Wills: Drafting and Interpretation Flashcards
What introductory clauses are included on a standard will?
- Commencement
- Revocation
- Burial/funeral wishes
- Appointment of executors and trustees
- Appointment of guardians
What does a commencement do?
Introductory clause
- Identifies testator (full name [inc other names], address and sometimes occupation)
- Refers to assets owned in another name
- Includes date (or at end of will)
If the testator is known by other names (aliases), which one of their names should be included?/
All of them
What does the revocation clause do?
Introductory clauses
Ensures all previous wills/codicils revoked so only one exists at a time
Valid without (e.g. implied revocation) but included for certainty
Are burial/funeral wishes legally binding on PRs?
Introductory clauses
No
What are the rules on appointing executors?
- Cannot choose minor/lacking capacity
- Must be at least 1 - maximum of 4 (good to appoint 2 in case of death/unwilling to act)
- T should obtain consent in advance
What happens if more than 4 executors are appointed?
Power reserved to those who do not initially apply to apply later if vacancy arises
What happens if surviving spouse is appointed and they divorce?
Unless otherwise stated - appointment of partner becomes ineffective
Whilst scope of executor’s appointment is in most cases unrestricted, how can qualified appointments limit this?
- Time - to take effect only for fixed period/survive T by certain period
- Location of assets - to take effect only for assets from UK
- Type - to take effect only for e.g. business assets
Grant of issue will be similarly limited
What is the effect of ambiguity re appointment?
Void
If a trust does/could arise following testator’s death, how many Ts should act?
E.g. express trust created, there are minor Bs
At least 2 Ts should act
Does the same person have to be appointed as both executor and trustee?
Not necessary but is common
If appointing a law firm partnership, who is actually appointed?
All partners at date of death are appointed
- Number who can act can be limited
- Can express preference but cannot personally appoint (may leave firm)
Can an LLP or trust corporation be appointed executor?
Yes
Can all executors and trustees charge for their time?
Only professional executors
What will professional executors/trustees rely on to charge for their time?
An express charging power as part of appointment clause
Can also rely on s29 but this has restrictions
What does express charging clause/s29 protect professionals from?
Breach of fiduciary duty by making profit from receiving payment for services
What happens if someone is appointed guardian but one parent still survives?
It would not take effect until death of surviving parent
Can a legacy be conditional on appointment of guardian?
Yes e.g. legacy only to be paid if guardian appointed
What is the difference of the executor and trustee role?
And when does each role end?
- Executor - primary duty is to administer estate and will complete task when all remaining assets are distributed to Bs
- Trustee - responsible for management of trusts that continue following administration and role continues as long as trust in existence
How can a trust arise out of a will?
- Will may include express trust
- Trust may arise if executors cannot distribute all estate e.g. B a minor, contingent interests not satisfied
What happens where a will gives a gift to a minor or the gift is contingent?
A trust will be created and legacy held by trustee (likely to be same person as executor) until of age/condition satisfied
NB important to remember that a trust is not only created expressly in will - if a gift is left to a minor a trust will automatically be created as minors cannot give good receipt (alternatively can be given to parents)!
Are the executors/trustees beneficial owners of the assets they manage?
No - must be given power to carry out role (from will, statute or common law)
What happens when a will contains no express administrative powers?
By default only statutory and common laws apply
Same as intestacy
Where a will creates a trust, what is the trust deed?
The will!
Trust deed usually refers to document creating lifetime trust
Should the date be included as part of the attestation clause or at commencement?
Either, but not both
What does a dispositive clause tell us?
Who is to inherit what assets and on what terms
What is the difference between a ‘legacy’ and ‘devise’?
- Legacy refers to a gift of chattels or personality
- Devise refers to gifts of real property
Can generally refer to them as ‘gifts’
Does property/cash have to be given to named Bs directly and absolutely?
No - can be subject to conditions/terms of a trust
What is the traditional order of dispositive clauses?
- Non-monetary gifts
- Gifts of cash
- The gift of ‘everything else’
What is a specific gift?
Gifts of a particular, identifiable item owned by deceased at date of death
May be a collection e.g. household furniture
In what 2 circumstnaces will the specific gift be void?
- Not drafted precisely
- Does not own at death
What can the testator include in their will to account for the event that the original item is replaced/no longer exists at death?
