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Law > Wills and Trusts > Flashcards

Wills and Trusts Flashcards

1
Q

Who inherits under intestacy if there is a spouse or CP?

A
  • Spouse or Civil Partner get 322k and half of the rest.
  • The other half of the rest go to issue on statutory trusts.
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2
Q

Who inherits under intestacy if there is no spouse?

A
  • Issue on statutory trusts, but if none:
  • Parents, but if none:
  • Whole siblings, but if none:
  • Half siblings, but if none:
  • Grandparents.
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3
Q

What does statutory trusts mean?

A

The person inheriting is a beneficiary.

Interest contingent on turning 18 or marrying.

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4
Q

What happens if a child dies before the intestate and they have children of their own?

A

Their children take their beneficiary interest equally.

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5
Q

Can a beneficiary under a will be the executor?

A

Yes.

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6
Q

Can a beneficiary under a will be the witness? Can their spouse?

A

Neither can be witnesses and the gift will be invalid. However, the will is still valid.

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7
Q

Under what circumstances is undue influence presumed under a will?

A

None. It never is.

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8
Q

Does a life interest in a trust pass under a will?

A

No. It passes under the trust.

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9
Q

When is there a presumption of knowledge and approval of a will?

A

When the circumstances under which the will was drafted are not sus.

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10
Q

Do the witnesses of a will need to sign in each other’s presence?

A

No.

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11
Q

Does there need to be a clear line of sight between witnesses and the person signing their will?

A

Yes.

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12
Q

Does a declaration of trust need to be made in writing?

A

Only if is a trust over land.

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13
Q

What is the rule in Strong v Bird?

A

If I had intention to give you an immediate gift which did not change before my death and you are the executor of my will, equity will complete the transfer even if I have not completed the formalities.

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14
Q

What is the every effort test?

A

Equity will complete a gift if I have done everything required of me and the only outstanding actions were those of someone else.

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15
Q

When would the Probate Service require an affidavit of due execution?

A

When the attestation clause in the will has not been properly executed.

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16
Q

Must there be witnesses for the destruction of a will for the purposes of revocation?

A

No.

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17
Q

Does divorce revoke a will?

A

No.

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18
Q

What are the three methods of revoking a will?

A

Destroying it.

Making a new one.

Marrying.

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19
Q

If I inherit a mortgaged house, do I inherit the burden of the mortgage?

A

Yes.

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20
Q

Are initials sufficient for the alteration of a clause of a will?

A

Yes.

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21
Q

Does a ‘husband’ under a will continue to be a beneficiary under a will after divorce?

A

No. They lose their identity as ‘husband’.

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22
Q

If you say ‘my diamond necklace’ and you have two, does that classify as uncertainty of subject matter in a will?

A

Yes.

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23
Q

When does a gift lapse and when does it adeem?

A

It lapses (fails) if the beneficiary dies before the testator.

It adeems if the subject matter ceases to be (eg shares are sold).

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24
Q

Is partial intestacy possible?

A

Yes if the will does not provide for where the residue should go.

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25
Q

When will a gift to someone not pass to their children if they die before the testator?

A

If that person is anyone other than the testator’s child.

Note: the gift passing to children of the dead is meant to protect vulnerable grandchildren who have been orphaned.

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26
Q

What happens if you kill someone whose will you were in?

A

You forfeit your gift in the will.

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27
Q

What happens if you kill a fellow joint tenant?

A

Their share does not pass by survivorship. You forfeit that right.

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28
Q

Do you take the burden of IHT under a will?

A

Not if the will is silent.

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29
Q

When will a court use extrinsic evidence to interpret a will?

A

The clause is meaningless.

The clause is ambiguous on its face.

The clause is ambiguos in light of the circumstances.

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30
Q

Will a court rectify a will if it satisfied that it is expressed with a clerical error?

A

Yes.

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31
Q

Does the rule against inalienability always apply?

A

Not to charitable trusts.

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32
Q

Does the personal nexus test apply to charitable trusts for the sake of combatting poverty?

A

No.

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33
Q

Can a charitable trust be political?

A

No.

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34
Q

What makes a charitable trust?

A

It is for the public benefit.

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35
Q

What are the two types of non-charitable purpose trusts that are also valid?

A

Maintenance of animals and graves.

