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Making a Will is one of the most important things you will do in your lifetime. It caters for far more than just who will benefit from your belongings (your estate).

Glossary of Legal Terms

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Administrators

When a person dies and has not written a valid will that can be found, they are said to have died ‘intestate’.

Under the Rules of Intestacy, the nearest relative or the main Beneficiary is entitled to take on the legal work of managing the estate and are called ‘Administrators’. Administrators must obtain documents from the High Court to show that they have the legal authority to deal with the property. These documents are called ‘Letter of Administration’. They usually take several months (sometimes years) to obtain.

Where a valid will has been written and found, the people undertaking the task are chosen by the testator and named in the will. They are called Executors. Executors appointed under the will do not have to apply to the court for ‘Letters of Administration’.

They obtain their written authority to act much quicker, and simply by requesting a ‘Grant of Probate’.

Neither process is necessary where the estate is only ‘Cash and Chattels’ (ie. Moveable, personal possessions). Certain types of bank accounts with less than £5000.00 credit balance do not technically require ‘Letters of Administration’, or a ‘Grant of Probate’ to be released although it is often insisted upon by the organisation holding the funds.

Age

Section 7 of the Wills Act 1837 states that a testator in England must be 18 or over,

Agricultural Land

Includes any crops or animals upon it unless they are clearly identified as being the subject of a separate gift

Agricultural and Business Property

If the Testator envisages that his children, or Trustees would carry on his farming, or other business for the benefit of the Minor, or other beneficiaries there may be tax advantages. The Business assets can be gifted in the Will to the Donee, or Trustees, with special powers to administrate the business.

If however, the Testator cannot see his children continuing his farming, or other business he can make arrangements during his lifetime for what will happen to the business on his death. See IHT for Business Tax Relief.

Alias

A Testator is said to have an Alias when they are regularly known by more than one name. Eg. Professional Entertainers, Journalists and Authors etc., who have both professional and private names.

Alterations and Additions to a Will

Under Section 21 of the Wills Act 1837, alterations to a will are assumed to have been made after it was signed and are ignored until the contrary is proved. The Testator can correct the text of the Will, but if he does, he must sign in the margin next to the alteration and the witness should do the same prior to the actual attestation of the Will. If an alteration, correctly attested cannot be read Probate is granted in blank. Additions below the signatures are ignored.

Animals

A gift to look after a pet cannot be for any longer than 21 years (perpetually Rule).

Following the demise of a Yorkshire Terrier, which had been left a legacy of £20,000 and subsequently destroyed by the Executors (The Midland Bank) precedents were developed for pets. They are designed to protect them and provide funding for the remainder of their natural lives.

Claimants

The people entitled to apply to the Court to be included in the distribution of an Estate where a Will exists are:

The surviving spouse

Former spouse who has not remarried

Son(s), or Daughter(s), step children, illegitimate children may also have rights, any person who was maintained by the Testator.

Polygamous Spouses

There is no age Limit on Claimants. Most applicants are from adult children.

Whoever wishes to make use of the Inheritance Act must do so within 6 months of the Grant of Representation, although the Court can grant an extension.

For a spouse reasonable provision is required, for others, reasonable provision for maintenance is required. In dealing with a spouse, the Court will assess the situation as if the marriage had been ended by divorce rather than death. It follows then that a former Spouse who has remarried would not have grounds for a claim.

The Courts, in arriving at a decision, will also take into account, any written evidence left by the Testator in explanation of his reasons for not making a provision. Accordingly, the Testator should be advised to leave a written statement of their reasons, if they appear not to be making reasonable provision. Preferably, this should be done within the Will, but on a separate document. See Declarations.

Charitable Gifts

‘In order for a gift to be charitable, it must be considered to be for the benefit of the Community or for an important element of the community’

It is vital that the name and registered number of the Charity is correctly detailed where a Legacy is made in a will.

The Charity Aid Foundation (48 Penbury Road, Tonbridge, Kent, TN9 2JD.) or the Charity Commission (Central Registry) can be contacted for further information or Charity Numbers.

Gifts to qualifying charities do not attract Inheritance Tax.

Chattels

The word ‘chattels’ is used in several of the will paragraphs. Chattels are defined by the Administration of Estates Act 1925 s. 55 (1)(X) and are as follows:

Carriages, horses, stable furniture and effects, motor car and accessories, garden effects, domestic animals, plate, plated articles, linen, china, glass, books, pictures, prints, furniture, jewellery, articles of household or personal use or ornament, musical and scientific instruments and apparatus, wines, liquors and consumable stores.

Chattels do not include money, securities for money and items used for business purposes. Care should be taken when referring to chattels where collections are included. It is usually best to specifically include (or exclude) collections from chattels.

If chattels have been purchased on a credit sale, then they are vested in the testator and will pass under the will.

