Wills and the Administration of Estates Flashcards
What are the 2 key questions on death?
1) Do any assets pass independently outside the will?
2) Did the deceased leave a will and if so, is it valid?
N.B. Any property not disposed of in the above (or in case of an invalid will) is distributed according to intestacy rules.
List property that passes outside of the will?
- Joint property; where held as beneficial joint tenants, rule of survivorship applies.
- Insurance policies;
Where a person takes out a simple policy of life assurance, the benefit of that policy belongs to them. On death, the policy matures and the insurance company will pay proceeds to the deceased’s PRs who distribute the money according to terms of a will or intestacy rules.
If a policy is written in trust for benefit of specified individuals or transferred/assigned away, the proceeds will be paid to the named beneficiaries.
- Pension benefits; lump sum calculated is paid by trustees of pension fund to members of the family or dependants chosen at trustees’ discretion.
- Trust property; any equitable interest the deceased may have had as beneficiary of a trust will end on their death, and trust property will devolve according to its terms.
What is the person making a will called?
Testator (testatrix if female).
List some common clauses in wills?
- Revocation clauses (make clear that earlier wills are of no effect).
- Direction as to disposal of the body (no legal effect but ensure family are aware of testator’s wishes).
- Appointment of executors.
- Gifts.
What is the role of an executor/executrix?
To collect in all the testator’s assets, pay the deceased’s debts and any IHT, and then distribute the remaining assets to whoever is entitled under the will.
Executor makes application to HMCTS after testator’s death for a grant of probate which confirms that the will is valid and the executor has authority to act.
What are the different types of gifts?
- Specific gift (item testator owns and distinguishes from rest of their assets).
- General gift (item/items corresponding to a description). If the testator does own the item(s) at death, the executors must obtain the item(s) using funds obtained from the estate.
- Demonstrative gift (general in nature but directed to be paid from a specific fund e.g. ‘I give £300 to X to be paid from my Barclays savings account’).
- Pecuniary gift (money).
- Residuary gift (remainder - all the money and property left after the testator’s debts, expenses and other gifts have been paid). Usually most substantial gift in the will.
What 3 requirements must be met in order to create a valid will?
1) Capacity
2) Intention
3) Formalities (s9 Wills Act 1837).
N.B. A failure to meet any one requirement invalidates the will.
Explain the ‘capacity’ requirement?
- Individual must be 18+ and have testamentary capacity. This means they must understand the nature of their act and its broad effects (making a will which will have effect on their death), the extent of their property (no need to recollect every individual item), and moral claims they ought to consider (even if they reject these and decide to give to other beneficiaries).
- General rule; testators must have capacity at the time they execute their wills.
What is the exception to the general rule on ‘capacity’?
A will can still be valid if the testator has capacity when they give instructions for the will, even if they lose it by execution, provided that instructions were given to a solicitor who prepared the will according to these instructions, and at the time the testator executes the will, they appreciate that they are signing a will based on previous instructions.
Can a will be made for a testator who is mentally incapable of making one?
Yes - a ‘statutory will’ may be made on their behalf under the MCA.
What should solicitors do if they doubt the testator’s capacity?
Seek a medical report from a practitioner confirming the testator’s capacity, and keep the written evidence in case of future challenges.
N.B. Medical report and/or will prepared by independent solicitor who met and explained will to testator make it difficult for challenger to prove lack of capacity.
When can executors rely on a presumption that the testator satisfied the mental capacity test?
If the will is rational on its face and the testator showed no evidence of mental confusion before making the will.
Explain the ‘intention’ requirement?
- When the will is signed, the testator must have knowledge and approval of its contents.
N.B. A testator with capacity who has read and executed the will is presumed to have the requisite knowledge and approval.
In what situations will the presumption of knowledge and approval not apply?
- Testator blind/illiterate/not signing personally (HMCTS will require evidence such as a statement at the end confirming the testator knew and approved of its contents, or that it was read over to them to prove knowledge and approval).