Purpose trusts with a beneficiary that can enforce it (Re Denley).

Both must satisfy the rule against perpetuity.

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36
Q

What is the problem with ‘I give them this with the hope that they will do that’?

A

Insufficient certainty of intention.

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37
Q

What is the time period for the rule against inalienability?

A

21 years. The non charitable purpose trust must explicitly say that the trust must be disposed of within 21 years ‘or according to statutory limits’.

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38
Q

When can you give evidence to rebut a presumed resulting trust after the trust was created?

A

When it is evidence against you.

If you were allowed to create evidence in favour of you after the fact, you would be able to alter your intention at the time the trust was created.

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39
Q

When does the presumption of a resulting trust arise?

A

Give consideration for free.

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40
Q

When does the presumption of advancement arise?

A

Money or purchase price or home to children for free.

Note: mostly fathers.

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41
Q

What is the difference between common intention constructive trusts and proprietary estoppel?

A

For common intention constructive trusts, the person needs to have contributed to purchase price or mortgage payments.

For proprietary estoppel, the person only needs to have relied on assurance that they owned an interest and acted in their detriment.

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42
Q

What proves common intention for a constructive trust?

A

Either express common intention or payment or purchase price or mortgage.

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43
Q

Can payments to purchase price be indirect?

A

Yes. If you pay bills so partner can pay mortgage.

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44
Q

Is there a presumption of a resulting trust possible due to the voluntary transfer of land for no consideration?

A

No.

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45
Q

Do mortgage payments lead to constructive or resulting trusts?

A

Constructive trusts.

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46
Q

Do the rules of a pre-deceasing child apply if they died hours or days before the testator?

A

Yes.

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47
Q

Who needs to consent for a trust to be brought to an end?

A

All beneficiaries who could be entitled to interest in the trust if they are 18 and of sound mind.

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48
Q

What makes an alteration after a will valid?

A

It needs to be executed and witnessed like a will but initials will suffice.

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49
Q

What are the IHT bands?

A

0 up to 325k.

40% anything above 325k.

40% above 500k for property.

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50
Q

What is exempt from IHT? What is the condition for exemption?

A

Property going to spouses.

Charity.

100% relief for shares of UNLISTED company.

50% relief for shares if you owned more than 50% or of any equipment or property used by a partnership.

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51
Q

What is the annual exemption for transfers for the purposes of IHT?

A

3k and can be carried over 1 year for a total of 6k.

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52
Q

What is the tapered band for PETs?

A

Less than 3 years: 40%

3 - 4 years: 32%.

4 - 5 years: 24%

5 - 6 years: 16%

6 - 7 years: 8%

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53
Q

How is IHT distributed between assets within the estate?

A

Distributed equally between assets across the estate.

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54
Q

How much goes to your estate if you have a 50k account jointly held with someone?

A

25k.

Note: be careful with this in IHT questions.

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55
Q

What is the policy for unused nil rates by spouses?

A

If someone dies and uses 0% of their nil rate, the estate of their spouse can apply a 100% increase to the nil rate that applies at their death.

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56
Q

When are installments available for IHT?

A

Property

All CONTROLLING shares.

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57
Q

Which IHT do executors need to pay to obtain grant?

A

Any IHT which is not eligible for installment payments.

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58
Q

Can mortgage payments after purchase result in a resulting trust?

A

No. Only constructive.

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59
Q

Is equity supposed to have been satisfied or established?

A

Established.

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60
Q

How much will a court award under a constructive trust?

A

What the parties intended and, if that can’t be ascertained, the share which would be fair having regard to course of dealing.

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61
Q

How much will a court award under a resulting trust?

A

You get what you paid for.

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62
Q

Can you use your nil rate band on a lifetime chargeable transfer to a trust?

A

Yes.

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63
Q

When are two administrators required?

A

When one of the beneficiaries is a minor or only has a life interest.

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64
Q

When does a will need to have more than one executor?

A

Never.

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65
Q

Which assets do not pass through a PRs hands?

A

Insurance policy written in trust or assigned for others.

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66
Q

Is IHT paid before or after obtaining grant of rep?

A

Any IHT that is due and payable before grant must be paid before grant of probate can be obtained.

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67
Q

What is the rank of priority for beneficiaries wanting to get grant of probate under intestacy?

