Wills

Question 1

A will is a legal declaration made by ……. naming one or more …….. to administer the estate, setting out how the assets are to be distributed to the …….

Answer 1

Testator
Executors
Beneficiaries

Question 2

Name four benefits of making a will?

Answer 2

(1) Control over destination of assets
(2) Tax efficiency
(3) Nominate guardians
(4) Make special bequests

Question 3

Can an executor be a beneficiary?

Answer 3

Yes

Question 4

What if a testator cannot sign the will?

Answer 4

Can make a mark or can be signed by someone in the testators presence acting under their instruction.

Question 5

State four requirements to qualify and sign as a Testator?

Answer 5

(1) Mental capacity
(2) Aged 18 or over
(3) Not be making a will under duress
(4) At least two witnesses present who must also sign

Question 6

Is there a legal requirement for the will to be dated?

Answer 6

No, but it is good practice.

Question 7

What is the impact of a beneficiary or spouse being a witness?

Answer 7

The will would still be valid be the beneficiary could not inherit under the will.

Question 8

Name two situations that cause is a will to be revoked?

Answer 8

(1) By the testator if mentally capable by;
(a) Deliberate destruction
(b) A declaration
(c) Making a later will and stating previous wills are revoked
(2) Marriage unless makes reference to the marriage

Question 9

Is a will automatically revoked by divorce?

Answer 9

No but ex-spouse is treated as having died from the decree absolute, unless the will states otherwise, if spouse was an executor this is also revoked.

Question 10

What are the seven duties of an executor?

Answer 10

(1) Valuing the estate
(2) Collecting and Protecting Assets
(3) Submitting accounts to HMRC form PA1
(4) Paying debts and IHT
(5) Obtaining probate
(6) Distributing the estate in accordance with the will
(7) Preparing accounts for beneficiaries

Question 11

When will the grant of probate be been given by the Probate Registry enabling the assets to be distributed?

Answer 11

When IHT has been paid

Question 12

Who distributes the estate if there are no executors or they refuse to act ?

Answer 12

An Administrator appointed by the court or agreed with the Probate Registry

Question 13

How can a testator replace or appoint a new executor

Answer 13

A new Will or a Codicil (Amendment)

Question 14

What is a Mirror will?

Answer 14

Identical single wills, that are not binding on each other and are possible to amend at any stage.

Question 15

What is a Mutual will?

Answer 15

Two people make wills with a contract that on first death the survivors’ will remains unchanged, can only be revoked if both consent. They can be enforced by the beneficiaries. They are inflexible and don’t allow for a change in circumstances after first death.

Question 16

What is a Codicil?

Answer 16

A document that amends an existing will and is used for minor changes, signed by testator and two witnesses, states the changes and confirms existing will is still valid.

Question 17

What is a statutory will?

Answer 17

(1) Made for someone who does not have mental capacity
(2) Made by application to The Court of Protection
(3) Signed by the applicant on behalf of the person lacking capacity

Question 18

What is the process if there is no valid will (Intestacy)

Answer 18

Administrators are appointed who apply to The Probate Registry for Letters of Administration this is a longer process than the Grant of Probate which is given to Executors.

Question 19

Intestacy, spouse and children?

Answer 19

Personal Chattels plus £250,000 to spouse

Residue 50% Spouse / children (Absolute trust until 18)

Question 20

Intestacy, spouse no children

Answer 20

All goes to the spouse.

Question 21

Intestacy, no spouse

Answer 21

Children (Issue) (Includes step and proved illegitimate)
Grandchildren (Remoter Issue)
Parents
Siblings
Grandparents
Crown

Question 22

What are both Administrators and Executors otherwise referred to as?

Answer 22

Personal Representatives.

Question 23

What is the document that confirms both the Grant of Probate and Letters of Administration known as?

Answer 23

Grant of Representation.

Question 24

What are the five key steps to the will/intestacy administration process?

Answer 24

(1) Request Probate Registry for Grant of Probate or Letters of Administration
(2) Account for all assets, gifts in last 7 years and gifts with reservation
(3) HMRC Calculate IHT
(4) Tax paid before probate granted, (Property can be deferred and paid in equal instalments over 10 years)
(5) Distribute assets once tax paid or deferral agreed and Grant of Representation received.

Question 25

How long must a spouse survive for, after first death, to receive a share under the rules of intestacy?

Answer 25

28 days.

Question 26

A Disclaimer is one of two ways the terms of a will can be altered within 2 years of death, explain it’s four conditions.

(It makes the situation as if the legacy had never been made)

Answer 26

(1) Can disclaim if haven’t already accepted the property
(2) Made in writing
(3) Can’t accept payments in return
(4) Must include a statement that for IHT purposes it is treated as if the benefit was not received

Question 27

A Deed of Variation is one of two ways the terms of a will can be altered within 2 years of death explain the Conditions.

(Allows beneficiaries to revise the terms of a will or the way assets are distributed under intestacy, after death)

Answer 27

(1) All beneficiaries AFFECTED must agree (court can decided for minors or if mentally in capable).
(2) Requires a Deed signed by affected beneficiaries
(3) The Deed must refer to the will, trust or the intestacy and for IHT purposes has same affect as if deceased had made it.
(4) If Deed results in more IHT due it must be signed by Personal Representative.
(5) Beneficiaries cannot receive payment

Question 28

What is Post Mortem Tax Planning?

Answer 28

Using a Deed of Variation / Disclaimer for IHT purposes, if parent gives up income over £100 by gifting to an unmarried child it is treated as the parents.

Question 29

An individual has the right to distribute his property any way he chooses but can a will be challenged? Give an example.

Answer 29

Yes for example if not made provision for dependents.