Children

The word ‘child’ or ‘children’ includes illegitimate and adopted children, but NOT stepchildren unless specified.

Codicil

A codicil is an addition to a will (a maximum of 3 codicils allowed per will) and has to be signed and witnessed in the same way as the original will. (section 9 of the Wills Act 1837)

The witnesses of a codicil do not have to be the same people who witnessed the will originally.

We will only normally replace the will as a whole as additions can sometimes throw doubt upon the meanings in the original will.

Community Care Act 1990

This act title is shortened from the National Health Service and Community Care Act 1990 and it has far reaching consequences for everyone.

The essence of the Act is that the local Authority will provide for you, if your funds are below the means tested level. If you are over that level, you will be deemed to pay your own way.

If a will left all the estate to the spouse and that spouse was in a nursing home, that inheritance would be used to pay for the nursing home fees. Beware of the Inheritance Act 1975, making adequate provision.

Contents of a Will

A will should contain whatever is appropriate from the following list:

  • A statement that this is the Last Will and Testament of Testator with the full name and Address as at the date of the will.
  • A statement that all previous wills are revoked
  • Appointment and Payment of executor(s), guardians and trustees where applicable.
  • Trustee powers and recitals
  • Details of gifts of specific items
  • Details of division of land
  • Clauses dealing with the remainder (residue) of the estate
  • Clauses dealing with alternative residuary beneficiaries
  • The method of disposal of the body (ie. Burial, cremation etc)
  • Testators usual signature
  • The signature of 2 witnesses, at the foot of each page and at the foot of the will

These sections are absolute requirements under the Wills act 1837. If any of these are omitted, the Will will not be valid.

Date on a will

A will does not have to state the date on which it was signed. The date may be put in without the witnesses being present.

Opening paragraphs can show a blank space which allows the testator to write the date he gave the instructions for the will, in addition to recording the date of attestation next to his signature which leaves no doubt as to the date of writing and attestation, making the will a legally binding document.

Declarations

If for whatever reason, a testator wishes to disinherit a member of his family, this is his wish, and the instruction will be taken. The reason for this should be made clear to the executors of the Will, using the declaration clause, explaining the action, and by writing a letter of explanation and inserting it within the bound will for storage.

The letter must be signed and dated by the testator on the same date of signing the Will for the avoidance of doubt. This may not prevent the disinherited relation from making a claim against the estate under the inheritance (Provision for Family and Dependants) Act 1975.

The steps to be taken by the will writer when the testator wishes to take this course of action are as follows:

  • When the draft will is sent to the client, confirm to the client the consequences of this action in respect of the Inheritance (Provision for Family and Dependants) Act 1975.
  • Ask the testator to leave a bequest in his will so that it is clear he did not forget the person. The gift of an item should be of family nature, such as a clock, painting etc. This is preferred to a small pecuniary legacy, which would be a snub
  • Include the acknowledgement if disinheritance which will require that the testator sets out his case, so that in the future the reasons are not lost. Other declarations of love, gratitude etc. should not be put into the Will, but dealt with by separate letter, which can then be stored with the Will.

Deeds of Variation

Under section 142 of the Inheritance Tax Act 1984, there are rules which allow beneficiaries of an estate to vary by mutual agreement the provisions of the Will within a period of 2 years from the date of the deceased’s death, so that property may pass to them in a more tax efficient manner.

Proposals to abolish Deeds of variation were made in the 1989 budget, but were not ratified because of their tax avoidance potential.

Disposal of the Body

The executor is not legally bound to carry out instructions regarding disposal of the body because the law does not recognise any property in a dead body as the body is not classed as an item owned by the testator, which he can dispose of.

It may be wise for the testator to discuss their preferences with their nearest relatives as the will may not come to light until after the funeral has taken place. This is particularly appropriate where a professional executor has been appointed. The simplest method is to provide a copy of the will to the Executor.

If the body is to be used for medical research or transplant surgery this can be included in the will. We would prefer the use of a donor card and/or notice to the next of kin should be used rather than a reference in the will, which may not be found immediately.

Donations are covered under the Anatomy Act 1984, s.4, which provides that the executors, or in some circumstances, residential institutions can donate the body or organs, as long as there is no reason to think that the testator or relative would not wish it. Obviously, a statement would clarify the testator’s wishes.

Disposal of items prior to Death

If a specific item (ie a car) is disposed of prior to the testators death, it cannot be replaced by an alternative item or sum of money.

If there is a possibility of such an event, a substitute item should be named in the will, if necessary.

Divorce

Although a marriage automatically revoked a will (unless otherwise stated), a divorce does not. It does however under the Administration of Justice Act 1982, s18 (2):

  • The appointment of a former spouse as executor or trustee shall be omitted.
  • Any devise or bequest to the former spouse shall lapse (fail). (unless there is an expression to the contrary in the will.

Under the Rules of Intestacy, no part of an estate passes to an ex husband or ex wife.

