Wills: Drafting, Construction, and Gifts

Question 1

what are the 2 general types of clauses under a will?

Answer 1

(1) non-dispositive clauses = do not deal with distribution of assets

(2) dispositive clauses = deal with how assets are to be distributed

Question 2

what are the 6 types of non-dispositive clauses?

Answer 2

(1) commencement

(2) revocation clause

(3) burial and funeral wishes

(4) appointment of executors and trustees / guardians

(5) administrative clauses

(6) date and attestation clauses

Question 3

what is a commencement clause?

Answer 3

• identifies the testator by all names they are known by and address
• example= I am [FULL NAME] of [address] [also known as [ALTERNATIVE NAME]]. This is my last will and testament disposing of [all my worldwide assets or only my assets in England and Wales or all my assets except my assets in [named country]].’

Question 4

T is known by another name or holds assets in another name - what do you do?

Answer 4

identify testator by all names and aliases they are known by in the commencement clause

the grant of representation must refer to each name T is known by otherwise it causes delays in administering estate

Question 5

are burial and funeral wishes in will binding?

Answer 5

not legally binding on PRs but are usually followed - morally binding

Question 6

what is a revocation clause? is one required?

Answer 6

• a revocation clause states that all previous wills and codicils are revoked
• it is not required - but should be included as good drafting to avoid uncertainty
• if one is not included = the last will impliedly revokes prior wills and codicils only to the extent of inconsistency
• Example = ‘I revoke all former wills and testamentary dispositions and declare this to be my last will’

Question 7

appointing executors under the will

Answer 7

PRs can be appointed via will (executor) or appointed by court under rules (administrator)

scope of appointment can be limited by T - grant issued in their name will be similarly limited

Question 8

who can be appointed as executor?

Answer 8

any adult with mental capacity can be executor

Question 9

what is the maximum number of executors that can be appointed?

what can be done if the will names more than the maximum number?

Answer 9

Max 4 executors named in the will can apply for the grant and be named on the grant

if the will appoints more than 4 executors, then the first 4 to apply for grant are executors and the rest have ‘reserved power’ if vacancy arises before administration is complete - they can then apply for a grant of double probate

Question 10

what is the minimum number of executors required to act?

Answer 10

1 executor is enough but it is best practice to include 2 if one cannot act

1 executor is enough even if there are minor interests (because parent/guardian can give good receipt or executor can appoint trustees for the trust) or life interest trusts in the will

BUT where the will creates a trust then 2 trustees must act - although the will does not need to appoint them as they can be appointed by the executor when the trust is set up

Question 11

types of executors that can be appointed (6)

Answer 11

1) trustees of testamentary trusts

2) Law firm (partnership)

3) LLP named as such

4) trust corporation named as such

5) professional executors

6) guardians expressly appointed for minor children

Question 12

how is the appointment of a law firm partnership as executor best drafted?

Answer 12

• Name the partnership and possibly all the partners instead of specifically named partners (as they may not work at the firm in the future).
• Draft it to consider that the firm may change its name, merge with another firm, or convert into an LLP or company
• example = I appoint the Partners at my death in the firm of [NAME OF FIRM] of [address]. However, I want no more than [one OR two OR three OR four] of the Partners to apply for a grant of probate of this will. The reference to [NAME OF FIRM] includes any firm that has succeeded to, or is carrying on the practice of, [NAME OF FIRM] at my death (including a firm that has been incorporated or formed a limited liability partnership).

Question 13

can executors charge for their services?

professional vs lay

Answer 13

• professional executors = can charge for their time only if there is another PR and all other PRs give written consent but if there is an express charging power then no need for PR consent
• lay executors = cannot charge for their time unless there is an express charging power in the will (or they obtain consent of all Bs but all Bs must be adults with capacity to give consent

Question 14

executors/trustees - what powers can a testator include?

how do these interact with the statutory and common law powers?

Answer 14

T can include express powers in the will

these override default statutory / common law powers to the extent of discrepancy

Question 15

what is the difference between the role of a trustee and a role of an executor under a will?

Answer 15

executor = administers the estate - once they have distributed the assets, their task is complete

trustee = responsible for the management of any trusts that continue following administration - this role continues for as long as the trust is in existence

Question 16

why must the drafter consider including a trustee or giving the executor trustee powers?