- Suspicious circumstances e.g. will prepared by major beneficiary (executor or person putting forward the will must remove suspicion by proving that the testator did actually know and approve the will’s contents - heavy burden to discharge).
What must a person seeking to challenge a will (or any part of it) prove to prevent it all (or any part of it) from being admitted to probate?
- Force or fear (through actual or threatened injury).
- Fraud (misled by some pretence).
- Undue influence (coercion/duress).
- Mistake (any words included without the knowledge and approval of the testator will be omitted from probate).
How likely is it for undue influence to be made out when challenging a will?
Unlikely due to required proof of coercion or duress that will need evidence from friends, family and carers etc.
N.B. A claimant who fails to substantiate their claim will be penalised in costs.
What are the formality requirements under s9 Wills Act 1837?
- Will must be in writing.
- Will must be signed by the testator, or another person in his presence and testator’s direction.
- Testator must intend by his signature to give effect to the will.
- The signature must be witnessed.
Explain the two stages to the process of witnessing a will?
1) Testator’s signature must be made or acknowledged in the presence of 2 witnesses (at the same time to prevent fraud).
2) The witnesses must sign the will in the presence of the testator (but not necessarily each other).
N.B. ‘Presence’ requires mental and physical presence (witnesses must be aware that testator is signing a document, but need not know it is a will, and must be able to see the testator signing).
N.B. Acknowledging signatures is an alternative if the witnesses were not present at the signing stage.
What happens if either of the witnesses to the signature is a beneficiary under the will or a spouse/civil partner of a beneficiary?
The will remains valid but the gift to the witness or to the witness’s spouse/civil partner fails.
What is the 1 exception to the rule that wills must comply with the requirements of s9 formalities?
Privileged wills - those made on actual military service or by a mariner or seaman at sea. These may be made in any form, including a mere oral statement.
When does the presumption of due execution arise?
If the will includes an attestation clause (e.g. signed in our joint presence and then by us in hers) reciting that the s9 formalities were observed.
If the will does not contain an attestation clause, HMCTS will require an affidavit of due execution (or witness statement verified by a statement of truth) from a witness or any other person present during the execution.
List some of the solicitor duties when preparing wills?
- Explain to clients how to sign and witness the will.
- Warn that beneficiaries and those married to beneficiaries should not be witnesses.
- Advise that preferable to execute at solicitors office to ensure s9 formalities are complied with.
N.B. Failure to carry out these duties may lead to liability in negligence.
In what 3 situations do the intestacy rules (contained in AEA 1925) automatically operate in?
1) Where there is no will either because the deceased never made one, or all wills have been successfully revoked (total intestacy).
2) Where there is a will, but it is invalid or is valid but fails to dispose of any of the deceased’s estate (total intestacy).
3) Where there is a valid will, but it fails to dispose of all the deceased’s estate (partial intestacy; rules only apply to that part of the estate not disposed of by will).
Explain the concept of the statutory trust in relation to intestacy?
The intestacy rules impose a trust over all the property in respect of which a person dies intestate. That property is held on trust by PRs who manage distribution and;
- Pay funeral, testamentary and administration expenses (inc legal fees and taxes),
- Settle any debts of the deceased.
- Sell assets if necessary to raise funds for payments.
- Distribute residuary estate.
N.B. PRs can sell assets but are not required to sell the residuary estate.
Who primarily benefits under rules of distribution?
Family (excludes unmarried partners, no matter how long the relationship).
What is the meaning of spouse/civil partner for the purposes of distribution rules?
The person the deceased was legally married to at the time of their death.
N.B. A former spouse is excluded from the definition but only from the point when the divorce is actually finalised and the marriage has legally ended.
N.B. A party to a void marriage is not a spouse for the purposes of intestacy rules.
What is the meaning of ‘issue’ for the purposes of distribution rules?
Includes all direct descendants of the deceased (children, grandchildren etc).
N.B. Adopted children are included but step-children are NOT an issue of the deceased unless adopted.
How do the distribution rules work where there is a surviving spouse/civil partner and issue?
The spouse receives;
- Personal chattels absolutely.