Where a will exists an ex spouse who has remarried could make a claim against the Estate under the Inheritance Act 1975.

Do it Yourself – Common Errors

Solicitors actually make more money from sorting out the problems created by home made Wills, than they do from drawing up the documents for their clients!

Pre-printed forms often cause problems too. When striving to make the wording of his will for the framework of the form, it is easy to inadvertently commit some blunder. For example:

  • I give £500 to my cousin John Flint confident that he will do what is right by the rest of my cousins…(creates a binding legal trust in favour of the cousins, and would need a Court Judgment to be resolved).
  • I leave £500 to Mr and Mrs Jones (is this £500 each or £500 to be shared? A court would rule that it was £500 each).
  • I give all my money to my wife Alice…(does this mean cash around the house, cash in the bank, or the whole estate?)
  • I leave everything to my wife Alice, and on her death, it is to be shared between my sons John and Peter…(this is a disaster, as normally property left to a person is then his/hers to dispose of? The implication here is that the property belongs to the sons, though held in trust by the wife.)

Domicile

A Testators domicile is their ‘permanent home.’

If the permanent home of the testator is in a foreign country or some foreign element is involved, specialist advice relating to the particular country should be obtained before the will is produced.

A permanent move from this country to another country after a will has been made does not invalidate the will made in this country.

A will must conform to the law of the Country where it was made to be valid in England or Wales. To be valid abroad, a Will must either comply with the laws of the country in which it is made or the country in which the testator intends to make his permanent home.

Enduring Power of Attorney

An Enduring Power of Attorney (EPA) is a document in which someone can give another person the power to act on their behalf, in their name, in regard to their affairs. The document will remain valid after the subject has become mentally incapable of managing his/her own affairs. Enduring Powers of Attorney have now been replaced by Lasting Powers of Attorney. If an EPA was registered at the time, it remains valid, but if registration was not done at the time of constructing, they must be replaced with a Lasting Power of Attorney.

A Power of Attorney can be made at any age and has particular relevance in advancing years, in business or spending a considerable amount of time abroad.

En Ventre sa Mere

Unborn child, which may be a beneficiary in a Will, (ie. Should my daughter have a child/children then I leave these grandchildren of mine…)

Estate

Property of a deceased person

Executors/ Executrix

The person or people who deal with the administrative, accounting and legal work involved in identifying, collecting and distributing the estate of the deceased person who has left a will.

Executor is the male definition, and Executrix, the female. Executors must be at least 18 years of age. An appointed Executor can refuse the task but must renounce the appointment in writing, sign the renunciation and file it with the Probate registry. Once a person has accepted, he cannot renounce.

If an Executor dies whilst carrying out their duties as an Executor then his named Executor in his own Will must continue the task. A maximum of four executors may apply for Probate.

Minors can be selected as Executors, but must be 18 when the testator dies. It is usual to leave a legacy to an Executor who is not the immediate family. The Executors obtain a document called grant of Probate from the High Court to show that they have the legal authority to deal with the estate. The appointment of joint executors is the ideal solution

An Executor may be passed over by the Probate Registry in special circumstances, such as conviction of manslaughter, being old or frail or intermeddling.

Executors have statutory powers to appoint additional trustees if a second trustee is required. Eg. Where land/immoveable property is in trust.

The process of obtaining Grant of Probate is not necessary if the estate comprises of small amounts of cash and chattels and totals less than £15,000.

Certain types of Banking or Savings Accounts with less than £5000 credit balances do not require a grant of Probate to be handed over, though it is often insisted upon by the organisation.

Foreigners

Since 1870, a foreigner has been able to own land or another property in this country (with the exception of a British Ship). This can leave property by a Will, just like any other UK citizen.

Free of Tax

Gifts can be specified as free of tax in which any case any inheritance tax that is due will be paid for from the estate prior to the gift being made.

Fear, Fraud etc.

A will is invalid if Fraud, fear coercion or excessive pestering has induced it.

General/ Plurals

The Law Property Act 1925, s61 states … in all Wills made or coming into operation after the commencement of this Act, unless the context otherwise requires:

  • ‘Month’ means calendar month
  • ‘Person’ includes corporation
  • The singular means the plural and vice versa
  • The masculine includes the feminine and vice versa

Hence it is not a legal requirement that we change Testator to Testatrix. Executor to Executrix, he to she, his to hers or vice versa. We do however endeavour to make these changes to produce a presentable document.

Gifts

Gifts of money are called ‘pecuniary legacies’. Legacies are gifts of money or an item, but notof immoveable property or land. In the event of a cash shortfall, gifts of specified and identified items take priority over gifts of money.

Gifts of land or fixed property are ‘devises.’ They cannot be made to a minor unless in trust, with a minimum of 2 trustees appointed.

