Wills & Trusts Flashcards
What ISN’T included in an estate for distribution purposes =5
1) Jointly owned property - this passes under survivorship. Joint tenants on the other hand are severed immediately before death for tax purposes
2) Insurance policies written into trust
3) Discretionary pension schemes
4) Statutory nominations
5) Trust property under provisions on trust - unless in the interest in remainder so may pass under terms of will
Then admitted to probate - approved by probate registry and a grant of probate issued
What are the 3 formalities of a will
1) Formalities
2) Testamentary capacity
3) Intention
Formalities of a will =
What are privileged wills =
1)
- s9 Wills act
- Must be in writing - pencil alone not valid
- must be signed - can be mark or monogram, thumb print or even rubber stamp, can be initials or incomplete signature - key point that they intended to be a signature.
-or signed by some other person in his presence and at his direction and with the testator present.
- testator intended to give effect to the will - usually by signing at the end, but s9(b) states if sign elsewhere may still be valid if signature and provision written at same time.
- must be in presence of 2 witnesses - both present at same time
- Each witness must attest and sign the will - attest means bear witness to a fact- attestation clause will confirm this
- if blind - attestation clause includes that will read to testator and confirmed contents - this will lead to presumed due execution
- unexecuted documents CAN be incorporated in will if identified in will and were in existence at time will executed.
- Witness signing will cannot benefit from it - unless 2 additional witnesses or marries testator after will
- witness does not need to know contents of will
2)
Privileged wills = made by members armed forces, active service or sailors at sea - can’t sign if in combat so exception to rule
Testamentary Capacity =
1) Rule in Parker v Felgate
2) Common law rule in Banks v Goodfellow - 3 questions
3) Test in Mental Capacity ACT 2005
- must be over 18 unless privileged - armed forces
1) - Rule is that testamentary capacity MUST be present at time of EXECUTION of will. The EXCEPTION to this is the rule in Parker v Felgate that IF capacity was there when gave instructions and will prepared in accordance with these and testator understands signing will in accordance with these - even if they can’t be remembered - then there is sufficient capacity on execution - Delusions do not effect capacity
2) Banks v Goodfellows
- must understand nature of making a will and its effects
- must understand extent of property
- must understand moral claims to which they ought to give effect- eg consider all should have.
2) SS1-3
- person lacks capacity in relation to a matter if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of the mind or brain
- unable to make a decision because
a) can’t understand information relevant to the decision
b) to retain information
c) to use or weigh that info as part of the process of making the decision, or
d) to communicate his decision - talking, sign language or other means.
1) intention requirement for a will -
2) When is it presumed?
3) When is it not presumed and what difficulties can arise from presumption
1) - Must have an intention to form a will - not just a gift and intention to make actual will they signed
Do not confuse capacity with intention
2) If test in capacity found - no challenge to will
- can have intention at time instructions given and then lost. Intention will be found if rules in Parker v Felgate found.
3)
- When blind or illiterate, or suspicion ie where will benefits person who drafter it for testator.
- where it is believed the will has been made and:
a) vulnerable - particularly elderly- and will induced or forced
b) duped or manipulated
- can challenge and must prove on balance of probabilities, if proved Will not valid.
- unlike other areas of law no presumption of undue influence available
must try to see testator on own and if can’t make sure full notes taken**
Personal Representatives - Executives & Administrators’
1) What are they, how appointed, how many, what if 1 and can’t act
2) Who can and can’t be a PR
3) What are their responsibilities
1) -
-EXECUTIVES - appointed within a will to administer and distribute estate and assets as per will
- cannot volunteer, appointed within clause in will
- exception to this is where solicitors appointed as executors so partners can change.
-Minimum 1 and max 4
-Where 1 and they can’t act. 2 options=
1) 1 executor - refusing to act = person who would first be appointed as administrator can apply for citation under s112 forcing reluctant executor to state if will or won’t act, if won’t falls to next executor, or administrator
2) if all die - appoint administrator in accordance with rule s112 applies.
- ADMINISTRATOR - they also administer and distribute estate but there is no will to appoint them, or will not found to be valid.
- Administrators appointed as per rule 22(1) which sets out which relative can and can’t be PR and order- first spouse/civil partner, then children, then father and mother, whole blood brothers and sisters etc
- If there is a will administrators appointed under rule 20 NOT 22
2) Who can and can’t be
- U18 can be executor but can’t apply for grant of rep
- Yes - Bankrupt
- Yes - crim record
- Mental capacity issues - yes - some
- Yes - legal personality
- Yes - professional - will be paid
3) - To:
- identify and collect assets
- duty to distribute assets
- duty to apportion income
- must produce proof of title of asset - grant of representation
1) What happens if no one found to inherit?
2) Can Executor and Administrator renounce, reserve their role
3) what is executor de son tort?
1) - Bona Vacanta - means no person found to inherit estate - will or intestacy- crown can claim estate
2) Yes - Renounce
Executor & Administrator
- Executor doesn’t know when appointed so can renounce by sending written statement with probate registry as soon as possible, administrator appointed can renounce by same means
- NEITHER CAN RENOUNCE if INTERMEDDLED with estate - as agreed to act
Yes - Reserve
- only if more than one executor or administrator, the other then effectively sits on the bench
** If only POTENTIAL administrator then can withdraw no need to renounce
3) acting as though they are an executor when they are not - Executors appointed by terms of will. If starts to gather in assets they then become personally liable for any assets they have intermeddled with
What are the key statutory powers of a will x 7
1) - maintenance - education
2) - advance capital
3) - To insure - eg trust property
4) - Apportionment - to satisfy legacies and interests of estate
5) - Invest - broad discretion- honestly with honest prudence
6) - Remuneration for services - professionals
7) - assets used to meet liabilities, order
-Property not disposed of by will
-Property in residuary gift
- Property given to pay debts
-Property charged with payments of debts
-pecuniary legacy fund
- rateable deduction from each specific property gift and
- Property under general power of appointment
All can be modified by the will
Can PR’s be D/R for breach of duty
-Yes
- personally liable for loss to creditor or beneficiary
- Main forms = maladministration, misappropriation of property, and negligence
- S1 Trustee Act 2000 - duty of care - must exercise such care and skill as reasonable.
