Wills and Administration of Estates Exam Bundle (Revision Notes).
High distinction achieved in WAE and in LPC course overall.
Useful for open note exams to quickly consult topic area as well as to memorise for closed note.
Exam Structures usefully highlighted.
SECTION A – DISTRIBUTUON OF A PERSON’S PROPERTY ON DEATH
Learning Outcomes:
- Identify what property passes outside of a person’s succession estate and not by their
will/and or intestacy.
- Explain through worked examples how the property in an intestate or partially intestate
estate will be distributed on death.
- Appreciate in general terms the content and format of a simple standard will
- Explain the requirements for making a valid will and codicil and
- Explain how wills and codicils can be revoked and the effect of alterations of wills and
codicils.
GENERAL RULE
Person dies, need to consider two key issues before you can ascertain how and to whom their estate
will pass:
- Whether the deceased died testate or intestate.
- Nature of the assets owned by the deceased – known as succession/distribution estate.
1.Testate/Intestate
Person who makes a will is called a testator.
- If the deceased makes a valid will they have died TESTATE.
- If the deceased has died without a valid will they have died INTESTATE.
o In this case, statutory provisions in the Administration of Estates Act 1925 (AEA) as
amended by the Inheritance and Trustees Powers Act 2014 apply.
- If the deceased has made a partially valid will but the terms do not dispose of ALL of the
succession estate, the deceased has died PARTIALLY INTESTATE.
2. Identifying the succession estate
Person’s succession estate comprises all of their assets which pass by either a will or the intestacy
rules.
- Succession estate passes not into the hands of the deceased personal representatives
(legally responsible for administering estate).
- Out of the succession estate, the PR pay deceased debts, funeral and other administrative
expenses.
- Remaining assets distributed according to order of priority under the intestacy rules or the
terms of the will.
To identify what assets comprise the state for succession purposes – easier to identify property that
is EXCLUDED – if it is not excluded it is in the succession estate.
,Excluded assets from the succession estate:
1. Property held as joint tenants
2. Insurance polices written in trust
3. Pension benefits
4. Statutory nominations
5. Donatio Mortis Causa (DMC)
6. Trusts/Settlements
1.Property held as beneficial joint tenants:
- Beneficial joint tenants: property will automatically pass to the remaining joint tenant(s) on
death by virtue of survivorship.
- Tenants in common: deceased’s share will form part of their succession estate.
2.Insurance policies written in trust:
Possible for a person to take out a life assurance policy of his own life.
- Policy holder pays a monthly sum (premium) to the policy provider.
- Policy provider pays a lump sum to the deceased’s estate when they die.
- Value of lump sum agreed when insurance taken out.
As the insured person cannot enjoy the money, these policies are written in trust – insured person
nominates a third party to inherit the lump sum. They are paid directly when the death certificate is
presented to the insurer.
IF A POLICY IS WRITTEN IN TRUST THE POLICY PROCEEDS DO NOT FORM PART OF THE DECEASED’S
SUCCESSION ESTATE.
3. Discretionary Pension Schemes/ Lump Sum Pension Benefits:
Terms of some pension schemes OBLIGE pension fund trustees to pay out a lump sum of money
following the death of the person who held the pension.
- If this amount is payable to the PRs, money forms part of the deceased’s succession
estate.
- If the deceased had nominated a 3rd party to receive the lump sum + the money is binding
on the trustees, the money is paid directly upon presentation of the death certificate and
does not form the succession estate.
Other pension schemes:
- Pension fund trustees may have DISCRETION to make a lump sum payment following death.
- Deceased indicates during lifetime who should receive the money if the trustees exercise
their discretion.
- Lump sum paid to third party will not form part of the deceased’s succession estate,
instead passing directly to the third party.
4. Statutory nominations
Can make a statutory nomination in writing to transfer ownership on death of sums of money held in
certain friendly society bank accounts (limited to £5000)
, - Nominated beneficiary receives the money and the will or intestacy rules do not apply.
5. Donatio Mortis Causa (DMC):
DMC = git made during the donor’s lifetime in contemplation of/conditional upon death of the
donor.
- Can recover the asset if you change your mind before death.
- Subject matter of a DMC does NOT form part of the succession estate.
6. Trusts/Settlement
INTESTACY
If a person dies wholly or partially intestate their succession estate (or part of it), will be
distributed in accordance with the intestacy rules.
WHO IS ENTITLED TO BENEFIT IN AN INTESTACY SITUATION FROM INTESTATE’S SUCCESSION
ESTATE + WHAT WILL THEY RECEIVE:
2 MAIN CATEGORIES OF BENEFICIARY = Spouse/Civil Partner + Issue
1.Distribution where an intestate dies leaving a spouse/civil partner and/or issue
Spouse/civil partner see intestacy flow chart.
- For a spouse/civil partner to inherit THEY MUST SURVIVE THE INTESTATE BY AT LEAST 28
DAYS (s 46 (2A) AEA).
- Civil partners – so long as a document is made on or after 13 March 2014, any reference to
marriage can also include marriage of a same sex couple.
Issue = means children and remoter linear descendants (includes legitimate, illegitimate and
legitimated (born to unmarried parents who later marry) and adopted children).
2. Distribution where an intestate dies without leaving spouse or issue
Intestate dies and not survived by a spouse or issue – statutory order of entitlement to the
intestate’s succession estate:
1. To parents but if none;
2. To siblings of whole blood (share both parents with intestate) on the statutory trusts but if
none;
3. To siblings of half blood (share one parent with intestate) on the statutory trusts, but if
none;
4. To grandparents but if none;
5. Uncles and aunts of whole blood (whole blood siblings of a parent of the intestate) on the
statutory trusts but if none;
6. Uncles and aunts of half blood on the statutory trusts but if none;
7. To the crown as bona vacantia
Siblings – amount available is divided equally between all members of that class.
, STATUTORY TRUSTS (s 47 AEA)
The terms of the statutory trusts are:
a) The share of the estate is held for any child/children of the intestate (in equal shares if more
than one) who survive the intestate and reach the age of 18 or marry earlier in order to
inherit. Until this requirement is satisfied a beneficiary has a contingent interest.
If a beneficiary is 18 or older (or married) when the testator dies they will inherit absolutely
and immediately as the contingency is already satisfied. Beneficiary therefore has a vested
interest.
AND
b) If an entitled beneficiary dies BEFORE the intestate that beneficiary’s children can inherit in
their place, provided the beneficiary’s children themselves reach the age of 18 or marry
earlier. Substitution limb of the statutory trusts.
SURVIVING SPOUSE RIGHT TO APPROPRIATE THE FAMILY HOME
An intestate’s surviving spouse has the right to have the family home appropriated to them.
- This right must be exercised within 12 months of the grant of representation (Schedule 2
Intestate Estates Act 1952)
- If surviving spouse exercises the right the PRS will use their powers under s 41 AEA to effect
the appropriation.
Normally, beneficiary cannot force the PRs to transfer (appropriate) a specific item from the estate
to them as part of their inheritance, BUT –
- Where the family home forms part of the succession estate (it was owned solely by the
deceased or held jointly as tenants in common).
- Surviving spouse can require the PRs to appropriate this to them as part of their entitlement.
- If spouse’s entitlement under the estate is worth less than the value of the property in
question, the spouse will need to pay the PRs the difference using their own funds –
ensure spouse does not receive more than entitled to.
BUT – if the deceased owned the family home as beneficial joint tenants the property does NOT
form part of the succession estate + instead passes via survivorship to the co-owner and not under
intestacy (so the above right would be irrelevant).
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