Please be as specific as possible when describing a gift so as to avoid any ambiguity. Include detail of colours, previous owners (ie. Wifes mothers wedding ring) material etc.

As the will has no effect until death, any gifts in a will disposed of prior to death cannot take effect and are said to have ‘a deemed.’

Failure of Gifts

Gifts shall fail for the following reasons:

  • Gifts to witnesses or the spouse of a witness
  • Lapse – the beneficiary dies before the testator
  • Disclaimer – a beneficiary refused the gift (eg. My pet snake)
  • Statutory exceptions eg Killing the testator. (as a rule, a person who commits murder or manslaughter cannot benefit from his victims will, or through Intestacy, except in insanity)

Graves, Monuments and Ashes

Graves, vaults, tombstone or monuments may be looked after for a maximum of 99 years as a result of an agreement funded through a will. Consideration of gravestones or memorials is often left to relatives.

It is therefore important to be aware of restrictions that may be in force covering height of gravestone or wording that is not permissible. Ashes can be scattered anywhere in the UK, or buried in churchyards or cemeteries. The estate is not liable to pay for a gravestone, the beneficiaries should pay for it.

Guardians

Under the Guardianship of Infants Act 1886, guardians can only be appointed by a will or deed of Court. A guardian can be appointed to act jointly with a surviving spouse.

The guardian is the person(s) who, in absence of the surviving parents, will make the decision that the parents would have made. The consent of the appointee should be obtained.

It is important to consider the choice of guardian very carefully given that the children may one day be residents in the appointed guardians home. Due attention should be given to the size of the testators family and that of the guardian, the need for housing extension or possibility of having to move house, moral issues and discipline.

A surviving parent, unless otherwise stated in a will, is automatically the sole surviving guardian, and can act perfectly well on their own. A guardian can be appointed to act with the surviving spouse though this is only usually done if the testator does not feel the spouse is able to act alone.

If after assuming the role of guardian, the guardians themselves die, then it is not possible to back track to the original parents will for the appointment of an alternative, even if one was mentioned. It is up to the new guardian to take the step of appointing a successor. It is not necessary for the new guardian to wait until the death of the testator to do this, it can be done immediately. This is particularly important where the appointed guardian has no children of their own, therefore, would probably not think to do so in their will.

On occasions, the testator may wish to appoint several people to act jointly as guardians. It should be remembered that the guardian’s principle job is to make decisions for the children. Ideally, there would be one guardian, though in practice, a husband and wife couple are named, and this is perfectly acceptable. Any attempt to appoint more than 2, though legally permitted should be discouraged, as the ability of the guardians to come to a decision is likely to be impaired. Where two sisters are appointed for example, they both have equal status and both may wish to take in children. A court would have to arbitrate in this situation.

If no guardian is appointed in the Will and both natural parents die, then the Courts MUST make the appointment. In doing so, their main concern is the well being of the children, but the first people considered for the position will; be the natural father’s parent. If they cannot act, will not act or are unsuitable, the next option(s) would be the natural father’s brothers and sisters. Only if none of these are suitable would the court then turn to the natural mother’s family, parents first, then brothers and sisters.

If the children’s parents are not married, and both die, then the only person who can appoint a guardian is the mother of the child as she has parental responsibility. The natural father’s family are not considered at all, whether or not the fathers name appears on the birth certificate.

Where a person dies without a will, the law provides that after deduction of IHT and debts to the estate, it shall pass as follows:

  1. Where a spouse and issue survive;
  2. Spouse takes personal chattels, plus £250,000 absolutely, PLUS a life interest in half the residue. (Only the income can betaken, not the capital).

    Children take half the residue immediately, PLUS half the residue on the death of the spouse. (the issue of any child who has died takes their parents share).

  3. Where the spouse survives leaving no issue, but where parent, brother or sister of whole blood or their issue do survive.
  4. Spouse takes personal chattels, PLUS £450,000 absolutely, PLUS half of the residue absolutely.

    Parents take half of the residue absolutely (if parents are not alive, then brothers and sisters of whole blood or their issue take half of the residue).

  5. Where the spouse survives and there are no issue, parents or brothers and sisters of whole blood everything is taken by the spouse.
  6. Where no spouse survives

Children Take Equally

If there are no children or the issue the parents would take equally.

If there were neither issue or parents the estate passes to the first of the categories below which contains someone alive:

  • Brother or sister of whole blood EQUAL
  • Brother or sister of half blood EQUAL
  • Grandparents EQUAL
  • Uncles and Aunts of whole blood EQUAL
  • Uncles and Aunts of half blood EQUAL

If no one in these categories exists the estate then passes to the crown, though its interest may be waived if another person, particularly a dependant, can establish a strong claim.

Joint Accounts

Executors must fix a value upon the share of assets held in a joint account belonging to the deceased, and will have to locate the source of the money paid into the account.

The account can however continue to be drawn upon by the other party even though the other has died and a Grant of Probate has to be obtained.

