Wills, Intestacy & POA Flashcards
What are the names given to the the person whom makes the Will and the people who administer the Will?
Testator (Person who makes the Will) Executors (Administer the Will)
Can a Beneficiary also be an Executor?
Yes
How many people must witness the signing of the Will?
Two
What 3 criteria must be met by a Testator?
- Must have mental capacity
- Must not be under duress
- Must be 18 or over
Witnesses have to witness the Will being signed, what else do they have to do?
Sign it themselves
What happens if a Beneficiary Witnesses the Will?
The Will wont be invalid but the Beneficiary cannot inherit under the Will.
What are the 4 criteria that can lead to a Will being Revoked?
- Marriage or re-marriage (unless the Will makes reference to a forthcoming marriage)
- The making of another Will
- Deliberate destruction (the intention to revoke a Will)
- Declaration by the Testator that the Will is revoked
What is one particularly important factor for the Testator when revoking a Will?
That they retain Mental Capacity.
When a Will is revoked by making another Will, what should be stated in the new Will and what process would help?
That the previous Will is revoked and the dating of Wills would help in evidencing which is the new Will.
Divorce does not revoke a Will, but what is the treatment of the Ex-Spouse/CP and what document must have been produced?
They are treated as having died from the date of The ‘Decree Absolute’ document.
Describe a situation where a Divorced Beneficiary can still benefit under a Will?
Where the Will specifically states that it will disregard any divorce.
How can a Testator replace an Executor?
By making a new Will or a Codicil
What is the document called that allows the Estate to be distributed? And what has to be settled before this document is issued?
A Grant of Probate. Any Inheritance tax due must be settled.
If an Executor is unable or unwilling to Act, what happens then?
A Court or the Probate Registry will appoint an Administrator
What is the role of an Executor?
To distribute the Estate in accordance with the Wishes of the Testator
Provide a description of Mirror Wills
Where two people generally want to make similar Wills, leaving their assets to each other and then Children.
What action can a Spouse/CP take if their Partner had previously amended the Mirror Will without their knowledge?
They too can amend their Will and take Legal action against their Partner/Ex Partner
What is a Codicil used for and what process must be followed when making one?
It is for small changes to a Will, major changes would require a new Will. It must be witnessed by at least 2 people.
What is a Statutory Will?
A Will made by the Court of Protection for somebody who lacks Mental Capacity.
Who will the Court of Protection consult when making a Statutory Will?
Anyone who may be affected.
Under Intestacy, what is the document called that authorises the Administrator to distribute the Estate once IHT has been settled?
Letters of Administration
According to Intestacy how will and Estate be distributed if there is a Spouse/CP and Children (Issues)?
- First £250k to Spouse/CP
2. Residual is split 50% to Spouse/CP and 50% to Children
What if their are no Children (Issues)
Everything to Spouse/CP
What if there is no Spouse/CP but Family members?
- Children
- If none, Grand Children
- If none, Parents
- If none, Siblings
- If none, Grand Parents
What does the Term ‘Children’ also include?
Adopted Children
What happens under Intestacy if there are no relatives?
It passes to the Crown
What two types of assets do the rules governing Wills and Intestacy apply to?
- Solely owned Assets
2. Assets under a Tenants in common basis
What happens to Jointly owned Assets?
They automatically pass to the Survivor regardless of a Will or Intestacy rules
What is the main difference between a disclaimer and a deed of variation?
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)
What must be paid by the executors or personal rep’s before the Estate is distributed?
Any outstanding income tax, CGT or NI debts before death
How is income received by the Estate after death treated?
Taxed at basic rate with no personal allowance
How does the Estate deal with CGT concerning disposals during the deceaseds lifetime and uncrystalised gains?
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.
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
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.
The CGT treatment of assets transferred to a beneficiry after death?
No CGT
Losses made by the rep’s of the Estate can be offset against gains made by the deceased before death. True or False? Explain
False - they can be offset against gains made by the personal rep’s after death
If the deceased made a loss in the year of death, what is the order of gains it can be offset against?
Gains in the year before death first, if this is not possible then the 3 previous tax years
If a rep of the Estate fails to claim a tax repayment, what can happen?
They may be personally liable and have to pay the Estate to compensate
Is a Mirror Will one Will or two and can it be amended?
They are still two separate Wills and can be amended by each Testator.
How are assets valued for CGT when being transferred to a Beneficiary after death?
assets treated as having a market value as date of death/probate
Name 3 criteria that are the same for both a Deed of variation and a disclaimer?
- Must be executed.put in writing no more than 2 years from the date of death
- Cannot be in consideration for money or moneys worth
- Must be affected for the purposes of IHT as if the deceased had made it or as if it had never been received
Which 3 sources of gift can be disclaimed and varied?
- Will
- Intestacy
- Trust
List 5 powers of the Court of Protection
- Decide whether someone has the mental capacity to make decisions for themselves
- Make decisions/orders on matters of welfare and property/finances for people who lack capacity
- Appoint Deputies where there is no LPA/EPA in place
- Remove attornies/deputies who fail to carry out their duties
- Deciding whether an LPA/EPA is valid