Answer 16

(1) if the testator wants to create express trusts in the will

or

(2) if any trusts might arise in the future because:
- there are minor interests (in case no parent / guardian is available to provide good receipt)
- there are contingent interests
–> so the gifts will need to be held on trust until they can be distributed which may be after the administration of the estate ends

Question 17

if an executor is not appointed in a will, who will act as PR?

Answer 17

the Non-Contentious Probate Rules will determine who will act as administrator

Question 18

is dating will required?

Answer 18

• NOT required but always advisable to prevent confusion
• usually at the end of the will in attestation clause or in commencement clause

Question 19

is there a requirement as to where the testator must sign the will?

Answer 19

no - but it is best practice to sign at the end of the will to satisfy the requirement under s9 that it appears that the testator intended by his signature to give effect to the will

Question 20

what is an attestation clause?

is it required?

what is the benefit? (2)

Answer 20

• attestation clause = describes circumstances under which the will was executed
• Not required for validity
• Benefits = a properly drafted attestation clause

1. raises a presumption that the will was executed in accordance with s9
2. helps prove knowledge and approval when it is not presumed (T is blind, illiterate, unable to sign) = wording of clause must state that witnesses attest that T had knowledge and approval at time of execution

==> if attestation clause is poorly drafted get an affidavit of due execution from witnesses

Question 21

general dispositive clauses (4 types)

Answer 21

order of clauses =

(1) specific gifts (non-money)

(2) general gifts

(3) pecuniary gifts

(4) residue

Question 22

what is a specific gift?

how should it be drafted so that it does not fail?

Answer 22

a gift of a specific item owned by T at the date of death

it must be drafted precisely to distinguish it from other items - otherwise gift will fail for uncertainty

a substitute can be included if the original gift fails

example: “I give to [x] absolutely my Stradivarius violin or such other violin that I own at my death which I keep in my safe”

Question 23

when will a specific gift fail? (3 ways)

Answer 23

• If T does not own the item at death anymore and does not include a substitute
• If T replaces the specific item and does not include a substitute or provision for replacement assets
• if the subject matter is uncertain for not being specifically described and distinguishable from other items

Question 24

gifts of collections - how can they be validly drafted? (2 ways)

Answer 24

1. the collection must be distinguishable from other similar items (e.g., ‘my dressing up clothes’ void for uncertainty as there is no way to distinguish from other clothes)
2. must provide a mechanism to divide the collection if gifted to more than one person, by when this must be decided, and how failure to agree should be resolved (e.g., to be divided between them as they choose, and if they do not agree by the first anniversary of my death, then my trustees decide)

Question 25

specific gifts of land - what are the considerations and requirements for drafting? (8)

Answer 25

1) properly identify the land (address and title number)

2) state what happens if T no longer owns the property at death

3) sever a joint tenancy (as JT property do not form part of the succession estate)

4) check for third party interests (tenants)

5) advise T on tax and RNRB

6) if property has a security or mortgage - will T discharge soon? will residue be used to discharge?

7) if land is left to more than one person, how will beneficial ownership be held?

8) if trust is made, 2 executors/trustees must be appointed

Question 26

specific legacy vs general legacy - what is the difference in drafting and will it fail if property not owned at death?

Answer 26

specific legacy =

• ‘I gift my painting’
• fails if painting not owned at death and B gets nothing
• identified on date of execution

general legacy =

• ‘I gift a painting’
• property not distinguished from other similar property
• if painting not owned at death, PRs must buy the property

Question 27

how is a gift of shares drafted and construed?

Answer 27

• gift of a collection = construed as at date of death (even if ‘my’ is used)
• can be a general gift of shares (requiring PRs to buy if T no longer owns at death) or a specific gift of shares (gift fails if T no longer owns at death)
• must be drafted to consider dividends accruing at date of death
• example = I give free of tax to [x] all my ordinary shares in ABC Plc standing in my name together with all dividends already accruing at my death

Question 28

what is a demonstrative gift?

Answer 28

general legacy that the will directs must be paid from a specific fund

will not fail if there are insufficient assets in the specified fund, B must be paid the balance as a general legacy

if fund does not exist at death, B must receive the gift

Question 29

what is a pecuniary gift?

how must it be drafted?

Answer 29

a gift of money

must be drafted to include both the number and amount in words

Example: ‘I give to [x] the sum of five hundred pounds (£500) free of tax and absolutely’

Question 30

what is a residuary gift?