Joint Ownership of Property

Property can be owned in any one of 3 ways:

  1. Sole ownership. If the testator is the sole owner of the land or property, they may dispose of it any way they see fit.
  2. Joint tenancy. Under a joint tenancy two or more people own the property together. It can be considered that each owns the entire property. Thus, on the death of any of the joint tenants the survivor(s) AUTOMATICALLY own the entire property, and the deceased in any other way in a will cannot dispose of the deceased share.
  3. Tenancy in Common. Under this form of ownership, two or more people again own the property together. However, each has their own share (or beneficial interest), which they can dispose of in any way they see fit, in a Will. The shares may or may not be equal.

The most usual situation is joint tenancy, the tenancy in common is only usually arranged if it is specifically asked for at the time of purchase of the property, though it can be arranged at a later stage if required.

Tenancy in Common should be found in a situation such as:

Husband and wife on second marriage

A group of friends who club together to buy a buy to let property

A group of business partners buying a property to let as a business sideline

A person may in his will gift (or devise) and land or property which he is the sole owner or may gift his share of ‘Tenancy in Common’.

Lasting Power of Attorney

What is Lasting Power of Attorney (LPA)?

Property and Affairs LPA

The Property and affairs LPA allows the Donor to appoint an Attorney to manage their finances and property whilst they still have capacity to make decisions for themselves. For example, it may be easier for them to give someone the power to carry out tasks such as paying their bills or collecting their benefits or income from the bank. This might be easier for lots of reasons. The donor might find it difficult to get about, or talk on the telephone, or may be out of the country for long periods of time.

The donor may include a restriction that the LPA can only be used at a time in the future when they lack the mental capacity to make decisions for themselves for example, due to the onset of dementia in later life, or as a brain injury.

Personal Welfare LPA

A Personal Welfare LPA allows the donor to appoint an Attorney to make the decisions on their behalf about their personal welfare. Personal Welfare LPA’s can only be used when the Donor lacks the capacity to make these decisions for themselves.

Legacies

Gifts made under a Will. All legacies are net of IHT unless stated.

Living Will (Advance Directive)

A Living Will is an Advanced declaration of your wishes on future medical treatment, should you be unable to communicate because of the lack of mental and/or physical incapacity. It can also be used for religious reasons. For example, not wishing a blood transfusion.

Mental Capacity

The testator must be of sound disposing mind at the time of attestation, or in sound mind when the instructions were given. Lord Cockburn CJ in Banks v Goodfellow stated that the test of sound disposing mind is defined in:

The Testator shall:

  • Understand the nature of the act and its effects
  • Understand the extent of the property that he is disposing
  • Be able to comprehend and appreciate the claims which he ought to give effect.
  • With a view to the latter object, that no disorder of mind shall poison his affections, pervert his sense of right or prevent the exercise of his natural faculties that no insane delusion shall influence his will in disposing of his property and bring about a disposal which, if the mind had been sound, would not have been made.

Mere eccentricity or foolishness of the Testator does not, in itself, invalidate a Will.

Mentally Handicapped – Learning Disability

Mentally Handicapped Testator

If the Testator is mentally handicapped to the extent that they are not deemed to have mental capacity, and that they are unable to express their wishes, then they are unable to make a Will.

Provision can be made through the Courts, for another person to be appointed to make a Will on behalf of a mentally handicapped person, but this should only be done with proper detailed legal advice.

Mentally Handicapped Beneficiaries (Non Dependant)

In leaving a gift to a non-dependant beneficiary, problems may arise which could outweigh the benefits ie.

  • If the gift is large, the Court of protection could apply to have an official receiver appointed for the beneficiary in order to administer the gift on their behalf
  • If the Gift is of cash, then the beneficiary’s means tested benefits could be affected.

Mentally Handicapped Beneficiaries (Dependant)

It is vital to appoint Guardians as the mentally handicapped child will never attain the mental age of 18 and will therefore always need guardians to make decisions, and not to imbalance the estate which could result in action being taken by the Court of protection against the Will.

Leaving Gifts to a mentally handicapped dependant may produce exactly the same problems mentioned above for a non dependant, with the added problem that if no provision is made, then the Court of Protection would contest the Will under the Inheritance (Provision for Family and Dependants) Act 1975 to gain a share of the estate for the Dependant for whom none had been made, thereby leaving the same problems as above.

To help alleviate some of these problems, provision may be made under the terms of a Discretionary Trust. The Discretionary Trust paragraphs in section 7.1 will allow the estate to be distributed without creating an inadequate provision.

Section 89 of the Inheritance Act 1984 provides that where there is a discretionary trust for the benefit of a disabled person, he is treated as though he has a life interest. The property settled in his favour is held upon trusts under which no interest in possession exists and not kless than one half of the settled property is applied for on his behalf.

