capacity?

A
  • At the time the will is executed.

However will still be valid if:
- Had capacity at the time they gave instruction,
- The will was prepared in accordance to those instructions,
- At the time of the execution the testator understood that they were signing a will for which they had previously given instruction.

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4
Q

What is the golden rule in respect of testamentary capacity?

A
  • If in doubt, get a medical opinion.
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5
Q

If a person wishes to challenge a will on grounds of capacity, what must they do

A
  • Capacity is presumed, therefore,
  • Provide evidence
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6
Q

Can a person who lacks capacity still make a will?

A

Yes - the court can authorise the execution of a will if it is persuaded that:

  • there are grounds to diverge from the existing testamentary position and
  • it is in the best interests of the person to do so.
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7
Q

If the testator had testamentary capacity, is knowledge and approval presumed generally?

A

Yes

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8
Q

When will there be no presumption of knowledge and approval?

A
  • blind and illiterate
  • signed by someone else
  • suspicious circumstances
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9
Q

What happens if part of the will was subject to undue influence?

A
  • That part is invalid, the remainder may be given effect to provided that the omissions do not upset the whole tenor of what remains. But the court cannot add or substitute words.
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10
Q

What is undue influence?

A
  • Testator coerced into making a will, or including particular terms, agaisnst their judgement and contrary to their true intention.
  • Undue influence goes beyond persuasion.
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11
Q

What considerations are taken into account when considering undue influence?

A
  • no presumption of undue influence.
  • Burden of proof lies with the person asserting and the court requires evidence.
  • physical and mental strength of the testator
  • Fairness is not relevant
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12
Q

What are the legal requirements of a Will?

A
  • in writing and
  • signed by the testator, or by some other person in his presence and by his direction.
  • testator intended to give effect to the will; and
  • the signature is made or acknowledged by the testator in the presence of two or more witnesses present at the same time, and
  • each witness attests and signs the will; or acknowledges his signature, in the presence of the testator (but not necessarily in the presence of any other witness)
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13
Q

What is an attestation clause?

A

Describes the circumstances under which the will was executed.

There is no legal obligation to include one.

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14
Q

What if the will contains gifts to an attestor?

A

The gifts will be void under s.15.

BUT: if there are two other witnesses who are not beneficiaries to the Will or Codicil, the effect of s.15 can be disregarded.

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15
Q

What if the will contains gifts to a Spouse of an attestor?

A

If a spouse or beneficiary is an attestator they cannot inherit

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16
Q

Are there any restrictions on who can be appointed as executors.

A
  • A minor, or someone who lacks mental capacity cannot act
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17
Q

How many executors must there be?

A

At least 1 and a maximum of 4 can apply for grant of representation. If more than 4 apply then power is ‘reserved’ to those who do not apply initially to apply later.

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18
Q

What happens is a spouse is executor but they divorce the deceased after the will was made?

A

The appointment will become ineffective.

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19
Q

How many trustees are required to act?

A

At least two

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20
Q

Can executors charge for their time?

A

Only professional executors and trustees may charge for their time.

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21
Q

What happens if a testator dies with more than one will without a revocation clause?

A

The later will revoke the earlier will but only to the extent that it is inconsistent

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22
Q

Are Burial & Funeral wishes binding on the PRs?

A

No

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23
Q

What is the role of the PR

A
  • collect in the deceased’s assets
  • administer the estate
  • Pay the deceased’s debts, administration costs and expenses
  • Distribute the assets to the correct beneficiaries
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24
Q

What happens if the will gifts a specific item which the testator no longer owns at death?

A

The gift adeems (fails to take effect) and the beneficiary receives nothing. Risk is greatest where the will states “my” rather than “a”.

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25
Q

What happens if the will gifts a specific item and its not clear what that item is?

A

The gift may fail for uncertainty. Best to include an alternative.

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26
Q

What happens to property held as joint tenants

A

This property passes outside of the succession estate to the other party.

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27
Q

Are assets held as tenants in common included within the succession estate?

A

Yes, an individual will own a share of an asset held as tenants in common

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28
Q

What is a general legacy?

A

A gift of property which is not distinguished from property of a similar type. e.g.

  • I give ‘a’ Camera = GENERAL
  • I give ‘my’ Camera = SPECIFIC

A general legacy does not normally fail.

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29
Q

Demonstrative Gifts - Will a pecuniary gift fail if it is stated to be made from a specific bank account that has since closed?