- The statutory legacy of £322,000 (or all of it if less than this).
- Half of the remainder of the residuary estate (other half passes to issue on statutory trusts).
What happens if the intestate’s spouse/civil partner dies within 28 days of the intestate?
The estate is distributed as if the spouse/civil partner has predeceased the intestate.
What are the interests of the children contingent upon?
Reaching 18 or marrying/forming a civil partnership before 18.
What happens if a child predeceases the intestate?
Their children (intestate’s grandchildren) who are living at the intestate’s death take their deceased parent’s share equally between them, contingent upon reaching 18 or marrying/forming civil partnership before 18.
What happens if any children or issue survive the intestate but die without gaining a vested interest?
They may be substituted by their own issue (if the issue is living at the intestate’s death).
How do the distribution rules work where there is a surviving spouse/civil partner, but no issue?
The spouse/civil partner receive the entire estate absolutely.
How do the distribution rules work where there is no surviving spouse/civil partner?
Between the intestate’s relatives in the highest category (all or nothing) in the list below;
- Issue on the ‘statutory trusts’ (but if none),
- Parents, equally if both alive (but if none),
- Brothers and sisters of the whole blood on the ‘statutory trusts’ (but if none),
- Brothers and sisters of the half blood on the ‘statutory trusts’ (but if none),
- Grandparents, equally if more than 1 (but if none),
- Uncles and aunts of the whole blood on the ‘statutory trusts’ (but if none),
- Uncles and aunts of the half blood on the ‘statutory trusts’ (but if none),
- The Crown (bona vacantia, rare).
How are adopted children treated for the purposes of intestacy rules?
As the children of their adoptive parents, not their natural parents.
How is entitlement under the terms of the will established?
By considering the actual wording used in the will, what property the testator owned, who the people named or described in the will are and whether they have survived the testator.
What is the difference between executors and administrators?
Executors are those people dealing with the estate as appointed by the will.
Administrators are those people dealing with the estate where there was no appointment in the will.
What 2 basic presumptions are applied when interpreting a will to try and establish the testator’s intentions?
1) Non-technical words bear their ordinary meaning.
2) Technical words are given their technical meaning.
When can these 2 basic presumptions be rebutted?
If from the will (and any admissible extrinsic evidence) it is clear that the testator was using the word in a different sense.
What is the basic rule regarding establishing the testator’s intention?
Court are not prepared to consider other evidence to try and establish what the testator intended. If the meaning remains unclear, gift will fail for uncertainty.
Under what limited circumstances may the court look at external or extrinsic evidence in order to help ascertain the testator’s intentions?
Under s21 Administration of Justice Act 1982 to interpret the will;
- Insofar as any part of the will is meaningless.
- The language used is ambiguous, or
- Evidence shows that the language is ambiguous in light of the surrounding circumstances.
E.g. Evidence of declarations made by the deceased.
When does the court’s narrow power to rectify a will arise?
Under s20 Administration of Justice Act 1982. Where the testator’s intentions are clear, but the wording of the will does not carry them into effect.
The failure must have one of two causes;
1) Either in consequence of a clerical error (writing or omitting something by mistake), or
2) In consequence of a failure to understand instructions.
N.B. Very narrowly applied.
What happens once the meaning of the wording of the will has been established?
PRs (executors or administrators) need to give effect to them.
Will is said to ‘speak from the date of death’ so interpreted as if it had been executed immediately before death unless a contrary intention appears in the will (e.g. ‘house which I NOW own’).
When identifying beneficiaries, when is the will said to speak from?
The date of execution, unless contrary intention appears in the will.
This makes it important that you satisfy description at the time the will was executed. (E.g. a gift made to X’s ‘eldest daughter’ will not switch to the middle if the eldest daughter predeceases the testator).
For family relationships, what are gifts to a class of beneficiaries taken to mean?
Blood relationships unless will provides otherwise.
N.B. E.g. ‘Issue’ may be interpreted to include testator’s step-children.
How are adopted children treated for the purpose of gifts under will?
