Distribution of estates and intestacy Flashcards
(39 cards)
What are the two key issues to consider when determining how a deceased’s estate will pass?
- Whether the deceased left a valid will
- The nature of the assets owned by the deceased
What is the term for a person who has left a valid will?
Testator
What is the term for a person who has died without making a valid will?
Intestate
What are the intestacy rules governed by?
Administration of Estates Act 1925 (AEA)
They determine who inherits and what each beneficiary recieves
What is meant by ‘partial intestacy’?
When the will does not cover the entire estate
Arises out of poor will drafting
What is a ‘succession estate’?
Assets capable of passing under a will or by intestacy
Is it possible to deal with assets before getting a grant of representation
Yes
This is helpful because it allows you to distribute assets early
Name some types of property that do not pass to the succession estate.
- Donatio mortis causa
- Discretionary pension scheme benefits
- Insurance policies written in trust
- Statutory nominations
- Property held as a beneficial joint tenant
- Some other beneficial interests under trusts
Define ‘donatio mortis causa’.
A gift made in contemplation of death
What are the three requirements for a valid donatio mortis causa?
- The gift is made because the donor believes they will die
- The donor makes it clear that the gift is conditional on dying
- The donor parts with the property or something representing ownership
What happens to discretionary pension scheme benefits after a member’s death?
They do not form part of the deceased’s estate for distribution purposes
What do pension schemes allow?
Some pension schemes allow contributors to ‘nominate’ a 3rd party to receive benefits after death (Expression of Wish form)
Are pension scheme nominations binding?
They are not binding on trustees.
How are insurance policy proceeds treated in relation to the succession estate?
If it’s a simple life insurance policy, they pass to the succession estate unless written in trust for another person.
If written in trust, then it won’t form part of the succession estate. it belongs to the beneficiaries nominated and vests on the insured’s death
When shall the benefits of insurance policies, the discretionary pension scheme, and statutory nominations be released?
Upon the production of a death certificate
What are the different statutory nominations?
- Friendly society
- Industrial society
- Provident society
What’s the maximum amount allowed for nomination
The amount nominated cannot exceed £5k
On the death of the deceased, the monies in the accounts pass to the nominee rather than under the will or intestacy of the deceased
How does co-ownership pass?
Beneficial Joint tenants – rule of survivorship (goes to other joint tenants)
Beneficial Tenants in common – the share will pass into the succession estate
For spouses, what is the statutory legacy amount under intestacy rules?
£322,000 free of tax and costs plus interest from the payment date
What is the rule of survivorship in beneficial joint tenancy?
Property goes to the other joint tenants
How does the family home get distributed?
- Land registered at the Land Registry in the name of up to 7 joint tenants
- Even if the legal owners hold the land as joint tenants, they may have chosen to hold it on trust for themselves as equitable tenants in common
- There would be an express trust over the land which sets out the equitable and beneficial ownership - from the register of title
- If no express trust, there may be implied trust
What happens if the deceased was a beneficiary under a trust?
Their beneficial interest will not necessarily form part of the succession estate
What is the effect of a spouse not surviving the deceased by 28 days?
The rules apply as if the deceased was not survived by their spouse
So the spouse cannot pass their interest to their own estate
Who is an issue?
- Children
- Grandchildren
- Legitimate
- illegitimate
- adopted