A

No, the gift will be paid as a general legacy

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30
Q

What are Residuary legacy?

A

A Gift out of the estate which has not already been disposed under the will or later codicil

31
Q

When gifting the residuary, why is the phrase “and if more than one in equal shares” used?

A

To prevent a partial intestacy if one of the beneficiaries should predecease the testator.

32
Q

Under the general rule, when does the will speak from?

A

Unless a contrary intention is shown, the date of death in respect of identifying the subject matter of a gift.

Words like “my” demonstrate a contrary intention, so the gift will fail if the car owned at the date of the will is not owned at the date of death.

33
Q

What effect does “my” have on a collection that is capable of growing when considering when the will speaks from?

A

The collection will those items included at the date of death notwithstanding the use of “my”.

34
Q

When does the will speak from in terms of people?

A

The date of execution NOT the date of death.

35
Q

In the absence of any express provision, is an individual gift made free of IHT?

A

Yes, IHT is generally taken out of the residue.

36
Q

What expenses do beneficiaries bear in relation to a gift unless specifically stated otherwise?

A
  • Cost of delivery.
  • Expenses of upkeep/preservation from date of death.
37
Q

What is the general rule that applies to property subject to a secured debt / charge?

A

The charge passes with the asset under s.35.

NOTE: a general direction in the will to pay debts and expenses from the residue will no override s.35

38
Q

What if the meaning of a will is ambiguous

A

The court can provide a ruling.

Extrinsic evidence can be provided

39
Q

If a will leaves a gift to a class of beneficiaries, when does the ‘class close’

A

When any member of the class first becomes entitled in possession.

For example “when my children reach 21” would close when the first child reaches 21 after death.

40
Q

What does a Vested gift mean? What about minors?

A

A gift given outright and absolutely with no conditions.

Note: vested gifts to minors still vest even if they are held in trust. This means the gift will be within the minor’s estate.

41
Q

What does a contingent gift mean?

A

Where a beneficiary has to satisfy a condition before they inherit e.g. reach a certain age.

42
Q

What happens if the beneficiary dies before the testator?

A

The gift to them will fail

43
Q

What happens if the beneficiary is the testators own issue and dies before the testator?

A

Section 33 Wills Act states that the gift will be taken as given to the beneficiaries issue in equal shares unless the a contrary intention appears in the will.

Note: Only applies to testators issue.

44
Q

What happens if a charitable gift is given with a general charitable purpose but the charity no longer exists at the date of death?

A

The cy-pres docterine applies and the gift can be given to a different charity with a similar purpose.

45
Q

What jurisdiction can the IPFDA 1975 apply to?

A

Only those domiciled in England and Wales.

46
Q

What categories of beneficiaries can the IPFDA 1975 apply to?

A

SPOUSE
- a spouse
- a former spouse who has not remarried
- a person who cohabited with the deceased as if they were a spouse
CHILDREN
- a child of the deceased
- Any person who is treated by the deceased as a child (step-children)
MISTRESSES
- Any person who was maintained (wholly or partly) by the deceased immediately before their death. (‘maintained’ must be substantial and means cash, not just emotional support)

47
Q

When must an application under IPFDA 1975 be made?

A

no more than 6 months after the date the grant of representation was made.

48
Q

When can the time limits for an application under IPFDA 1975 be extended?

A

The Court has discretion to extend but there must be special reasons. The court should consider:

  • the circumstances surrounding the delay
  • whether negotiations were commenced within the time limit,
  • if the estate had already been distributed before notification of the claim,
  • whether refusal would leave the applicant without recourse against anyone else.
  • applicant must have an arguable case fit to go to trial.
49
Q

Where must an application under IPFDA 1975 be made?

A
  • High Court or County Court
  • Where applying to the high court, Family division for family member, Chancery if complex
50
Q

What property does IPFDA 1975 relate to?

A
  • The succession estate
  • Any property the deceased has a general power of appointment over
  • Any property covered by statutory nomination or donatio mortis causa (less IHT paid by donee)
  • Joint tenancy
  • and property disposed of covered by anti-avoidance provisions.
51
Q

What are the grounds for a IPFDA 1975 application?

A
  • the deceased’s will did not make reasonable financial provision; and/or
  • that the distribution of the estate under intestacy rules fails to make reasonable financial provision
52
Q

When is an order under IPFDA 1975 deemed to take effect?