- where several executors cannot be vicariously liable - unless know or should have known of others breach and failed to prevent
- CTS can relieve PR’S IF - acted honestly and reasonably. - s61 Trustee Act 2000
What happens where PR’s fail to distribute estate? 2 scenarios
Whose responsibility is it? Beneficiary to respond or PR to find
fail to distribute estate to unknown beneficiaries =
-PR’s personally liable where don’t distribute to entitled beneficiaries which didn’t know about - ie child of testator not known about. If doesn’t take following steps will be liable
*Under s27 TA 1925 must advertise in London Gazette- after 2 months can distribute
* must make other reasonable enquiries
*DON’T PROTECT PR IF in relation to debts liabilities of which they were aware
Fail to distribute estate to known but missing beneficiaries =
- PR’s liable where can’t be found but haven’t taken following steps and beneficiary then turns up.
* Can apply to court for Benjamin Order which allows PR to distribute estate, presuming deceased. If beneficiary turns up PR will then not be liable, claim with be against beneficiaries who received their share
*Insurance cover against risk of beneficiary reappearing.
* Indemnity- can seek from known beneficiaries. If beneficiary appears PR is liable BUT can recover from beneficiaries.
*Reserve fund/payment into court - can set aside reserve fund or pay amount into court - NEGATIVE is PR court keep funds indefinitely
-It is PR’s RESPONSIBILITY they must search and exhaust options may appoint private investigator or genealogist
Can a will be altered or amended?
- YES before the will is executed - provided executed as per wishes
- After execution by:
CODICIL - additional legal document after the will is executed, annexed to will & read with it
- new clause
- dependant on will, taken with will deals with testators estate.
- In effect republished will
Yes -
- general rule is amendment will be invalid, unless meets requirements
-after will is executed in accordance with wills act, and amendment meets requirement’s.
- where impossible to read what was in original will
What are the basic rules in respect of any amendments made to a will under s21 Wills act
- must be signed by testator and 2 witnesses (or initials) in margin next to amendment. If done presumption is changed prior to execution of will.
- if alteration in pencil- NOT VALID
- unsigned alterations - subject to presumption made after execution and therefore invalid
- If original wording of will visible and amendment not signed- original wording valid
- If original wording obliterated and cannot be seen, that clause is read as blank - so in effect testator gets their way even if not signed
EXECPTION to this is - if obliterated and efforts of substitution made the conditional revocation rule will apply. it is ineffective UNLESS original wording can be seen COURT WILL consider evidence to establish original wording including copy of original will
Can you revoke a will?
YES
- if testator has capacity
- can be absolute or conditional
- if conditional revocation does not take effect until condition met
- revocation of will does not effect a codicil
What are the 4 ways in which you can revoke a will?
1) - Marriage or civil partnership s18(1) - automatic revocation. EXCEPTION = in expectation of marriage, must be particular person cannot be generally
2) - Another will or codicil s20 - new will must include revocation clause. If no revocation clause courts reluctant to revoke BUT if no other logical conclusion to come to except that the testator intended Will 2 they will revoke in full or part Will 1
3) By some writing- Can be on any document as long as all formalities under s9 complied with. No witnesses - fails
4) By destruction - fully destroyed - tearing burning or otherwise by T or in T’s presence. If conditional - not destroyed until condition met
- destroyed with intent for new will to be valid & then new will not valid, then old destroyed will remains valid - doctrine of dependant relative revocation
- if part destroyed? - condition considered - vital parts - total destruction, some parts destroyed = only than part revoked.
- If cannot find - presumption destroyed W/I. Is a rebuttable presumption if can provide contrary evidence and contents proved from copy of draft.
How does marriage affect a will
x4
1) -MARRIAGE
- Marriage, civil partnership revokes any previous will
- clause in expectation of marriage to particular person prevents revocation
- can make conditional on marriage and if doesn’t happen will revoked
2) SEPERATION - sperate but no divorce- will remains
3) DIVORCE
- partially revokes will
- partial revoke applies where annulment or dissolution of civil partnership
- takes effect as if spouse predeceased, legacies ineffective, and appointment of executor fails
- decree absolute removes appointment of spouse as testamentary guardian of child. DOES NOT effect former spouses parental rights, if natural or adoptive parent.
4) VOIDABLE MARRIAGE
- revokes like marriage
- BUT in effect never happened so doesn’t impact.
1) What are the 6 types of gifts that can be made in a will?=
1)
a) - Specific gifts/legacy
b) - General legacy/gift
c) - Pecuniary legacy/gift
d) - pecuniary legacy/gift
e) - residuary legacy/gift
f) - devises- gift of land
Specific legacy/gift=
- particular item or items separated off to give to particular person
- “I give all my…” will suffice
General legacy/gift =
- gift of item irrespective of whether deceased owned that item at death eg 50 shares in XXX to x
Pecuniary legacy/gift=
- Fixed sum of money
- gifts of annuities can also be demonstrative legacies
Demonstrative legacy/gift
- Usually pecuniary out of particular fund
- if not enough in that fund executor can take from another account
Residuary legacy/gift
- whole or part of estate after gifts, debts, taxes and other costs paid
Devises - gift of property=
- can be specific or general - “i give all my land…
- can be residuary devise - “rest of land not disposed of by my will”
