Wills And Intestacy

Question 1

What makes a will valid (6)

Answer 1

• Must be 18+
• Sound mind
• Under no pressure
• In writing
• Signed by person making will
• In presence of 2 independent witnesses (attestation)

Question 2

What are Intestacy rules

Answer 2

• Spouse (civil partner)- entitled to absolutely everything
• Spouse + Children = Spouse personal chattels, £250k and 50% remaining estate absolute
  Children take remaining 50%. 18< held in trust til 18 or marry before then
• No spouse - Any children (whole estate)
  No children > Grandchildren > parents> brothers and sisters (full blood then half
  Blood) > Grandparents>uncles and aunts
• No relatives = Crown

Question 3

Deed of Variation (9)
What is it

What are the important points

Answer 3

• Beneficiaries 18+
• Deed must refer to will (could be Intestacy)
• Signed by all who benefit but now lose out
• Within 2 years
• Statement must be signed by all those making variation and explain for IHT
• If IHT is increased, must be signed by personal representatives
• PR can only refuse to sign if they do not have funds to pay the increased IHT bill
• No consideration for money or moneys worth

Question 4

How do you revoke a will (3)

In order to revoke a will voluntarily (3)

Divorce (3)

Answer 4

Will can be revoked by:

• Destroy old will
• Make a new will and specifically revoke old will
• Marriage (Civil partnership)generally revoke will (unless in anticipation of marriage)

To revoke a will:

• Must have mental capacity
• Must have intention to revoke
• must effect the revocation by physical destruction or via a formal document

Divorce cancels a spouse as executor
Divorce cancels entitlement of a spouse
Divorce doesn’t invalidate rest of will

Question 5

What is a Deed of Disclaimer

Answer 5

• Inherits but doesn’t want to accept
• Disclaimed in 2 years (writing)
• Consideration for money or money’s worth
• Back to estate, shared by beneficiaries
• must contain statement that to have effect for IHT

Question 6

What duties does an Executor perform

Answer 6

• Collect debts
• Pay taxes
• Proves will with Probate Office
• Distributes assets
• Send HMRC report ( Lists assets, gifts)

Question 7

Why have a will

Answer 7

• laws of Intestacy -may not reflect wishes
• ## may not be tax efficient

Question 8

Taxation of estate of a deceased person

Answer 8

• Personal representatives are responsible for paying
• income tax charged on any income received up to date of death
• usual allowances apply(not reduced if dies part way through year)
• Income after death is charged at basic rate with no PA/DA/PSA
• CGT on any gains made during Damion period charged at 20% or 28%
• Only on post death gains
• PRs deemed to receive assets at market value at death
• AEA available for year of death and two further years
• IHT any excess charged at 40% (unless charity- 36%)