As children of the adoptive parents, unless the will provides otherwise.
How is an individual who has obtained a full gender recognition certificate legally recognised under the Gender Recognition Act 2004?
In their acquired gender for wills made after 4/4/2005.
What is the basic effect of a gift made in a will failing?
The subject matter falls into the residuary estate and will be taken by the residuary beneficiary.
N.B. Where a gift of residue fails, there will be a partial intestacy and the residuary estate will pass under the intestacy rules.
List some reasons that may cause a gift in a will to fail?
- Uncertainty.
- Beneficiary or their spouse/civil partner witnesses will.
- Divorce/dissolution.
- Ademption.
- Lapse.
- Disclaimer.
- Forfeiture.
How can a gift in a will fail for uncertainty?
If it is not possible from the will’s wording to identify the subject matter of the gift or recipient, the gift will fail.
N.B. Exception = gift to charity which does not sufficiently identify the charity. Provided it is clear that the gift is exclusively for charitable purposes, the court can direct which charity it is to benefit.
Will a gift fail if there is a codicil which confirms the original will and which is not witnessed by the beneficiary (or their spouse/civil partner)?
No.
What is the effect of divorce/dissolution on a gift in a will?
Any property will pass as if the former spouse or civil partner had died on the date of the dissolution or annulment of the marriage or civil partnership.
How can a gift in a will fail for ademption?
A specific legacy will fail if the testator no longer owns that property at death (usually occurs when property sold, destroyed or given away during the testator’s lifetime).
Where an asset has been retained but has changed its nature since the will was made, only if there has been a change in substance will the gift be adeemed.
If the property is capable of increase or decrease e.g. ‘my shares, my jewellery,’ the testator will normally be taken to have made a gift of any items satisfying the description at death.
How can a gift in a will fail for lapse?
A gift in a will fails or ‘lapses’ if beneficiary dies before the testator.
If a legacy lapses, the property falls into residue unless the testator has provided for the possibility of lapse by including a substitutional gift.
If a gift of residue lapses, the property passes under intestacy rules unless the testator has included a substitutional gift in the will.
Where no conditions to the contrary are imposed in the will, a gift vests on the testator’s death.
What happens if the deaths of the testator and beneficiary occur close together? (S184 LPA 1925)
Vital to establish who died first; if this cannot be proved, LPA provides that the elder of the 2 is deemed to have died first.
If the testator was older than beneficiary, the gift takes effect and property passes as part of beneficiary’s estate.
What happens if beneficiary fails to satisfy the survivorship clause (28 days)?
The gift fails.
How can a gift to more than one person lapse?
If all the donees die before the testator.
N.B. Exception = gifts to the testator’s children or descendants do not lapse if the beneficiary dies before the testator but has surviving issue. The gift passes to the deceased beneficiary’s issue, unless the will shows a contrary intention.
How can a gift in a will fail for disclaimer?
A beneficiary can reject a gift, and is treated as having predeceased the testator which allows the beneficiary’s issue to replace them.
How can a gift in a will fail for forfeiture?
A person should not benefit from the estate of a person they have unlawfully killed.
The killer will be treated as if she predeceased the victim so estate will pass to son.
What is the significance of a codicil?
It republishes the will as at the date of the codicil.
What is revocation and what is its effect?
The formal act of cancelling or withdrawing a will, with the effect of nullifying the will, either as a whole or in part.
N.B. A revocation clause indicates that all earlier wills and codicils are expressly revoked.
When is a testator free to revoke their will?
At any time provided they have capacity to do so.
In what 3 situations may a will be revoked?
1) By a later will or codicil.
2) By destruction.
3) By marriage/forming a civil partnership.
How can a will be revoked by a later will or codicil?
- With a declaration to that effect in a later will or codicil; usually ‘I hereby revoke all former wills previously made by me.’
- In absence of express revocation clause, it operates to revoke any earlier will or codicil by implication in the event of any inconsistency.
N.B. Advisable to date a will so chronology can be established for revocation.
How can a will be revoked by destruction?
