Wills and the Administration of Estates MCQS Flashcards

Question

**A testator died recently. The testator’s will contains a gift of £10,000 to the testator’s brother and gives the remainder of the estate equally to the testator’s spouse and children. The testator’s spouse, and the spouse of the testator’s brother, witnessed the will.** **Which one of the following accurately describes the effect of the man’s will?** A) The will has no effect as it was not properly executed. B) The man’s brother and children will inherit under the will. C) The man’s spouse, brother and children will inherit under his will. D) The man’s spouse and brother will inherit under his will. E) Only the man’s children will inherit under his will.

Answer 1

E) Only the man’s children will inherit under his will. (Correct. Where a beneficiary (or their spouse) witnesses a will the beneficiary cannot inherit under the will. In this example the testator’s spouse and the spouse of the testator’s brother witnessed the will so neither the spouse nor brother will receive any benefit. Only the gift to the children is effective. The other options were incorrect because: S.15 Wills Act only applies to gifts under the will – it does not affect whether or not the will was properly executed S.15 applies to a gift to a beneficiary who witnesses a will and any gift to their spous)

Answer 2

A) The will has been properly executed (Correct. S 9 Wills Act 1837 requires the testator to sign the will (or acknowledge his signature) in the presence of two witnesses. The other options were incorrect because: - S 9 permits the testator to acknowledge his signature - The marital status of the witnesses is irrelevant - Provided s. 9 requirements are met there is no additional obligation for everyone in involved to be present throughout the execution process (although this is good practice) - There is no requirement for the witnesses to sign the will in the presence of each other, only the testator)

Answer 3

B) Cathy and Esther will be appointed as executors of the estate. If any trust arises following the testator’s death, Cathy and Esther will also be the trustees (Correct. Andrew cannot act as he has pre-deceased the testator and Clause 2 appoints Esther in his place. Clause 2 also confirms that the executors should also act as trustees of any trust. The other options were incorrect because: - The revocation clause revokes any will or codicil made previously -Esther is appointed as a replacement for Andrew (there is no option for Cathy to act alone) -A will should contain a date but this can be at the end or as part of the commencement clause – it does not need to be part of the revocation clause)

Answer 4

C) Your client cannot charge for their time as there is no express power allowing this. (Correct. There is no express power to charge in the will and the statutory power to charge applies only to professionals. The other options were incorrect because: Your client cannot charge for their time Express powers take priority over the implied statutory terms in a will where there is conflict)

Answer 5

A) No guardians are appointed following the testator’s death (Correct. As the testator is survived by their civil partner no guardians are appointed by clause 4. The other options were incorrect because no guardians are appointed as the testator's civil partner is still alive, and Clause 2 imposes a moral obligation rather than a legal one)

Answer 6

C) Nothing (Correct. The gift of the ring is a specific legacy. If the testator no longer owns the item at the date of their death then the gift in the will cannot be given effect to. In the absence of any express clause providing for an alternative gift, the clause fails and the beneficiary will receive nothing. The other options were incorrect because: · The original gift adeems because the testator does not own the item specifically left by the will -There is no cash or chattel alternative which can be given as there are no express words permitting this)

Answer 7

C) A clause giving the testator’s share of the holiday home to their sister (Correct. The holiday home is owned as tenants in common and therefore the testator’s share passes in accordance with the will and is not automatically inherited by the sister as the other co-owner. As we know the residue will not be left to the testator’s sister, an express clause giving the testator’s share of the holiday home to their sister is required. The residence owned as joint tenants will pass by survivorship to the surviving co-owner automatically. As the testator wants their civil partner to inherit in any event no express clause in the will is required to achieve the testator’s wishes. The other options were incorrect because: - No severance of the joint tenancy is required as the testator wants the surviving co-owner to inherit the residential house - No express clause within the will is needed re the residential house; the law of survivorship achieves testator’s aim - An express clause giving the share of the holiday home to the sister is required as this interest will otherwise pass as part of the gift of residue to the testator’s children)

Answer 8

A) The testator’s nephew will receive the ring. The testator’s brother will receive the £35 cash and the van (Correct. The definition of chattels excludes business assets (the van), cash (£35) and assets owned solely as an investment. The ring was not owned solely as an investment so will be included in the gift of chattels, the other items are not chattels so will pass under the gift of residue)

