Distribution of the estate (Specific legacies) (Administration of estates)- FS Flashcards
(13 cards)
What must personal representatives do before distributing legacies?
They must first pay the estate’s debts, funeral expenses, and testamentary expenses.
In what order are legacies distributed after debts are paid?
- Specific legacies
- Pecuniary legacies
- Residuary estate
What is a Specific Legacy
A gift of a particular, identifiable item or asset in the will (e.g. a specific house, piece of jewelry, or shares).
How is a gift of land or property transferred to a beneficiary?
By an assent, a legal document that vests the title in the beneficiary.
What form is used to transfer shares in a company to a beneficiary?
A stock transfer form is required.
Who is responsible for costs related to transferring a specific legacy?
The specific legatee (beneficiary) bears the cost unless the will states otherwise.
Who receives income generated by a specific legacy (e.g. dividends) after the testator’s death?
The specific legatee is entitled to the income from the date of death, but only receives it once the gift is formally transferred.
Who is responsible for litigation costs if a third party challenges the deceased’s title to a specific gift?
The specific legatee bears the cost of litigation.
Steps in Distributing the Estate:
.1. Settle all debts, liabilities, and testamentary expenses.
- Distribute specific legacies (e.g. property, jewellery, shares).
- Distribute pecuniary legacies (fixed monetary amounts).
- Distribute the residuary estate (remaining assets).
Why might a specific legacy fail?
It fails due to ademption—when the asset is no longer part of the estate at the time of death.
When is a specific legatee entitled to claim dividends or income from shares?
After the gift has been formally transferred to them by the personal representatives.
What happens to the income from a specific legacy if the gift hasn’t yet been transferred?
The income is held until transfer; the beneficiary is not entitled to early distribution.
In what circumstance must an assent by personal representatives be made by deed?
An assent must be made by deed when the personal representatives include obligations on the recipient, such as indemnity covenants, to ensure the covenants are legally enforceable.