The mentally handicapped child may be placed in a local authority home, who after means testing may decide that the child has sufficient funds to make payments. The Court of Protection could take the other two children to Court on the basis that there was insufficient provision for the mentally handicapped child.

Where the natural father survives and is not married to the mother of the child, he will have no parental responsibility, the Court of Protection would assume this role, and the father has the right to go to the Courts to obtain the Parental responsibility. The Father without custody of his illegitimate child cannot appoint guardians for that child.

Inheritance Tax

This is the only form of tax or duty imposed on the death of a person who is domiciled in the UK and relates to property passing between one person and another after a person’s death.

Main Exemptions:

The first £650,000 of the estate on 2nd death, individually £325,000.

  • Small presents. Any number of gifts totalling up to £250 per recipient, and other gifts totalling up to £3,000 in each year are exempt from tax.
  • Surviving Spouse
  • Charities. All gifts by Will to a qualifying charity are exempt from tax.
  • Political Parties. Gifts to political parties are exempt.
  • Death on Active Service exempts the estate from IHT.
  • Gifts for national purposes, museums, galleries, universities etc are exempt
  • Agricultural and Business Relief. Testator must have owned property for 2 years prior to death.

Intestate

The description of a person who has died without leaving a valid will or a will that cannot be found.

Intestacy

The Property of a person who dies without a valid Will (dying in testate) is divided between his families according to the rules in the Administration of Estates Act. This applies to anyone whose permanent home at the time of death is in England or Wales even if they die elsewhere.

Missing Persons

Tracing beneficiaries in order to distribute the contents of a will is a common problem.

The trustee Act gives protection to personal representatives who advertise the details of the missing beneficiaries. If nothing is heard after two months then distribution may commence among the known beneficiaries and will not be liable to any person who is entitled.

In some circumstances, the beneficiaries may be able to recover something from the overpaid beneficiaries.

Mortgage

If the testator has a mortgage without mortgage protection, the express reference to discharge the mortgage debt must be given.

Mutual Wills

Mutual wills are identical wills, usually made by husband and wife, leaving everything to each other and ultimately to the same beneficiaries (ie. the children)

This method does not allow a surviving spouse to redraw the Will in favour of another person (ie. New spouse). The Will is irrevocable on the death of the first party. The survivor cannot defeat the will by making large lifetime gifts. The mutual will is not to be confused with a Mirror Will.

Nil Rate Band

The Nil Rate band is the sum of money, which is free of tax on the death of the testator and is changed generally in the annual budget. The current NRB is £325,000 per person, £650,000 to a couple. (July 2012)

Nomination of Savings Account

Some types of savings accounts (eg. National Savings) can be nominated by specific prior arrangement in favour of a particular person on production of a death certificate without a letter of Administration or Grant of Probate.

This does not apply to Giro accounts, Premium Bonds or save as you earn.

Orphan Children

Under the rules of intestacy where both parents die leaving children, the property of both is held on trust until the children come of age. In the meantime, the monies from the estate are invested under quite strict rules, which may prevent the property being dealt with as flexibly and advantageously as might have been wished.

Other documents

If specifically identifiable documents that exist when the Will is written are referred to in a Will, they must be included as part of it, even if they are not signed or witnessed.

Overseas Will

If a Testator has an overseas property or Will then the appropriate paragraph must be used giving notification to the Executor of this will (albeit that he does not have to act as executor in respect of the foreign property). The Will must be proved in the Country of origin.

Plenishings

Domestic Articles in a house other than personal possessions.

Power of Attorney

A legal document which gives the nominated person the power to act on behalf of another in legal matters.

Pre arranged Funeral Plan

This is a method of purchasing a funeral at today’s prices and dying at tomorrows. It can be purchased in a lump sum or by instalments.

Prior Deaths

If a son or daughter destined to receive something under a will before the testator, their children would automatically get that share.

Anyone else destined to receive something under a Will who dies first will not inherit. In the case of an ordinary legacy (£100 to John Brown) or a specific bequest (my diamond brooch to Jane Brown) it will fall into the property going to the person who is to receive the residue.

If the residual legatee himself dies first, this leaves part of the property indisposed of, called partial intestacy. That part of the estate is dealt with under the rules of intestacy.

Prisoners

There are no restrictions on any prisoner leaving property under a Will.

Probate where a Will Exists

A sole executor appointed by a will can obtain probate. If there are two or more executors, then it is not necessary for all of them to obtain probate. The application can be made by any one of the executors.

Register death, obtain a death certificate, arrange funeral and obtain necessary forms from local probate registry.

Prepare accounts listing all assets and liabilities of the estate.

Complete necessary forms and return to the probate registry together with accounts and the ORIGINAL WILL. The Grant of Probate will then be forwarded to the Executor.

Place the statutory public notices and then start to collect in, or dispose of, any assets and settle any liabilities.