Answer 9

E) The gift of the piano is made free of tax but subject to the costs of transfer. (Correct. Where a will is silent, a legacy in a will is made free of tax but subject to the costs of transfer. The other options were incorrect because the general rules were incorrectly stated and the executors do not have a general discretionary power to decide where the costs fall)

Answer 10

B) The gift to the testator’s sister will fail and she will receive nothing (Correct. The use of the word “my” in the specific gift overrides the general rule in s.24 Wills Act 1837 and the property is identified as at the date of the will. As the testator no longer owns the blue car then this gift adeems and the testator’s sister receives nothing. The other options were incorrect because: The identify of people is established with reference to the date of the will Gifts of collections comprise the assets that fall within the collection as at the date of the testator’s death whether acquired before or after the will was executed)

Answer 11

B) The testator’s son will inherit the property subject to the mortgage (Correct. The general rule under s.35 Administration of Estates Act 1925, which applies here in the absence of any express wording to the contrary, states that the property charged shall bear the primary liability for repayment. The other options were incorrect because: The executors are not required to sell the property - they can transfer the property to the beneficiary subject to the charge The residue of the estate is not liable for repayment of the mortgage)

Answer 12

A) B and C only (Correct. The gift is made contingent on the children reaching the age of 21. A has satisfied this contingency by the time the testator dies so their gift vests immediately. The other two children have not satisfied the contingency so their gifts are contingent. That one is an adult and the other a minor makes no difference. The other options were incorrect as A has a vested interest, and B and C are under the age of 21 so have not satisfied the contingency)

Answer 13

D) When the first of her grandchildren reaches 18 (Correct. The class closing rules mean the class of beneficiaries is identified when the first beneficiary has a vested interest. This has not yet occurred as all of the testator’s grandchildren are under the age of 18. Once the first of them reaches 18 the class will close. The other options were incorrect because: - The clause will not fail for uncertainty (the class closing rules create certainty) - No beneficiary has a vested interest at the date of her death - Without express wording to suggest otherwise, the date of the will is not the correct reference point - It is possible to close the class without having to wait for it to be impossible for further members to be born)

Answer 14

B) The testator’s two surviving children will each inherit 1/3 of the residue. The two grandchildren will each inherit 1/6 of the residue. (Correct. The gift to the testator’s sister will lapse because she predeceased. S.33 Wills Act 1837 will not create an implied substitution in favour of the testator’s niece because the original gift was not made to the testator’s issue. S.33 does apply to the gift to the children. Each child would be entitled to a 1/3 share, but one child has pre-deceased the testator. Their 1/3 share will be inherited equally by their two children, who receive 1/6 each. The other options were incorrect because: - The testator’s niece does not receive anything - The testator’s grandchildren are entitled to share between them the 1/3 of the residue their parent would otherwise have inherited)

Answer 15

C) Such financial provision as it would be reasonable in all the circumstances for a husband or wife or civil partner to receive whether or not that provision is required for his or her maintenance. (Correct: The surviving spouse/civil partner standard does not require the court to consider whether the provision is required for the applicant’s maintenance)

Answer 16

A) The applicant’s age and the duration of their relationship with the deceased (Correct: Although the court is required to consider any matter that they consider relevant in the circumstances, the applicant’s age and duration of their relationship with the deceased are not expressly referred to in section 3(1) IPFDA)

Answer 17

B) The court must consider the applicant’s age and duration of the marriage or civil partnership, as well as any contributions made by the applicant to the welfare of the deceased (including any contributions made by looking after the home or caring for the family). The court must also take into account what the applicant might reasonably have expected to receive on divorce or dissolution of the civil partnership (Correct: The court considers all the factors above. There is no express requirement to consider whether the deceased maintained the applicant, or the length of their relationship prior to marriage/civil partnership (although these may be considered under the common guidelines if the court considers them relevant in the circumstances).)