A
  • Spouse.
  • Children.
  • Parents.
  • Siblings.
  • Grandparents
67
Q

What are the rights of a beneficiary under intestacy?

A

Compel the issue of grant.

Sue PR for breach of fiduciary duty.

Sue PR for devastavit of the estate.

Trace loss from PRs or helpers, same as trusts.

67
Q

How long do PRs have do distribute estate after grant of probate?

A

An executor’s year.

68
Q

How soon after death does IHT need to be paid?

A

6 months.

69
Q

What amounts to automatic retirement of a trustee?

A

Death.

70
Q

What can a trustee do on retirement of a co-trustee?

A

Appoint a replacement.

71
Q

When can beneficiaries remove and replace a trustee?

A

If they are absolutely entitled to a trust and are all alive and over 18 and in agreement.

72
Q

Can a trustee randomly appoint a new trustee?

A

Only if the trust has three or less trustees.

73
Q

If a third trustee retires, do the remaining two need to appoint a replacement?

A

No. They can have the trust vested in them alone as two trustees.

74
Q

What are the investment duties of trustees?

A

Have regard to standard investment criteria: suitability, diversification, and advice.

75
Q

What are some duties of trustees?

A

Invest

Act in the interest of beneficiaries.

Duty of care.

Duty to act personally.

76
Q

What is the statutory duty of care that trustees have with beneficiaries?

A

Reasonable care and skill. Objective.

77
Q

Can an individual trustee delegate their functions?

A

Only by deed, for less than a year, and they remain liable.

78
Q

Can the collective trustees of a trust delegate their functions?

A

Only with regard to administration - there must be a written policy statement.

79
Q

What is the Power of Advancement or benefit and when does it apply?

A

When a beneficiary is entitled to trust capital even if contingent, the trustees can release half the capital early if the trust was created before 2014 or all of it if it was created after.

Any other person with prior interest must be an adult and consent to the advancement.

80
Q

Does the assistance of parents of young beneficiaries classify as advancement or benefit?

A

No.

81
Q

What is the Power of Maintenance and when does it apply?

A

If a minor beneficiary has a contingent interest in the capital, trustees can at their discretion give their parents income for maintenance so long as it’s reasonable. When the minor turns 18, they have to give the income directly to the minor until their interest in the capital vests.

82
Q

What are beneficiaries entitled to see?

A

Trust documents and an explanation as to why a discretion was exercised against them when they had a legitimate expectation that it wouldn’t be.

83
Q

Can you self deal as a fiduciary?

A

Only if the beneficiaries are aged 18 and consenting.

84
Q

What is the presumption of undue influence that applies to a fiduciary with regard to fair-dealing?

A

If a trustee self-deals, there is a presumption of undue influence on the beneficiaries that must be rebutted.

85
Q

When can trustees be renumerated?

A

If the beneficiaries consent.

There is a charging clause in the trust instrument.

They are acting in a proffesional capacity like solicitors or accountants AND the other trustees consent.

86
Q

Can you make incidental profits using knowledge or positions obtained as a trustee?

A

Only if trust instrument or beneficiaries allow it.

87
Q

What is the difference between a grant of probate and a letter of administration?

A

Grant of Probate is for Executors or Administrators under wills.

Letter of admin is for intestacy only.

88
Q

Can a parent of a child beneficiary act as administrator on their child’s behalf?

A

Yes. Even if they never married the testator.

89
Q

Can you apply to a court to replace an executor?

A

Yes.

90
Q

What property can be dealt with without a grant of probate?

A

Chattels.

Property less than 5k.

Cash at home.

91
Q

Which form is for grant of probate and which is for letter of admin?

A

PA1Probate with will

PA1Adminstration without will

92
Q

What is the first type of excepted estate that does not require IHT?

A

Within the nil-rate band of 325k or more if the predeceased spouse didn’t use it.

93
Q

What is the second type of excepted estate?

A

Less than 3 million and, after deducting charity and spouse exemption, remaining cash is within nil-rate band.

94
Q

Can you be under 18 and married and apply for grant of probate?

A

No.

95
Q

Do trustees have to give reasons for not exercising powers?

A

No.

96
Q

What is a tricky situation where beneficiaries are not entitled to a trust?

A

If their interest is contingent and they could die before it vests, someone else will benefit from it.