Distribute any specific legacies to relevant beneficiaries, obtaining receipts.

Prepare accounts showing any outstanding taxes have been paid. Once approval has been obtained from the probate registry, the estate can be released to the residuary legatees.

Probate where no Will Exists

In these cases application for letters of administration should be made by the next of kin of the deceased person. This will be:

  • The widow (widower), or
  • A child of the deceased person
  • A parent of the deceased person
  • A brother or sister of the deceased person
  • Other relatives

In the absence of any relatives whatsoever, the crown will benefit from the estate. Application is made to the nearest and most convenient local probate registry or probate office.

Probate Within Marriage

Because of the rather unusual rules that pertain to property within a marriage, your clients are likely to be aware of who owns what between them. The rules of ownership are therefore worth knowing, if only the theoretical implications.

The purchaser is the owner. Under English Law, each item of property belongs to the person who paid for it. Thus, if a man and wife decide to purchase a dishwashing machine and the man subsequently buys one on his way home from work with his credit card, the dishwasher belongs to him.

This heavily penalises a non working spouse who can virtually own nothing in their own right and as a result the situation is under review by the Law Commission. This can become a problem if the owning spouse becomes bankrupt or is subject to debt enforcement action.

If a married woman inherits £10,000 from a relative and subsequently gives her husband £1000 to purchase a three piece suite on the way home from work, the three piece suite is hers.

Gifts

Transfer of property between married people can alter its ownership. If a husband gives or transfers something (jewellery, car) to his wife, the assumption is that he is making her a gift, and it is construed as hers.

If a wife transfers something to her husband, however, the assumption is that she is not making a gift, unless it can be proved otherwise.

Death or Divorce

There are laws which reallocate property on death or divorce which identify ownership of items acquired for joint use and benefit – and thus the current laws of property within marriage only become relevant in the event of debts, or perhaps as part of the inheritance tax planning.

Protective Trust

A powerful tool that provides an income to a beneficiary, under control of trustees, forever or a specific period.

Public Trustee

A government department can be appointed as an executor, but a fee is charged.

Recitals

Under the Inheritance (Provision for Family and Dependants) Act 1975, reasonable provision must be made for certain people or groups of people.

If no such provision is made, but for what the Testator feels are good reasons, then reference to those reasons should be made in a recital, or statement.

Religion and Inheritance

The Koran sets out clearly in section IV (1 – 12) the directions of Allah, as to how the estate of the deceased is distributed.

The Jewish faith in the same way as the Islamic faith has a distribution set out.

Residual Legatee

A person or trust receiving the balance of the estate after all gifts etc.

Revocation

A newly written Will does not automatically revoke an earlier one, unless it contains a revocation clause. If a person leaves two wills that are inconsistent with each other, they stand together.

A will is revoked by deliberate destruction (burning, tearing up) by the Testator, with the intention of a revocation (section 20 Wills Act 1837). Accidental destruction does not form revocation itself. Deleting or writing ‘cancelled’ does not revoke a will.

Writing to whoever is holding a will and asking him to destroy, does not revoke it.

Section 18 of the Wills Act 1837 states that a Will is automatically revoked by the marriage of the Testator unless it was made (and stated to be made) in contemplation of that forthcoming marriage. Divorce does not automatically revoke a Will.

If a Will has been lost or destroyed, this does not form a revocation (ie. House Fire), probate my be granted on proof of its content, execution and attestation.

Rider

A rider is an additional comment included with a legacy, making reference to the legacy or the beneficiary.

Riders must always be fair, but should rarely be made conditional upon the beneficiary carrying out, or not carrying out, some duty (eg I give my Rolls Royce to John Brown if he marries my sister Jane).

In most cases, it would be best to limit riders to expressions of wish which would not be binding on the beneficiaries, but which they would probably carry out, out of respect to the Testator (eg. I give my Rolls Royce to John Brown and wish that he should pass it to his son on his death).

Secret and Semi Secret Trusts

If a gift of a large sum of money to a beneficiary is made in a will, this gift when transferred to the beneficiary appears to the outside world to be a generous gift. The reality is that the Testator has in his lifetime prepared and established a secret or semi secret trust agreement with the beneficiary, for the benefit of a third party, mistress or illegitimate child. A semi secret trust indicates in the will the terms of the trust but does not disclose who the true beneficiary is.

Seven Year IHT Rule

The most usual form of lifetime gift, which is relevant for IHT, is a gift given by one person to another. Such a gift is exempt from tax if the donor lives on for another seven years. However, if a Donor does not survive the seven years then tax may become payable.

The rate of tax payable on the gift reduces in relation to the number of years between the date of the gift and the date of the death.

