BPP University College Of Professional Studies Limited (BPP)
FULL SET OF REVISION NOTES FOR WAE FROM WORKBOOK AND LECTURES
80% DISTINCTION
Includes:
- distribution of person's estate on death
- inheritance tax
- administration: application for a grant of representation
- administration of an estate: post-grant practice
Includes all calculatio...
BPP University College Of Professional Studies Limited (BPP)
BPP University College Of Professional Studies Limited
Wills & Adminstration Of Estates
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WILLS AND ADMINISTRATION OF ESTATES REVISION GUIDE
DISTRIBUTION OF PERSON’S ESTATE ON DEATH
DEFINITIONS
Probate estate: what passes by will
IHT estate: what is IHT chargeable
Testator: person who makes a will
Testate: the deceased has made a valid will and has died ‘testate’ terms of the will
determine who inherits the succession estate
Intestate: the deceased has died without making a valid will intestacy rules apply to
determine who inherits the succession estate and what each beneficiary receives
Partially intestate: the deceased has made a valid will but the terms of the will do not
disposal of all of the succession rate will is followed and any property that remains
undisposed of passes in accordance with intestacy rules
Identifying the succession estate
Succession estate: comprises all of their assets which pass by either a will or intestacy rules
- Passes into the hands of PRs who are legally responsible for administering the estate
- PRs generally pay deceased’s debts and other administrative expenses out of
succession estate
Types of assets which may be excluded from the succession estate:
Property held as joint tenants
o Joint tenants = property automatically passes to remaining joint tenant on
death by virtue of law of survivorship
o Tenants in common = deceased’s share will form part of their succession
estate
Insurance policies written in trust
o Insured person nominates a 3rd party (usually spouse or children) to inherit
the lump sum
o If the insurance policy is written in trust = does not form part of deceased’s
succession estate
Money is paid directly to the specified beneficiaries by insurance
company
Discretionary Pension Schemes/ Lump sum pension benefits
, o Oblige pension fund trustees to pay out a lump sum of money following the
death of the person who held the pension
o If amount is payable to PRs = money forms part of deceased’s succession
estate
o If deceased had nominated a 3rd party to receive lump sum and nomination is
binding on pension scheme trustees = money is paid directly to named
beneficiary and does NOT form part of deceased’s succession estate
Statutory nominations
o To transfer ownership on death of sums of money held in certain friendly
society bank accounts
o Nominated beneficiary receives money and will or intestacy rules do NOT
apply
o Limited to sum of £5000
Donatio mortis causa (‘DMC’)
o Gift made during donor’s lifetime in contemplation of, and conditional upon,
the death of the donor
o The donor may recover the asset should he change his mind before death
o Does NOT form part of succession estate
Trusts/settlements (do not need to know for LPC)
INTESTACY
Entitlement to the estate
1. Distribution where an intestate dies leaving a spouse/CP and/or issue
Issue: children and linear descendants
o Includes those who are: legitimate (born to married parents), illegitimate
(born to unmarried parents), legitimated (born to unmarried parents who
later marry) and adopted children
2. Distribution where an intestate dies without leaving spouse or issue
Statutory order of entitlement to intestate’s succession estate:
1. Parents, but if none
2. Siblings of whole blood (share both parents with intestate) on the statutory trusts, but if
none
3. Siblings of half-blood (share one parent with intestate) on the statutory trusts, but if
none
4. 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 (half-blood siblings of a parent of the intestate) on the
statutory trusts, but if none
7. The crown as bona vacantia (“ownerless goods”)
,Statutory trusts
Terms of statutory trusts:
(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 is satisfied, the beneficiary has a CONTINGENT interest
if a beneficiary is 18 or over when the testator dies, they will inherit absolutely
and immediately as contingency is already satisfied = 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
Surviving spouse’s right to appropriate the family home
An intestate’s surviving spouse has the right to have the family home appropriated
to them
Must be exercised within 12 months of the grant of representation
If the surviving spouse exercises this right, PRs will use their powers under s.41 AEA
to effect the appropriation
If family home was owend solely by deceased or as tenants in common = surviving
spouse can require PRs to appropriate this to him/her as part of their entitlement
o If spouse’s entitlement under the estate is worth less than the value of the
property = spouse needs to pay PRs the difference using their own funds
Statutory right does NOT allow spouse to receive the home as an additional gift
ensures that it is transferred to them so they can continue in occupation
If held as joint tenants = property does NOT form part of succession estate and
passes via survivorship to surviving co-owner and not under intestacy
WILLS
Validity of a will – requirements:
Unless the testator has privileged status he or she must be 18 or over. To make a valid will
the:
- Testator must have capacity to make a will; and
- Testator must have the requisite intention; and
- Requirements of s.9 Wills Act 1837 (‘WA’) must be complied with
, Capacity Test for testamentary capacity Banks v Goodfellow as soundness of mind, memory and
understanding so testator must understand:
- Nature of his act and its broad effect
- Extent of his property
- Moral claims he ought to consider
Additional requirement: Testamentary capacity must exist at the time the will is executed –
exceptions to the rule (Parker v Felgate) where a testator lacks capacity at the date of execution, it is
sufficient if:
- The testator had capacity when giving instructions for the will
- The will is prepared in accordance with those instructions
- At the time of executing the will, the testator understands he is executing a will for which he
gave instructions
MCA 2005 created statutory test for capacity
Where the will appears rational = testamentary capacity is presumed
If evidence is produced which raises doubt as to capacity, then onus of proof is on those seeking to
have the will confirmed as valid (normally PRs) to prove that testamentary capacity was present
Intention A testator must have a general intention to make a will and a specific intention to make the particular
will they are signing
To have specific intention: testator must have knowledge and approval of contents of the will they are
executing
There is a presumption that the necessary intention exists where a testator with testamentary
capacity executes the will
- Can be rebutted where circumstances suggest lack of intention e.g. trouble reading or blind
Require If any of the execution requirements are not complied with, the will is NOT valid
ments of
s.9 WA 1. Signed by testator
1837 - Will must be: in writing and signed by the testator or by some other person in the testator’s
presence and by his direction and it appears that the testator by his signature intended to give
effect to the will
2. Signed by witnesses
- Testator’s signature is required to be ‘made or acknowledged by the testator in the presence
of two or more witnesses’
AND
- Such witness attests and signs the will in the presence of the testator (pr acknowledges his
signature)
If a beneficiary of a will, or their spouse at the time of execution, acts as a witness, the beneficiary will
NOT be able to inherit under the will (s.15 WA) does not affect validity but must be avoided
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