A

from the date of the deceased’s death - therefore, read back for tax purposes.

53
Q

What is the standard of financial provision for the surviving spouse?

A

Reasonable regardless of maintainance

54
Q

What is the standard of financial provision for ANYONE OTHER than the surviving spouse?

A

“Such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive FOR HIS MAINTAINANCE.”

55
Q

When can the surviving spouse standard in IPFDA 1975 be expanded?

A
  • Former spouse who has not remarried,
  • Divorce etc. occurred within 12 months of the death,
  • No order for financial provision have been made.
56
Q

What are the common guidelines the court must consider when considering the level of maintenance required.

A

The court will have regard to:
- the applicant’s financial resources and needs,
- the financial resources and needs of other applicants
- the financial resources and needs of the beneficiaries
- and obligations of the deceased
- Any disability of the applicant / beneficiaries
- any other matter the court considers relevant.

57
Q

What are the additional guidelines the court must consider when considering the level of maintenance required for the spouse.

A
  • age
  • duration of marriage
  • contribution made
  • what the applicant could have expected in a divorce (but only a consideration - doesn’t mean they will get this).
58
Q

What are the additional guidelines the court must consider when considering the level of maintenance required for cohabities?

A
  • the age and length of cohabitation
  • the contribution made by the cohabitant
59
Q

What are the additional guidelines the court must consider when considering the level of maintenance required for children?

A
  • the manner in which the child was (or might expect to be) educated

If not a child but treated as one:
- how the deceased previously maintained the child,
- whether the deceased knew the applicant was not their child
- the liability of any other person to maintain the applicant

60
Q

What are the additional guidelines the court must consider when considering the level of maintenance required for applicants who aren’t children or spouses?

A
  • the length of time and extent to which the deceased maintained the applicant
  • whether the deceased assumed responsibility for the maintenance

Maintainance required substantial contribution towards the reasonable needs.

61
Q

What are the additional guidelines the court must consider when considering the level of maintenance required for applicants who aren’t children or spouses?

A
  • the length of time and extent to which the deceased maintained the applicant
  • whether the deceased assumed responsibility for the maintenance

Maintainance required substantial contribution towards the reasonable needs.

62
Q

What is the effect of a variation?

A

The gift from the original beneficiary is read back to the date of the deceased’s death and treated for IHT purposes as having been made by the deceased to the new beneficiary.

The beneficiary doesn’t make a PET

IHT is calculated as if the deceased left the property to the new beneficiary

  • same effect for CGT under s.62
63
Q

What are the conditions to make a variation?

A
  • made by original beneficiary in writing (no need for a deed)
  • contains an express statement that s142 should apply
  • within 2 years of death
  • not be made for consideration
64
Q

When can PRs refuse to approve the variation?

A

If the writing back creates an IHT charge and the funds they hold are insufficient to cover the tax.

65
Q

How often can each asset be varied?

A

Once

66
Q

Can a minor / person who lacks mental capacity vary?

A

Yes but needs approval from court

67
Q

When can a variation be made?

A
  • Before or After an inheritance has been accepted.
  • May apply to whole or part
  • Original beneficiaries choice as to who received the variation
68
Q

When can a disclaimer be made?

A
  • only before acceptance
  • only disclaim the whole gift
  • treats the original gift as failed
  • Original beneficiary cannot chose who the gift goes to
  • does not disclaim their rights under intestacy (which may now apply)

-

69
Q

When can a disclaimer be made?

A
  • only before acceptance
  • only disclaim the whole gift
  • treats the original gift as failed
  • Original beneficiary cannot chose who the gift goes to
  • does not disclaim their rights under intestacy (which may now apply)

-

70
Q

What is Precatory Trust?

A

a gift is made to a beneficiary by will with a wish expressed as to how the beneficiary should pass on those assets to others.

71
Q

Are Precatory Trust’s binding on the donee?

A

No

72
Q

What are the IHT rules on Precatory Trusts?

A

If the original beneficiary acts on the wishes within 2 years of death, they are treated as gifts made by the testator’s will.

-NO written election is required, writing back will occure automatically.

73
Q

What are the CGT rules on Precatory Trusts?

A

No special rules, therefore re-distribution is treated as a disposal by the original beneficiary.

74
Q

NEED TO DO PURPOSE TRUSTS

A

SQE 1 (150 decks)

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