  • Death within 3 years of the taxable gift 100% tax is payable
  • Death between 3 and 4 years after gift 80% tax is payable
  • Death between 4 and 5 years after gift 60% tax is payable
  • Death between 5 and 6 years after gift 40% tax is payable
  • Death no more than 7 years after gift 0% tax is payable

Solicitors

There is no legal requirement that a Will must be drawn up or witnessed by a Solicitor (much to their dismay).

Inaccurate use of legal terminology has sometimes created difficulties when Solicitors have used legal jargon. Plain English is perfectly adequate.

Nevertheless, a solicitors advice can be required where other legal issues are in question. For example, where there is an income from a Family Trust with the right for that income to be determined by the recipients will.

Solicitors Fees – Probate

Solicitors Fees (which are deducted from the estate before being passed to the beneficiaries) for acting in a normal probate case are likely to be in the region of 3% on the first £2 – 10,000 of the estate, plus 2.5% on the next £40,000 and reducing in percentage thereafter, not on a time expended basis, at the hourly rate of the partner (usually around £150 per hour).

Solvency

After deduction of tax and expenses etc specific bequests are given out, followed by pecuniary legacies and anything remaining goes to the residual legatee.

If there is only sufficient in the estate to meet the bequests and legacies, then the residuary legatee gets nothing.

If there is a shortfall in the value of the estate that is the estate is insolvent, then all specific bequests are made but the pecuniary legacies are reduced in equal proportions EXCEPT for any legacy with priority.

If the estate is even less, then specific bequests would have to be sold in order that the pecuniary legacies could be met and specific bequest would fail.

Succession

Inheritance or transfer of property on death.

Survivorship Destination

A destination in a title to land which, on the first death transfers the property to the survivor of the original owners.

The Law Property Acts 1925 (Section 194)

This section provides that if two or more people die in circumstances where there is no evidence as to who dies last, for succession purposes, the younger is deemed to have died last and so will inherit any gift to him in the elders Will.

For this reason, a survivorship clause is drafted in the will to dedicate the destination of a gift, if the beneficiary does not survive by 30 days or more.

Advantages of succession

  • Stops the same estate being administered twice
  • Stops the estate passing to any other person other than intended

Testator

The person who gives instructions in a Will for the administration and distribution of his estate, following his death. (the will maker)

Trustee

A person appointed by the Testator to look after funds or property until they are due to be transferred to a beneficiary. In most wills, the executor is appointed as Trustee. He would have to use his powers if there are any specific trusts in the Will and once the estate had been administered and gifts made under the will been distributed. He is responsible and governed by Trustee law to administer the Trust and distribute it as per the directions. There are a number of different clauses relating to specific responsibilities of being a Trustee.

It is always advisable to appoint two trustees in order to share opinion and responsibility. Where land or immoveable property is involved, two trustees must be appointed.

Trust Age

Unless otherwise specified, any bequest held in trust for a minor will be held until they reach the age of 18.

For Trusts, which will pass to the beneficiary entirely on their reaching a particular age, this can be increased.

It is quite reasonable to contend that at the age of 16, the beneficiary is not equipped to handle valuable assets properly, and therefore specify an age of say, 21 or 25. This contention can also be applied to the age of 21, but slightly less convincingly. By the time the argument has been continued to the age of 25, it becomes increasingly difficult to pursue, and we would not recommend this course of action. The absolute maximum would be 29.

Certain trusts can be arranged to provide income for longer periods.

Variations

Rules allow the beneficiaries of a Will to vary its provisions within two years of the Testators death, so that property may pass in a tax efficient way.

Will Document

Do not pin or staple anything to the document, which might give the impression of a missing piece of paper that might have formed part of the Will.

Witnesses

Must not be beneficiaries of the Will or those legacies will be lost.

A blind person should not be a witness.

A minor should not be a witness if it can be avoided, though there is no law against this.

The Will must be first signed by the Testator within sight of two witnesses, who should both be present when he signs.

The Testator must sign first and the two witnesses afterwards. Each witness must sign in the presence of the Testator, though not necessarily in the presence of each other.

An attestation clause must be included in the Will, or affidavits will be required from the witnesses, who might be dead.

The witnesses address is not required by law, but should be included if possible. If the signature does not show the surname clearly then it should be printed together with the address.

It is advisable to obtain the names and addresses of the witnesses to put on file, if the will(s) were to be lost or destroyed then this information may be of great importance to prove the will in the absence of the original.

What is a will?

A will is a legal document where a person, names one or more persons to manage his or her affairs and estate. In “olden” times, a Will referred to property, and a Testament referred to personal property, hence the term now used “Last Will and Testament”.

Intestate

If someone dies without making a will, they are said to have died “intestate”. If this happens, the law sets out who should deal with the deceased’s affairs and who should inherit their estate (property, personal possessions and money).

Contact Us

County Estates & Wills

Sea View

Cambrian Terrace

Saundersfoot

Pembrokeshire.

SA69 9ER

 

Tel: 01834 815062

Email: enquiries@countyestatesandwills.co.uk

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