Wills, Intestacy & POA

Question 1

What are the names given to the the person whom makes the Will and the people who administer the Will?

Answer 1

Testator (Person who makes the Will) Executors (Administer the Will)

Question 2

Can a Beneficiary also be an Executor?

Answer 2

Yes

Question 3

How many people must witness the signing of the Will?

Answer 3

Two

Question 4

What 3 criteria must be met by a Testator?

Answer 4

1. Must have mental capacity
2. Must not be under duress
3. Must be 18 or over

Question 5

Witnesses have to witness the Will being signed, what else do they have to do?

Answer 5

Sign it themselves

Question 6

What happens if a Beneficiary Witnesses the Will?

Answer 6

The Will wont be invalid but the Beneficiary cannot inherit under the Will.

Question 7

What are the 4 criteria that can lead to a Will being Revoked?

Answer 7

1. Marriage or re-marriage (unless the Will makes reference to a forthcoming marriage)
2. The making of another Will
3. Deliberate destruction (the intention to revoke a Will)
4. Declaration by the Testator that the Will is revoked

Question 8

What is one particularly important factor for the Testator when revoking a Will?

Answer 8

That they retain Mental Capacity.

Question 9

When a Will is revoked by making another Will, what should be stated in the new Will and what process would help?

Answer 9

That the previous Will is revoked and the dating of Wills would help in evidencing which is the new Will.

Question 10

Divorce does not revoke a Will, but what is the treatment of the Ex-Spouse/CP and what document must have been produced?

Answer 10

They are treated as having died from the date of The ‘Decree Absolute’ document.

Question 11

Describe a situation where a Divorced Beneficiary can still benefit under a Will?

Answer 11

Where the Will specifically states that it will disregard any divorce.

Question 12

How can a Testator replace an Executor?

Answer 12

By making a new Will or a Codicil

Question 13

What is the document called that allows the Estate to be distributed? And what has to be settled before this document is issued?

Answer 13

A Grant of Probate. Any Inheritance tax due must be settled.

Question 14

If an Executor is unable or unwilling to Act, what happens then?

Answer 14

A Court or the Probate Registry will appoint an Administrator

Question 15

What is the role of an Executor?

Answer 15

To distribute the Estate in accordance with the Wishes of the Testator

Question 16

Provide a description of Mirror Wills

Answer 16

Where two people generally want to make similar Wills, leaving their assets to each other and then Children.

Question 17

What action can a Spouse/CP take if their Partner had previously amended the Mirror Will without their knowledge?

Answer 17

They too can amend their Will and take Legal action against their Partner/Ex Partner

Question 18

What is a Codicil used for and what process must be followed when making one?

Answer 18

It is for small changes to a Will, major changes would require a new Will. It must be witnessed by at least 2 people.

Question 19

What is a Statutory Will?

Answer 19

A Will made by the Court of Protection for somebody who lacks Mental Capacity.

Question 20

Who will the Court of Protection consult when making a Statutory Will?

Answer 20

Anyone who may be affected.

Question 21

Under Intestacy, what is the document called that authorises the Administrator to distribute the Estate once IHT has been settled?

Answer 21

Letters of Administration

Question 22

According to Intestacy how will and Estate be distributed if there is a Spouse/CP and Children (Issues)?

Answer 22

1. First £250k to Spouse/CP

2. Residual is split 50% to Spouse/CP and 50% to Children

Question 23

What if their are no Children (Issues)

Answer 23

Everything to Spouse/CP

Question 24

What if there is no Spouse/CP but Family members?

Answer 24

1. Children
2. If none, Grand Children
3. If none, Parents
4. If none, Siblings
5. If none, Grand Parents

Question 25

What does the Term ‘Children’ also include?

Answer 25

Adopted Children

Question 26

What happens under Intestacy if there are no relatives?

Answer 26

It passes to the Crown

Question 27

What two types of assets do the rules governing Wills and Intestacy apply to?

Answer 27

1. Solely owned Assets

2. Assets under a Tenants in common basis

Question 28

What happens to Jointly owned Assets?

Answer 28

They automatically pass to the Survivor regardless of a Will or Intestacy rules

Question 29

What is the main difference between a disclaimer and a deed of variation?

Answer 29

A deed of variation offers more flexibility in allowing the original beneficiary to choose who to pass the monies onto (effectively re-writing the Will)

Question 30

What must be paid by the executors or personal rep’s before the Estate is distributed?

Answer 30

Any outstanding income tax, CGT or NI debts before death

Question 31

How is income received by the Estate after death treated?

Answer 31

Taxed at basic rate with no personal allowance

Question 32

How does the Estate deal with CGT concerning disposals during the deceaseds lifetime and uncrystalised gains?

Answer 32

Any gains realised during the deceased’s lifetime (disposal) must be settled if not already, the annual exemption is available. Any CGT liable on uncrystalised gains is not payable on death.

Question 33

How does the Estate deal with gains and CGT realised after death? I.E sale of property which has increased in value since date of death or investments sold to pay an IHT bill

Answer 33

Gains will need to be declared and CGT is payable at 20% or 28% for residential property. The 16/17 exemption is available to the Estate and for a further 2 tax years.

Question 34

The CGT treatment of assets transferred to a beneficiry after death?

Answer 34

No CGT

Question 35

Losses made by the rep’s of the Estate can be offset against gains made by the deceased before death. True or False? Explain

Answer 35

False - they can be offset against gains made by the personal rep’s after death

Question 36

If the deceased made a loss in the year of death, what is the order of gains it can be offset against?

Answer 36

Gains in the year before death first, if this is not possible then the 3 previous tax years

Question 37

If a rep of the Estate fails to claim a tax repayment, what can happen?

Answer 37

They may be personally liable and have to pay the Estate to compensate

Question 38

Is a Mirror Will one Will or two and can it be amended?

Answer 38

They are still two separate Wills and can be amended by each Testator.

Question 39

How are assets valued for CGT when being transferred to a Beneficiary after death?

Answer 39

assets treated as having a market value as date of death/probate

Question 40

Name 3 criteria that are the same for both a Deed of variation and a disclaimer?

Answer 40

1. Must be executed.put in writing no more than 2 years from the date of death
2. Cannot be in consideration for money or moneys worth
3. Must be affected for the purposes of IHT as if the deceased had made it or as if it had never been received

Question 41

Which 3 sources of gift can be disclaimed and varied?

Answer 41

1. Will
2. Intestacy
3. Trust

Question 42

List 5 powers of the Court of Protection

Answer 42

1. Decide whether someone has the mental capacity to make decisions for themselves
2. Make decisions/orders on matters of welfare and property/finances for people who lack capacity
3. Appoint Deputies where there is no LPA/EPA in place
4. Remove attornies/deputies who fail to carry out their duties
5. Deciding whether an LPA/EPA is valid