If one of them reaches the age, they become absolutely entitled ‘between them’ and can fire a trustee so long as they are all sui juris.

97
Q

Does a trustee need to retire or delegate in writing or by deed?

A

By deed.

98
Q

If I’m retiring from a trust, do I need to be a party to the appointment of my replacement?

A

No. You’re irrelevant now.

99
Q

When do two trustees need to replace a retiring third?

A

When the third has retired by being outside the UK for more than a year.

100
Q

When does the power of maintenance to a beneficiary entitled to the capital not apply?

A

When there is another beneficiary who is entitled to all of the income.

101
Q

What is the difference in limitations between collective and individual trustee delegation?

A

Collective - only to specific matters and liability is limited.

Individual - all matters but you are vicariously liable.

102
Q

What is the key difference between trusts pre and post 2014?

A

Pre - can only advance half capital.

Post - can advance whole capital.

103
Q

Can UK trustees purchase land outside the UK?

A

No.

104
Q

When is the first installment for IHT payable for land due and how much is it?

A

10% within six months of death.

(Does not need to be paid before letter of Admin)

105
Q

When is the residence nil rate not applied?

A

When the residence is not ‘closely inherited by a child’.

106
Q

How does an administrator protect themselves against undiscovered beneficiaries?

A

Advertisement in London Gazette and local newspaper.

107
Q

How does an administrator protect themselves against a known beneficiary who is nowhere to be found?

A

Apply to court for Benjamin order which authorizes them to distribute estate as if beneficiary is dead.

108
Q

If the will does not direct, should PRs take the wishes of the beneficiaries into account when considering which asset to sell to pay for estate’s debts?

A

Yes.

109
Q

What is the order of sale for the assets of an estate to pay debts?

A
  • Assets undisposed of in the will.
  • The residuary.
  • Property charged with payment of debts.
110
Q

If I’m gifted shares under a will, when do I start being entitled to dividends?

A

Upon death.

111
Q

If a will gives a pecuniary gift but there is no cash, which assets are sold first?

A

Personalty before realty.

112
Q

What sort of tax do PRs need to pay on an estate?

A

IHT (mostly before grant)

Income tax.

NO CGT. For the purposes of CGT, PRs acquire assets at price on day of death.

113
Q

What steps do PRs take during administration?

A
  1. Pay debts.
  2. Pay taxes.
  3. Distribute assets.
114
Q

What is the rate of income tax that PRs pay?

A

8% on dividends.

20% on all other income.

Basic rate, basically.

115
Q

Which PRs need to file a tax return for an estate?

A

If the estate is complex.

Worth more than 2.4m.

Tax due more than 10k.

116
Q

Are PRs fiduciaries?

A

Yes.

117
Q

What is an interest in possession?

A

The right to income.

118
Q

If you self-deal as a PR what do you need for the transaction not to be voidable?

A

The consent of the other beneficiaries as long as they are all sui juris.

119
Q

Does the annual exemption for CGT continue indefinitely for PRs of an estate?

A

It only exists for the first two years.

The exemption is available annually for the first two years.

120
Q

Which allowance in tax are PRs entitled to?

A

Annual exemption for CGT.

NOT personal allowance for income.

121
Q

Who can claim family provision?

A

Partners

Former partners who haven’t remarried.

Dependents and anyone being maintained.

Unmarried partners living in the same house for at least two years.

122
Q

Does the dead person need to have been domiciled in England and Wales for the sake of family provision?

A

Yes.

123
Q

What is the effect of a variation read back to the will for IHT purposes?

A

It means the old person who replaced themselves with the new person (usually their child) will not be regarded as having made a PET to their child.

124
Q

What is the time limit for post death variations?

A

Two years.

125
Q

What is a post-death disclaimer?

A

A rejection of a gift under the will that goes to the next person in line.

126
Q

Can post-death variations be made in exchange of consideration of money?

A

No.

127
Q

Can step-children apply for family provision?

A

If they were treated by the deceased as a child. So it depends.

128
Q

Can variations be read back for the purposes of CGT?

A

Yes. New beneficiary receives asset as having bought it at price at time of death.

129
Q

Can liability be excluded in a trust?

A

Only by the settlor.

130
Q

Are trustees entitled to an indemnity or a contribution from their co-trustee if they get sued?