Answer 30

• gift or trust of the ‘Trust Fund’ = defined as all the assets capable of passing under the will which have not already been disposed of under the will or a later codicil, or used to pay debts and funeral and testamentary expenses.
• if earlier gifts in the will fail, the subject matter passes under the residue
• If clauses disposing of the residue are not properly drafted and fail, there may be a partial intestacy (so include a substitute and/or gift over)

Question 31

how can you avoid a gift of the residuary failing? (3 ways)

Answer 31

• put a substitution clause
• use an ultimate gift over clause = T specifies who the estate should pass to if all other gifts fail (e.g., charity)
• avoid giving separate parts of the residue

Question 32

when is the subject matter identified at for purposes of construing the will?

Answer 32

• the will speaks from the date of death - subject matter is identified as at date of death
• unless contrary intention is shown
• example: ‘I gift MY car’ / ‘I gift the car I own AT PRESENT’ –> speaks from date of execution - if T does not own the car at death then gift fails and B gets nothing

(general vs specific legacy)

Question 33

when are items that comprise a collection identified?

Answer 33

at date of death - even if they were acquired after execution and even if T used ‘my’

example: ‘I gift my shares in ABC Plc’ - but T sells then sells and buys more shares in ABC Plc –> the shares owned in ABC Plc at date of death are part of the collection

Question 34

how is a general gift of chattels construed?

Answer 34

gift of chattels generally is a gift of a collection

identified as at the date of death - includes chattels bought after execution

includes all other chattels not disposed of by specific gift

Question 35

at what point are people / beneficiaries identified when construing the will?

Answer 35

people are identified at date of execution

• T must expressly state if they want to include people not born at execution - example: to my grandchildren as at the date of my death
• otherwise, class closing rules apply - class closes when first beneficiary obtains a vested interest
• if codicil is later made, people are identified at date of the codicil (it republishes the will)

Example: ‘I gift x to my nurse’. If the T later changes his nurse, the nurse as at the date of execution still inherits. But if T later publishes a codicil after changing nurses then the nurse as at date of codicil inherits.

Question 36

how is IHT deemed to be paid when construing the will?

i.e., where is IHT paid from?

Answer 36

a gift is made free of IHT - IHT is paid from the residue

unless contrary intention is shown and T states the gift is made ‘subject to tax’

Question 37

which funds are used to meet costs of upkeep and transfer of a gift?

Answer 37

costs paid from the gift itself (gift is made ‘subject to expenses and costs’)

unless T shows contrary intention - states gift is made ‘free of expenses’

Question 38

if a gift is subject to a security, how is this construed?

Answer 38

B inherits the property subject to the charge/ mortgage

Unless T expressly relieves the property from the charge in the will - can state the debt is repayable from the residue

Question 39

if there is a general direction in the will to pay debts and expenses from the residue, does this direct that securities over property are discharged using the residue?

Answer 39

No - if T wants to gift a property free of security, there must be a specific direction that this security be discharged from the residue

a general direction to pay debts and expenses from the residue is not enough

Question 40

if 2 people die at the same time and it is uncertain who died first, what is presumed?

is the position different for purposes of succession vs IHT?

Answer 40

the older predeceases the younger for the purposes of succession

BUT

they are deemed to die simultaneously for the purposes of IHT

Question 41

when can the court decide on how the will is construed?

can the court vary terms in the will when construing?

Answer 41

the court can decide on how a will is construed where:

• will is ambiguous or unclear
• language used is ambiguous
• surrounding circumstances make the will ambiguous

the court must:

• give effect to T’s intention above all
• determine intention only by the words of the will
• extrinsic evidence CANNOT be used to vary or contradict the will - only to help in construing the will

Question 42

what are the class closing rules when making a gift to more than one beneficiary?

Answer 42

if T makes a gift to a class of persons without identifying each by name, class closing rules apply unless T defines when the class closes (e.g., as are alive at my death)

class closing rules = a class of beneficiaries is determined and identified when any one member of the class first obtains a vested interest in possession

this could be with a contingency eg, to each of my grandchildren who reach 21 = when the first grandchild reaches 21, the class closes and all existing grandchildren are beneficiaries with entitlement to the gift

Question 43

‘I give 300 absolutely to each of my grandchildren alive at the date of my death and who reach the age of 21’

If, at date of death, there is a grandchild who is 23 and others who are under 21, what is the effect?