An alternative gift can be included
E.g. “I give to [ ] absolutely my Stradivarius violin or such other violin that I own at my death which I keep in my safe”
If the collection is to be divided at discretion of Bs, what provisions should also be included?
- The time frame for deciding
- How to deal if failure to decide e.g. executors decide
How does a testator prevent chattles from being distributed as part of general residue?
Include specific clause
What if the statutory definition of chattels excludes items that testator wants to gift?
E.g. items owned solely as investment, item used mainly for business
Amend the definition in will to include certain items
What if both specific gifts and gift of chattel clauses try to give away same items?
Specific gift will fall within general definition of chattel
Gift of chattels drafted only to cover items that have not already been given away
As specific gifts appear before gift of chattels in a will
What are the considerations when giving a specific gift of land?
- Property must be identifiable (full address and reg title number)
- Must state what happens if property no longer owned (may be “main residence on the date of my death” instead)
- Joint tenancy must be severed
- Should check whether third party interests affect property
- If being left to more than one person the terms of their joint ownership should be clear
What if the specific gift of land is subject to a charge/mortgage?
Testator needs advice relating to the repayment of any outstanding loan and who should be liable for this
What is a general legacy?
A gift of property which is not distinguished from property of a similar type (“a” rather than “my”) i.e. testator will not own it
Most pecuniary legacies are general in nature
How to spot the difference between a specific and general legacy?
- Specific - ‘my…’, ‘all my…’
- General - ‘a…’
Cf
- ‘My 500 shares in ABC Ltd’ = specific
- ‘500 shares in ABC Ltd’ = general
Like unidentifiable specific legacies, will general legacies often fail?
No - if the property was not part of the estate at death the PRs would have to buy it
Recall - “a” not “my”
What is a demonstrative legacy?
Type of general legacy (often pecuniary) which the will directs should be paid out of a specified fund
Demonstrative fund - demon has money fund
Will a demonstrative legacy fail if there are insufficient assets in specified fund?
No - B entitled to receive what is remaining and the remaining balance is paid as a general legacy
What is a pecuniary gift?
A gift of money
Will be be in numbers and words (for error when typing number)
Will a pecuniary gift be specific or general?
Can be either (£300 from the safe in my garage or £300)
What is the residuary legacy?
A gift of all of the testator’s property (capable of passing in the will) which has not already been disposed of under will or later codicil
Complex - lots of substitutional gifts and age contingencies and trusts
What will be paid out of residual estate?
Debts, legacies, funeral/admin expenses
What is a substitution clause?
A clause that only comes into effect if another does not
E.g. b here…
a) My spouse absolutely but only if she survives me by twenty-eight clear days
b) If clause (a) fails for any reason I GIVE my Residuary Estate to my trustees to hold on trust as set out in clause [ ]”
Where will a trust be imposed if a residuary legacy is not given directly to B?
- B given a life interest in residue
- DT of residue is to be set up
- Residue given to more than one person
- There are contingent or minor interests
Clause should be drafted incorporating the trust to cover a declaration of the trust and the terms of the trust itself
What happens if an asset given by an earlier gift in the will fails?
Subject matter of gift passes under the residue clause instead
What happens where a residuary gift fails?
There is a partial intestacy!
E.g. 1/3 to Jacob, 1/3 to Darren, 1/3 to Charlie - if Charlie dies, partial intestacy with his 1/3
How can the failure of a residuary gift/partial intestacy be avoided?
- Avoid giving separate gifts of residue (e.g. to my nephews as survive me and if more than one in equal shares instead of 1/3 to each)
- Create express substitution clause in event original gift does not take effect
- Use an ultimate gift over clause (disaster clause) which specifies who estate passes to if all othe gifts fail e.g. charity
What does ‘date from which the will speaks’ refer to?
The rules that apply to determine the date on which the subject matter/object of gift should be ascertained where the wording in will not definitive
What is the general rule for property?
Re date from which the will speaks
Unless contrary intention shown, the will speaks from the date of testator’s death
Property = promptly = most recent = death
What is the effect of a contrary intention for property and how can it be demonstrated?
Re date from which the will speaks
Makes the date of execution the relevant date - uses words like “my”, “now” or “at present” when describing gift
I.e. if a will says “my BMW” this means the BMW that they owned at date of execution. If they sold this BMW and bought a new one, then this is a different BMW and will not replace the “my BMW” in the will
What happens if the testator no longer owns the property when they die and they have used a contrary intention?
