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WILLS, AMENDMENT + CHANGES TO ESTATE DISTRIBUTION FOLLOWING DEATH - Coggle…
WILLS
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DISPOSITIVE CLAUSESTestator directs who is to inherit their assets
- Property / cash may be given to named beneficiaries either directly and absolutely or subject to conditions
- Specific gifts
Particular item owned by the deceased at the date of death (incl chattels)
- should be drafted precisely + subject matter must be clear so the item can be identified otherwise the clause may fail for uncertainty
- If testator does not own at death item referred to in will = gift fails to take effect
- If testator would like beneficiary to receive ‘something’ even if not possible to give effect to original gift > alternative gift can be included
- Gift of a collection may be to individual / more than one individual = will should specify how agreement should be reached / time frame for a division / how any failure to agree within such time should be resolved
Chattels to be given as specific gift and NOT as part of the general residue clause > specific clause is needed
- Chattels may need to be amended to include or exclude certain items
- Specific gifts of items/collections appear before gift of chattels in a will, and gift of chattels is drafted to cover only the items that have not already been given away
Specific gifts of land = needed if testator wants to give away their interest in a property to a particular beneficiary BUT NOT if testator has is happy for it to be sold as part of the administrationProperty
- General legacies
Gift of property which is not distinguished from property of a similar typePecuniary legacies (gifts of cash) are general in nature e.g. “I give £1,000 to [ ]”.Demonstrative legacy = type of general legacy (pecuniary in nature) which will directs should be paid out of a specified fund > not fail if there are insufficient assets in specified fund BUT beneficiary is entitled to receive what is left in fund + have balance of the legacy paid as a general legacy.
- Pecuniary Gifts
Gift of money = can be specific or general
- Clause will often contain the amount of the gift in numbers and words
- Residuary gifts
Gift of all of testator’s property not already disposed of under the will or any later codicil
- Largest part of the deceased’s estate + may be given directly to beneficiaries OR trust may be imposed
A trust should generally be imposed where:
- a beneficiary is given a life interest in the residue
- a discretionary trust of the residue is to be set up or the residue is given to more than one person
- there are contingent or minor interests
Clause should be drafted incorporating trust to cover a declaration of trust + terms of the trust itself
If asset given in an earlier gift in will fails, = subject matter of the gift will pass under residue clause instead BUT failure of a residuary gift, or part of it, results in a partial intestacy
- To reduce the risk of this: avoid giving separate parts of residue / create express substitution clauses in the event that original gift does not take effect / use an ultimate gift over clause
CONSTRUCTION
Date from which the will speaksa. Property = date of testator’s death in respect of identifying gift Unless a contrary intention is shown
- contrary intention = ‘my’ (specific legacy), ‘now’, or ‘at present’ when describing a gift which make date of execution of the will relevant date
b. Collections = gift of a collection which is capable of growing the will speaks from the date of death notwithstanding the use of ‘my’
- e.g ‘my stamp collection’ or ‘my chattels’
- testator should specify whether he intends gift to be of collection owned at date of will or to include any items acquired in the future
c. People = will is deemed to speak from the date of execution, unless the wording in the will shows a contrary intention
- Gift is given to a class of beneficiaries should state expressly when the beneficiaries will be determined
Relieving provisionsdeal with matters as who should bear burden of taxes, charges, expenses + costs = expressly stated to avoid confusion
- Inheritance tax = absence of any express provision an individual gift in a will is made free of inheritance tax and IHT would be payable out of the residue as a general testamentary expense
- Expenses/cost of transfer = absence of any express provision specific beneficiaries bear the burden of the: cost of delivery of the item of property to them + expenses incurred since the date of death in preserving the item or ensuring its upkeep
- Charges = IF property is subject to a secured debt / charge > personal representatives will need to consider whether repayment of debt linked with the charge is a cost of the estate
- s.35 = unless the will shows a contrary intention, the asset charged bears liability for payment
- Testator can expressly relieve property of charge by making it a general debt of estate to be paid out of residue BUT general direction in the will to pay debts and expenses from the residue of the estate is insufficient to oust the effect of s.35
Interpretation IF meaning of a will / clause is unclear = possible for the courts to rule on how it should be constructed looking at testator's intention
- Extrinsic evidence may be submitted in the following circumstances: will or any part of it is meaningless / language used in any part of it is ambiguous on the face of it / will is ambiguous in light of the surrounding circumstances
Survivorship Provisions
To take a gift under a will a beneficiary must survive the testator, even if only for a short period of time
- If the beneficiary predeceases the testator the gift will lapse
- If order of death is unknown = deaths are simultaneous
- Survivorship clause = states that in order to take a particular gift beneficiary must survive the testator by a specified period of time
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Distribution of estates
If deceased’s makes will that covers entire succession estate = testateIf will does not cover entire estate = partially intestateA person who dies without making a valid will = intestate
- intestacy rules apply to their entire succession estate
Assets capable of passing under a will / intestacy are deceased’s ‘succession estate’ / ‘distribution estate
NON DISPOSITIVE CLAUSES
- Commencement = identify the testator + testator’s occupation is sometimes also added
- If testator is known / owns assets by another name it should be referred to
- Revocation = ensures all previous wills/codicils are revoked so only one valid will exists at any one time
- Burial & Funeral wishes = direct what should happen to their body BUT not legally binding on the personal representative
- Appointment of executors
- PR appointed by will = executor
- If will does not appoint an executor = PR appointed by the NCPR is an administrator
- minimum of 1 executor is required, but often better to appoint at least 2, maximum of 4
- Appointment of a spouse/civil partner becomes ineffective if the testator later divorces/dissolves their civil partnership
- If trust does arise following the testator’s deat, = least two trustees should act / common to appoint the same person as both executor and trustee
- partnership is not separate legal identity distinct so cannot be appointed BUT all of the partners at the date of death are appointed
- LLP / trust corporation can be appointed
- Only professional executors and trustees may charge for their time
- Appointment of Guardians = testator with parental responsibility may appoint a legal guardian for their infant children + testator should obtain consent from the proposed guardian
- Administrative Powers = executors are responsible for assets within an estate and trustees for assets held in trust SO must be given power to carry out their role from statute, common law and/or express powers conferred by the will
- If a will contains no express administrative powers then by default only statutory and common law powers will apply
- Express powers within a will override default powers to the extent there is any discrepancy
- Provisions produced by the Society of Trusts and Estates Practitioners (STEP) are widely used
- Date & Attestation
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