Answer 43

The class closes at date of death because there is someone who obtains a vested interest in possession as they satisfy the contingency

the rest of the grandchildren alive when the class closes (at date of death) have a contingent interest until they reach 21

Question 44

vested vs contingent interest

what is the difference?

what is the effect of each if the beneficiary dies?

Answer 44

vested interest = gift vests if it is given outright and absolutely and there are no conditions which must be met

–> if B dies = their interest passes under B’s estate - even if they are a minor and die before 18 (unless B dies before T) AND even if B’s interest has not vested in possession yet (unless life tenant)

contingent interest = B will have to satisfy a condition before obtaining a vested interest (eg, surviving T, age contingency)

–> if B dies before their interest vests = their interest does not pass to their estate

Question 45

can gifts be given to a minor under the will?

Answer 45

yes - the minor will have a vested interest in a gift unless the will states a contingency

however, minors cannot give good receipt

SO:

• the gift will be held on trust until the minor becomes 18

OR

• a parent/guardian can give receipt on the minor’s behalf (so no trust is created)

but note: 16-17 y/o can give good receipt if the will expressly allows this so they can get the interest straight away

Question 46

if a beneficiary under a will dies before the testator, does their interest pass to their estate?

Answer 46

no - if B dies before T the gift to B will lapse

the whole gift will fail unless there is a substitution

Question 47

if T makes a gift to their issue, and their issue dies before T but leaves issue of their own, what happens?

Answer 47

• s33 = If T makes a gift to T’s issue, and T’s issue dies before T dies but has issue of their own who are alive at T’s death, the gift to T’s issue is shared equally between the issue of the dead beneficiary (no contingency to satisfy under s33 unlike intestacy rules)
• this is unless s33 is expressly excluded OR contrary intention is shown OR there is a substitution clause already in the will for that gift
• it is preferable to also include an express substitution clause if s33 is the outcome that T wants
• s33 only applies to pre-deceased Bs who are issues of T (children) - not anyone else
• issue = children (adopted + conceived but not yet born) but not stepchildren

Question 48

Gifts to charities -

how should it be properly drafted?

what is the effect of the cy-pres doctrine?

Answer 48

drafting:

• express provision must be made for who can give receipt for the gift
• state the name, registered charity number, address
• make provision if it subsequently changes name, merges, or ceases to exist
• make provision for cy-pres doctrine by drafting a gift over to a different charity with a similar purpose if the original gift cannot be given effect

Example = I give £5,000 (five thousand pounds) to AGE UK SURREY, (registered charity number 1036450) of Rex House, William Road, Guildford, Surrey for its general purposes and I direct that the receipt of the treasurer or other duly authorized officer shall be a sufficient discharge to my Trustees. If, at my death, the charity named in clause 4 (Original Charity) no longer exists or is being wound up, my Trustees must pay the amount specified in clause 4 as being payable to the Original Charity to another charity that has objects similar to the Original Charity

Question 49

can a document be incorporated by reference in a will?

what are the requirements? (3)

Answer 49

yes

• requirements =

1. document MUST EXIST when the will is executed (or at the time a codicil is made b/c codicil republishes a will) = cannot be written after the will is executed!
2. will must refer to the document as being in existence at the time of execution
3. document must be clearly identified in the will

• this external doc does not need to be validly executed like a will (but will be made public as part of the will when admitted to probate)
• examples of docs = schedules of possessions or lists of beneficiaries in a document not included in the will or STEP provisions

Example of clause = ‘I leave my collection of antique dolls to each of the people named in the list now to be found in my safe’

Question 50

incorporating STEP provisions

what is STEP?

Answer 50

STEP = prof association promoting best practice for drafting wills and administration of estate

STEP has a set of recognised administrative powers that are commonly incorporated into a will/trust deed to avoid lengthy drafting

STEP provisions (an unexecuted document) can be incorporated into a will or trust deed by reference

Question 51

letters of wishes

what are they?
must they be followed?

Answer 51

Letters set out how the testator would like the trustees of the estate to manage their discretionary powers

NOT legally binding and merely serve as guidance

Letters do not form part of the will (or trust created under it) and there is no intention for these documents to be incorporated into the will (not made public)