The gift will adeem and B receives nothing
Unless there is a substitutional gift
I.e. will not receive replacement asset unless this was provided for
What is the general rule for collections when ‘my’ is used?
Re date from which the will speaks
If there is a gift of collection capable of growing, the will speaks from date of death even if they use ‘my’
E.g. ‘my Tesco plc shares’ = number of shares owned at the date of death
What is the general rule for (identifying) people?
Re date from which the will speaks
Will is deemed to speak from the date of execution unless contrary intention shown
People get executed = date of execution
What should a testator do where gift is given to a class of B?
Re date from which the will speaks
Should state expressly when Bs will be determined
E.g. “Grandchildren” could mean a) alive when will executed b) alive when testator dies or c) all including those born after testator dies
What happens re people where there is no express wording? (e.g “my grandchildren” and not “my grandchildren alive when will executed”)
Re date from which the will speaks
The class closing rules apply
What are the class closing rules?
I.e. when will the class close?
Class closes from when the first B in the class obtains a vested interest (in possession)
E.g. oldest grandchild turns 18 = class closed and later born grandchildren excluded
What happens if there is a codicil?
Re date from which the will speaks
People are identified with reference to the date of the codicil
e.g. gift to ‘my nurse’ in a will would refer to the nurse at the date of a later codicil not the will
From what date does the will speak for:
- People
- Property
- Collections (property)
- People = date of execution (bar contrary intention and NB identifying class)
- Property = date of testator’s death (unless contrary intention then from execution e.g. “my”)
- Collections = date of testator’s death if capable of growing even if ‘my’ is used
What do relieving provisions deal with?
Who should bear the burden of taxes, charges, expenses and costs
Usually stated but general rules apply in absence
What happens in the absence of an express provision re inheritance tax?
Re gift in will
Individual gift is made free of IHT - IHT payable out of residue as general testamentary expense
Legacies would usually be drafted as free from tax (even if unnecessary)
When would a gift bear IHT?
If testator ousts the general rule by stating gift is to bear its own IHT
What happens in the absence of an express provision re expenses and costs of transfer?
Specific B will bear the burden of the cost of delivery and the expenses incurred since date of death in preserving the item/its upkeep (e.g. car insurance on gift of car)
How can testator ensure B does not pay expenses/costs of transfer?
State gift is to be ‘free of expenses/costs of transfer’ so costs are paid out of residuary estate
What happens in the absence of an express provision where property is subject to a secured debt/charge?
E.g. mortgage over house
The asset bears liability for payment
I.e. B inherits the property subject to the charge
How does a testator relieve the property of charge?
Can expressly relieve it to become a general debt payable out of residue
What is the overriding principle of construction?
The intention of the testator should be given effect to
Applied where meaning of a will/clause is unclear
What will a court use to determine the meaning of the words and what the testator intended?
Extrinsic evidence
To help with construction of will - not vary/contradict language
When can extrinsic evidence be submitted?
- Will/part of it is meaningless
- Language in any part is ambiguous on face of it
- Will is ambiguous in light of surrounding circumstances
What happens if the B predeceases the testator?
The gift will lapse
DOES NOT GO TO THEIR ESTATE
Is there an equivalent of the 28 day survivorship period for spouses/CPs for Bs to receive a gift under a will?
No, B must merely survive the testator (even if for short period of time)
What happens if two deaths occur in circumstances where the exact order of death is uncertain? E.g. car crash
Regarding who inherits from whose will
Presumption that the eldest died first
The commorientes rule
What happens if the order of the death is unknown?
Deaths treated as simultaneous
- Neither inherits from other
- Estates taxed separately
- Property which passes from first to die to second is not taxed again in second estate
How are the problems/confusion re two deaths occuring together in very close succession avoided?
By the will
Use an express survivorship clause - clause stating that in order to take a particular gift the B must survive testator for specified period of time
What is a class gift?
A gift given to a group of Bs who meet a general description (children, grandchildren)
What rules of construction are used where the absence of express wording means it is difficult to identify with certainty which individuals are included within a class?
The class closing rules
How do the class closing rules work?