- Physical destruction + intention to revoke (not accidental) is required.
- Crossing out words/writing ‘revoked’ across the will is insufficient, but if a vital part e.g. signature is destroyed, partial destruction may be held to revoke the entire will or just that part which was destroyed if the will can still operate in the absence of the destroyed part.
- Must be carried out by the testator or by someone else in the testator’s presence and by their direction.
Explain the ‘doctrine of dependent relative revocation’?
Can be applied to save a will, on the basis that the testator’s intention to revoke their will by destruction was conditional on some future event e.g. the later execution of a new will.
If that event did not take place, the original may remain valid despite being destroyed.
How can a will be revoked by marriage/civil partnership?
Automatically but will not apply where;
– A will is made prior to and in expectation of a forthcoming marriage/civil partnership to a particular person (general expectation or hope of marriage is insufficient).
– The testator intends that the will is not to be revoked by marriage.
– N.B. Where a civil partnership is converted into a marriage, the conversion will not revoke an existing will of either party.
What happens where a testator makes a will and is later divorced, or the civil partnership is dissolved?
The will remains valid but;
– Provisions of the will appointing the former spouse/civil partner as executor or trustee take effect as if the former spouse/civil partner had died on the date on which the marriage or civil partnership is dissolved, and
– Any property, or interest in property left to the former spouse/civil partner passes as if the former spouse/civil partner had died on that date.
When do mutual wills arise?
Where 2 people make wills in similar terms as a result of a clear agreement between the testators as to the disposal of their estates and part of that agreement is that the survivor will not revoke their will.
E.g. husband and wife making wills to leave their respective estates to each other with the proviso that whichever of them survives leaves their estate to the wife’s daughter from a previous relationship.
If the wife died first, the husband could technically revoke the mutual will and make a new one but equity imposes a mutual will due to it being unconscionable for him to go back on his promise.
N.B. If one testator unilaterally revokes their will during their joint lives, this amounts to breach of agreement and the other testator can seek damages for loss.
What is the effect of a mutual will?
Not to invalidate any new will, but impose a constructive trust in favour of the original beneficiary under mutual will.
Key to agreement is that survivor will not revoke their will.
What is a codicil and how are they used?
A document which is executed in the same way and supplements an existing will; used to amend, add to or revoke in part, an existing will, with the effect of republishing the existing will.
Testator must have intended to republish the will (evident either on face of codicil through express statement, or inferred by reference to previous will).
Means the description of people in a will is taken to refer to those who satisfy the description at the time of republication.
Means a gift which is invalid due to beneficiary acting as a witness will be saved if the will is republished by a codicil which is not witnessed by beneficiary.
Can a codicil revive a previously revoked will?
Yes; taking effect as if made at the time of revival and must evidence the testator’s intention to revive the will.
When is a republished will deemed to have been made?
At the time of republication.
From a practical point of view, if the changes to a will are substantial, is a codicil best to rely on?
No; make a new will.
What is the key question regarding alterations (changes made on face of will itself)?
When the alterations were made;
– If made before the will was executed, valid provided the testator intended the alterations to form part of the will.
– If made after the will was executed, valid if those alterations were themselves executed like a will.
When are alterations to a will presumed to have been made?
After the will was executed unless the contrary can be proved through extrinsic evidence etc.
Do the initials of the testator and the witnesses in the margin next to the amendment suffice as a valid alteration?
Yes; will to be read to take account of it.
What happens when an invalid alteration has been made?
Original wording of the will stands provided it is ‘apparent’ (capable of being read on the face of the will by ordinary means e.g. magnifying glass, holding up to light).
When does an exception to the requirement that to be valid an alteration must be executed arise?
When the testator makes an amendment which simply obliterates the original wording, provided that the act of destruction is accompanied by the intention to revoke.
Here, the will remains valid but it takes effect without the obliterated words.
When may the court apply a conditional revocation rule?
Where the testator obliterates the original wording but adds some substitute wording (i.e. testator only intended to revoke the original words on condition that the substitute words were effective).
