Intestacy, Wills & LPA's Flashcards Preview

AF1 - Tax & Trusts > Intestacy, Wills & LPA's > Flashcards

Flashcards in Intestacy, Wills & LPA's Deck (11):
1

Disclaimer - what is it

A disclaimer is a decision not to inherit but must be made before anything is accepted and must be in writing within 2 years of death.
There must be no consideration for money or money’s worth.
The written instrument must contain a statement that the disclaimer is to have an effect for IHT as if the disclaimed benefit had never been conferred

2

Deed of Variation

Has to be done within 2 years
Has to be signed by beneficiaries who will be impacted and must be 18 and of sound mind
Has to be no consideration for money or moneys worth
Has to refer to the will
Has to have a statement that the variation is to have an effect for IHT as if the deceased made it
The personal representatives must sign if the IHT goes up

3

Revoking LPA’s

The donor can revoke if they have capacity
On the bankruptcy of the donor (not regarding personal welfare)
On the death of the attorney
On the bankruptcy of the attorney (not regarding personal welfare)
On incapacity of the attorney
On divorce between donor and attorney

4

Wills - and how they are invalidated

Where the will has been destroyed before the testator’s death it is invalid
Where the testator marries and then dies prior to changing their will it is automatically revoked unless the will has been written on the assumption of marriage
Where the testator divorces and then dies without changing their will any benefits to the former spurs are cancelled unless the wording says divorce will not affect entitlement

5

Bankruptcy

In bankruptcy, if you’re a trustee your suitability can be called into question
In bankruptcy, if you are a beneficiary to a trust the trimester in bankruptcy can claim income and capital rights.
In bankruptcy a house would pass to the trustee as they can collect all the bankrupts property
A pension does not form part of the estate so cannot be claimed
A business set of tools/equipment cannot be claimed

6

Duties of an executor

Determining the assets and liabilities of the estate
Obtaining probate
Collecting in the assets of the estate
Paying debts
Settling any tax liabilities
Completion of necessary accounts
Pay IHT
Complete an IHT account including gifts
Distribute the estate once probate is received

7

Intestacy Rules

If an individual dies leaving
Spouse only - gets everything
Spouse plus issue - spouse takes chattels, £250k plus half of the remainder
No spouse - everything to children
If no children, then
Grandchildren
Parents
Siblings
1/2 siblings
Grandparents, aunties and uncles
Crown

8

LPA’s

LPA’s replaces EPA’s in 2007, there are now 2 types of LPA - health and welfare and financial decisions

9

Benefits of LPA’s

Planning in advance the decisions they want to be made
The people they want to make the decisions
And how they want to make decisions

10

Duties of Attorney

Making decisions in the donors best interest
Only making decisions that are authorised
Consulting with the donor prior to taking action
Keeping their own money separate
Keeping the donors affairs confidential
Ensuring there is no conflict of interest

11

Restrictions in bankruptcy

Must disclose all the property to the trustee
Must not conceal any debts or assets
Must not destroy or falsify records
Must not make any false statements to the trustee
Must not dispose of property to defraud creditors
Must not fraudulently give preference to 1 creditor
Must not leave the country with any property
Must not obtain credit without disclosing status
Cannot obtain more than £500 credit