A

A contribution.

131
Q

When is a recipient of stolen trust money liable?

A

When they knew it was stolen and unconsciousably retained it.

132
Q

Which type of claim against a trustee does not have the usual six year limitation period?

A

A proprietary claim.

133
Q

What is an equitable lien over a property?

A

The share of the property that was paid for using your money.

If 10k was used, you get 10k back, even if the property appreciated.

134
Q

What is the rule in Clayton’s case regarding mixed stolen trust funds and what is the exception?

A

First stolen money in, first stolen money out.

Except if it would result in injustice - then the court has discretion.

135
Q

When are you not entitled to the remaining balance of a thief trustee’s bank account?

A

When the balance available was deposited after your money was spent.

136
Q

What is the standard of ‘dishonest assistance’?

A

Objective standard like tort.

137
Q

When can you bring a personal claim (not proprietory) against a recipient of stolen trust money?

A

When they knew that shit was sus.

They have recipient liability.

138
Q

Who can sign a will on behalf of a testator and what are the conditions?

A

An attesting witness or sole beneficiary but the testator must be mentally and physically present.

139
Q

Can you disclaim a gift in a will orally?

A

Yes.

140
Q

What is the effect of a buyer’s solicitor asking a seller if anyone has any interests in the property and the seller saying no?

A

The buyer officially has no notice and is Equity’s darling.

141
Q

What is the time limit for applying for family provision?

A

Six months within grant of probate.

142
Q

What is presumed when two family members die and it is impossible to determine who survived the other?

A

The younger survived the elder.

143
Q

What are the rules of creating a valid will?

A
  • Written and signed or testator directs someone to sign.
  • Must be intended.
  • Must be witnessed by two or more mentally and physically present people.
  • Signatures must be witnessed by testator.
144
Q

Does the lack of an attestation clause make a will invalid?

A

No.

145
Q

Who has first rights of entitlement to obtain a grant of rep under a will?

A

Those entitled to the residuary.

146
Q

When is prior interest consent required vs ‘absolutely entitled’ consent required?

A

Prior interest - advancement of capital.

Absolutely entitled and sui juris - end the trust.

147
Q

Can a settlor change the terms of a trust after it has been created?

A

Only if the trust contains an instrument allowing them to do so.

148
Q

When will a will made in contemplation of a specific marriage remain valid despite the marriage?

A

When the marriage is due to take place in the foreseeable future.

149
Q

What is the statutory perpetuity period for trusts?

A

21 years for animals.

(80 before 2010)

120 since.

150
Q

Can you sever a joint tenancy through a will upon death?

A

No. Severance must be immediate and irrevocable.

151
Q

Does a testator need to be physically present during the destruction of a will?

A

Yes.

152
Q

Who cannot witness wills?

A

Blind and drunk people.

153
Q

When will revocation of a will through destruction not be valid?

A

When the revocation was conditional and the condition was not met.

154
Q

How many months are presumed to have been lived in in your residence for the purposes of getting CGT relief on your private residence even if you haven’t lived in the property?

A

Nine months.

155
Q

What happens to ‘I give 100 pounds to Adham to do his best in taking care of Nadine’?

A

Trust fails due to certainties and becomes an absolute gift to Adham.

156
Q

Who can make a valid will without signing?

A

Soldiers.

157
Q

What is the only trust wherein a trustee has a duty to consult a beneficiary?

A

Trust of land, must consult beneficiary with interest in possession.

158
Q

What is the statutory limitation period for fraudulent and non-fraudulent breaches of trust?

A

Fraudulent: no limit.

Non-fraudulent: six years.

159
Q

Do witnesses need to know what the document they are witnessing is?

A

No.

160
Q

What happens when a testamentary trust under a will fails? Does it fall into the residue of the will or into intestacy?

A

Partial intestacy arises.

161
Q

Who can apply for maintenance?

A

The parents of a minor beneficiary entitled to the capital.

The minor themselves cannot apply.

162
Q

When will the court NOT intervene with a will?

A

When the mistake is not clerical but rather it doesn’t understand the legal effect of the will.

163
Q

Which costs can be added to purchase cost for the purposes of CGT?

A

Legal and surveyor fees. Extension fees.

NOT maintenance fees.

Law (10 decks)

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