As substitution was not effective, the original gift will take effect (provided it is possible to discover what original gift was).
How do law firms tend to draft wills?
Through the use of drafting templates or precedents for convenience.
What usually goes in the ‘opening’ of a will?
- Identify the testator and document nature, with full name and address stated.
- Date (at time it is executed) within commencement or at end to help with chronology for purposes of revocation.
- If a will is being made in expectation of marriage/civil partnership to a particular person, state this alongside the fact that they do not wish marriage to revoke the will or it automatically will.
What is the required number of executors to be appointed?
- Minimum 1, no maximum but max of 4 can apply for grant of probate to the same assets.
- 1 will often be sufficient for a small simple estate where the executor is the sole or main beneficiary, but there is a risk that a sole executor may predecease the testator or be unable to act for another reason e.g. divorce so prudent to appoint at least 2 or name a substitute for sole executor.
Who may the testator appoint to be executor?
Any combination of;
- Individuals who are not professionals (e.g. family and friends).
- Solicitors or other professionals (e.g. firm).
- Banks or other trust corporations.
List some advantages and disadvantages of appointing individuals who are not professionals (e.g. family and friends) to act as executor?
Advantage;
- Trusted individuals familiar with the testator and their affairs are unlikely to charge for their time.
Disadvantage;
- Lack of expertise may necessitate hiring a solicitor, incurring costs from the estate.
List some advantages and disadvantages of hiring solicitors or other professionals (e.g. firm) to act as executor?
Advantages;
- Expertise in estate administration; takes on burden during grieving stage.
- Avoids risk of individual solicitor retiring/dying.
Disadvantage;
- Professional executors charge fees for both time and expenses.
List some advantages and disadvantages of hiring banks and other trust corporations to act as executor?
Advantages;
- Continuity, financial and legal expertise.
- No risk of corporation dying or retiring.
Disadvantages;
- Impersonal approach.
- Potentially high costs due to %-based fees.
What charging provisions exist in wills?
TA allows payment of reasonable remuneration to a trustee (including PR) for time spent and work done, but only if the trustee is either a trust corporation or a trustee ‘acting in a professional capacity’.
Wills thus often contain an express power for the executors/trustees to charge (charging clause).
Do guardians need to be appointed to look after the children after the death of both parents where the testator/testatrix has infant children?
Yes.
What happens if the testator does not own the specific asset at death?
The gift fails (adeems).
What is the difference between a vested and contingent gift?
Vested gifts impose no conditions, and the beneficiary will be immediately entitled to it merely by outliving the testator.
Contingent gifts impose conditions to be satisfied before the gift can vest.
Is a beneficiary who predeceases the testator able to take a gift?
No; the gift will lapse and will pass with residue unless the will provides for a substitute beneficiary.
What is the default position regarding IHT and individual legacies?
The IHT on individual legacies is paid out of the residuary estate, unless the will displaces this rule through a contrary intention.
What happens when the will is silent on IHT?
The beneficiary (one who takes the gift) takes the property free of IHT but subject to any charge.
Who bears the burden of paying off mortgage debts?
The beneficiary who receives the charged property unless the will contains a contrary direction.
N.B. If the testator does not want the beneficiary of the charged property to take on the mortgage debt, the devise should be expressed as ‘free of mortgage’, to cast the burden of the mortgage debt on the residue.
Can a solicitor act where the client instructs the solicitor to draw up a will which includes a gift to the solicitor?
Yes; as long as gift is small in value and solicitor is satisfied that client has taken independent legal advice.
Why is it important that a gift of the residue is put in the will?
To ensure it does not fail as this would result in a partial intestacy due to statutory order in AEA 1925 applying.
How can partial intestacy be avoiding when gifting residue?
By omitting names and specific shares and refer to only any children that the testator may have at the date of death e.g. ‘for such of my children as survive me and if more than one in equal shares’.
This ensures partial intestacy only occurs if all children predecease the testator.
Why are survivorship clauses often used in wills?
To give the testator more control over the destination of their property.
