Wills 2: Interpretation / Intestacy

Question 1

What is a Specific Legacy gift? And what happens if it no longer exists?

Answer 1

A gift of specified part or the estate that is clearly identified (my car with reg number 123)

• Subject to ademption: so if testator no longer owns that particular object at date of death, gift fails.

Question 2

What is a General Legacy gift? And what happens if it no longer exists?

Answer 2

A gift that does not identify a particular item (eg. a BMW)
- Doctrine of ademption does not apply
- If there is no such object (eg BMW) in estate at time of death, beneficiary is entitled to require executors to purchase one if they have sufficient funds

Question 3

What are different gifts of cash?

Answer 3

Pecuniary Leglacy
- dont specify source
- can reduce if not enough left in estate

Demonstrative
- do give source (ie out of X bank account)
- if not enough left in source or it no longer exists entitled to full amount in other cash or assets

Question 4

What is a Demonstrative Legacy gift? And what happens if it no longer exists?

Answer 4

A general legacy which identifies the source from which the gift is to be made (eg. £100 to X paid from my savings account)

• If source is gone/insufficient by time of death (eg. Account is closed or has to little funds) beneficiary can look to executors to meet any shortfall from other cash or assets in estate

Question 5

What is a Residuary Legacy gift?

Answer 5

Everything that is left of the estate when all other gifts, personal liabilities and admin costs are accounted for.

Question 6

How does a gift lapse and what happens to it if it does?

Answer 6

If beneficiary dies first the gift will lapse
- Unless there is a substitution (in which case it goes to that beneficiary)
- If fails it passes to residue
- If residue fails it passes under rules of intestacy

EXCEPTION
- gift to issue (goes to thier issue if they have it)
- left to joint tenants (survivorship)

Question 7

What time is relevant for deciding the beneficiary?

Answer 7

• Presumption that will is construed at date of execution
• So gift made to “eldest son of X” can only go to person fitting that description at date of execution

Question 8

Difference between joint tenants and in equal shares,in terms of when they lapse.

Answer 8

Joint Tenants
- Gift to 2+ people as joint tenants will only lapse if all recipients die before testator
- if only one dies then goes to the other

In Equal Shares
- Gift made to people in equal shares (ie “to A and B in equal shares”)
- If A dies early, their part lapses (then passes through intestacy unless there is a substitute)
- B still gets their share

Question 9

If gift is conditional upon survival of beneficiary, what happens if beneficiary dies in relevant period?

Answer 9

• It is common for gifts to be made conditional upon the survival of beneficiary for specified time (ie 28 days)
• Gift fails if beneficiary dies in this time

Question 10

What is simultaneous Death and what are the rules?

Answer 10

• Where testator and beneficiary die so close together it is impossible to determine who died first
• Law of commiserates provides that younger person survives older person

Question 11

What is an issue and what happens if a gift is left to them?

Answer 11

• If gift is made to testators child, grandchild or greatgrandchild (issue) and the child dies first
• Gift will pass to beneficiaries child (even unborn but conceived)
• If more than one child – in equal shares

However
Subject to Intentions to the contrary
- Ie. leaving to daughters/sons that survive testator, and if more than one then in equal shares

Question 12

Can gifts be left to witnesses?

Answer 12

• Gift fails if the beneficiary or beneficiaries spouse witnesses the will
• But will itself remains

Exception
- Does not fail if there were two witnesses notwithstanding the beneficiary/spouse

Question 13

Who do the gifts to children rules apply to?

Answer 13

Children includes:
- Legitimate, illegitimate and adopted children

Does not include:
- Stepchildren

Question 14

What are class gifts and what are the rules?

Answer 14

Is a gift to be divided amongst beneficiaries who fulfil a general description

• Class will close as soon as any member of the class satisfies the condition (interest has vested)
• will close on death is there is already someone with vested interst at time of death
• When class closes no new member can be added, but anyone alive and within the class will share gift if they eventually satisfy condition (vest)

Exception
- Will may exclude class closing rules through a specific provision (ie. beneficiaries living at my death, to beneficiaries whenever born etc.)

Question 15

Under intestacy rules who does estate go to if there is a surviving spouse?

Answer 15

Requirement that spouse survives deceased by 28 days?

No children
- everything to spouse

With children spouse gets:
- Personal chattels
- £270,000 (taken from residue), and
- Half of remaining residue

• children share other half of residue

Question 16

Under intestacy rules is spouse able to gain matrimonial home?

Answer 16

• Spouse can require personal representatives to appropriate home (or deceased’s share in it)
• This forms part or total satisfaction of their interest (£270,000 + half of remaining residue)
• If home is worth more they can appropriate it and pay over the difference (equity money) to estate

Question 17

Intestacy rules what is order of entitlement if no surviving spouse?

Answer 17

• Issue (children) on statutory trust
• Parent (equally if both alive) (not on statutory trust)
• Full Blood Siblings on statutory trust
• Half Siblings on statutory trust
• Grandparents (equally if more than one)
• Uncles/Aunts of whole blood on statutory trust
• Uncles/Aunts of half-blood on statutory trust
• The Crown as ‘bona vacantia’

Rules
- Goes to members of first class that has relevant people
- Divided equally amongst members once/if they reach 18 or marry (whichever comes first)

Question 18

Who do statutory trusts apply to in intestacy and what is the significance?

Answer 18

Applies to all classes except parents and grandparents

• Means that class member’s issue takes their parents share per stripes
• If a class member has predeceased any child will inherit that share (split equally between if more than one) once they reach 18/marry

Question 19

What happens if a potential beneficiary in intestacy dies before gift vests in them?

Answer 19

Means they die before reaching 18 or marrying

• If have issue, they inherit share
• If no issue then treated as if beneficiary never existed

Question 20

What property passes outside will or intestacy but is still subject to inheritance tax?

Answer 20

• Property owned as beneficial joint tenants
• Life Interests in Trust Property
• Gifts where donor has received benefit

Question 21

What property generally passes outside will or intestacy but is not subject to inheritance tax?

Answer 21

Life Assurance Policies

Pension Scheme Death Benefit

Nominated Property in friendly society, national savings account or national savings bank