A class closes (Bs within class identified and no one born subsequently can qualify) when any one member of class first becomes entitled in possession
I give £300 absolutely to each of my grandchildren who reach the age of 21
- When first grandchild reaches 21 the class of ‘grandchildren’ would close (this may be after the T’s death)
- If the T has grandchildren born subsequently these grandchildren would not be included.
How do the class closing rules apply if no contingency applies or at least one has already satisfied the contingency?
The class closes on date of death provided there is at least one person who satisfies the definition
What does it mean if a gift ‘vests’?
It is given outright and absolutely; no conditions which must be met
Can a minor have a vested interest?
Yes - the gift belongs to them. But the minor cannot give good receipt for capital so the gift would be held on trust until the child attains 18
Or parent could give good receipt
What is a contingent gift?
B will have to satisfy a condition before they inherit; once satisfied the interest vests
E.g. survive T by specified time or attain certain age
Most commonly used where gifts made to testator’s issue or in relation to residuary estate
What happens if they do not satisfy the condition?
Gift would fail
What happens to the gift if B dies before testator?
Gift fails
What happens to gift if B dies after testator and they have not received their inheritance yet?
Will pass in accordance with their will/intestacy
What is the difference in consequences between a pecuniary gift lapsing and residuary gift lapsing?
- Pecuniary gift = money ends up in residuary estate
- Residuary gift = full/partial intestacy
What can be used to prevent gifts lapsing?
Substitutional gifts
Can prevent intestacy re residue clause
E.g. I give my Residuary Estate to my wife but if she has died before me then I give my Residuary Estate to such of my children who survive me and if more than one in equal shares
Example of a substitution in favour of the testator’s grandchildren
I give my Residuary Estate to such of my children who survive me and if more than one in equal shares provided that if any child of mine shall have died during my lifetime leaving a child or children then any such child or children (meaning in either case a grandchild or grandchildren of mine) as shall attain the age of 21 years shall take by substitution and in equal shares if more than one the share of my residuary estate which their parent would have taken had he or she survived me and attained a vested interest
If there is no express substitution clause in a will that contains a gift to testator’s issue, what prevents a gift from lapsing if the issue predeceases the testator?
S33 - enables gift to be shared equally between issue of deceased B provided no contrary intention is expressed in will
Applies where there is a will containing a gift to issue, and intended B dies before testator leaving issue of their own who are living at testator’s death (i.e. a safety net in case of no express substitution clause in a will that contains a gift to testator’s issue which gives effect as if there were on)
Does s33 apply to gifts to siblings etc.?
No - only gifts to issue
Why is it preferable to include a substitution clause rather than rely on s33?
As would likely achieve the same result
Where original gift is contingent, it may be unclear whether s33 imposes a similar contingency
What must be considered if a testator wants to leave a gift to a club, institution, unincorporated association or charitable organisation?
- Organisation should exist and a full name/address/reg number given to avoid doubt of identity
- Whether organisation has registered charity status
- Express provision made for organisation subsequently changing its name, amalgamating with another organisation or ceasing to exist
- Provision should be made for who can give valid receipt (without: all members/potential Bs would need to give a receipt which is not practical)
What is the cy-pres doctrine?
A gift can be given to a different charity with a similar purpose where unoriginal gift cannot be given effect
Can an unexecuted document be incorporated into a will?
E.g. “I leave my collection of dolls to each of the people named in the list now to be found in my safe”
Yes by referring to it and satisfying certain criteria
What are the 3 criteria that must be satisfied for incorporating an unexecuted document into a will?
- Doc must exist when will is executed/at later time when codicil made (e.g. “this list is to be found in my safe = good, “a list I will write before my death = bad”
- Will must refer to document as being in existence at time of execution
- Document must be clearly identified
As the document itself does not comply with s9 Wills Act, what is the consequence of its incorporation?
It becomes part of the will (even though it does not comply!)
Document is made public along with will
What would be safer than incorporation of an unexecuted document if a testator wants an inventory/list of goods to be part of the provisions of the will?
Include list in the will itself as a schedule!
What are the STEP provisions?
A set of nationally recognised administrative powers for PRs and Ts which are commonly incorporated into a will or trust deed (alternative to drafting lengthy and technical administrative clauses in body of document itself)
Can be incorporated by reference
What is a letter of wishes, are they legally binding, and do they form part of will?
- Sets out how testator would like Ts of estate to manage discretionary powers
- Not legally binding, only guidance
- Do not form part of will