Answer 18

E) If the client distributes the chattels to her children she would make a disposal for CGT purposes. (Correct. The clause in the will is a precatory trust. The client is the beneficiary of the chattels. However, her father hoped that she would distribute them to his grandchildren. No legal trust is created so the client is not a trustee and has no obligation to comply with her father’s wishes. If she does give the chattels to the grandchildren, s 143 IHTA applies automatically to treat these gifts as if they were made by her father’s will (and not the client) for IHT purposes. There is no equivalent for CGT however, so the gifts will be a disposal by the client for CGT purposes. The other options were incorrect because: S 143 does not create a tax-free gift under the will A gift of chattels made by the client to the grandchildren would ordinarily be a PET but the effect of s 143 is to treat these gifts as having been made by the will of the client’s father, and so she will not make a PET No formal trust is created The client has no obligation to comply with the wishes of her fathe)

Answer 19

C) The client’s objectives can only be met if she varies her inheritance. (Correct. A variation would achieve all of her objectives. By way of variation the client can re-distribute part of her inheritance and elect who should benefit instead. The writing back effect for both IHT and CGT will apply provided the variation is made in writing within 2 years following her brother’s death. The other options were incorrect because: A disclaimer could not be used because the client cannot disclaim part of her inheritance, neither can she nominate the alternative beneficiary (under the will any disclaimed inheritance would pass directly to her children, not the step sister) The time limit for varying the distribution is 2 years following death)

Answer 20

A) Your client should make an election for s 142 IHTA to apply to the variation. (Correct. If the client enters a variation and claims the writing back effect for IHT under s 142 IHTA her father’s estate will be taxed as though £50,000 was given to the client’s children and the remainder to the client. There is no change to the IHT liability on her father’s estate as a result (none of the beneficiaries are exempt) therefore consent from her father’s PRs is not required. The advantage to claiming the writing back effect under s 142 is that the client will not be making PET and so avoids the risk of this failing if she died within 7 years. The other options were incorrect because: No writing back for capital gains tax purposes should be made because the subject matter of the variation is cash- which is exempt from CGT. There is an advantage to making an election under s 142 IHTA – the gift of £50,000 to the client’s children is treated as having been made from her father’s estate and will not be a PET by the client. There would be no change to the IHT liability following the variation so PR consent is not required.)

Answer 21

B) £1,000,000 (Correct. The man has his own NRB of £325,000. The man’s PRs can also claim the TNRB in respect of his civil partner who died before him. We know that the man’s civil partner left all of his estate to the man. Therefore, the man’s civil partner did not use his own NRB because his whole estate qualified for civil partner exemption. The RNRB of £175,000 also applies. The man left a qualifying residential interest (his home) to his lineal descendants (his children). As the man’s civil partner did not use his own RNRB, this can also be claimed by the man. As neither of them made any lifetime transfers the maximum amounts are available.)

Answer 22

D) £0 (Correct: The whole of the man’s estate passes to a life interest trust in which his spouse is the life tenant. Spouse exemption applies to the whole estate and no inheritance tax is payable. The other options were incorrect because spouse exemption was not applied)

Answer 23

B) £650,000 (Correct. The woman has her own NRB of £325,000. The woman’s PRs can also claim the TNRB in respect of her civil partner who died before her. We know that the woman’s civil partner left all of her estate to the woman. Therefore, the woman’s civil partner did not use her own NRB because her whole estate qualified for civil partner exemption. As neither made any lifetime transfers the maximum amounts are available. The RNRB does not apply as the total value of the woman’s estate is above the threshold)

Answer 24

A) £70,000 (Step 1: The man’s cumulative total was 0 as he made no lifetime gifts. Steps 2/3: The man’s taxable estate includes both properties and the bank accounts with a total of £670,000. Step 4: The man’s debts and funeral costs which total £20,000 can be deducted, leaving £650,000. Step 5: No exemptions or reliefs apply. Step 6: The man can claim his own RNRB. No transferrable RNRB applies as he does not have a spouse who pre-deceased. His main residence is a QRI and it passes to his son (a lineal descendent) absolutely. The amount of the RNRB is £150,000 (capped at the value of the QRI). The let property is not a QRI so an RNRB can be claimed. The total RNRB is: £150,000. Once applied to his estate, £650,000 - £150,000 = £500,000 remains. Step 7: The man’s basic NRB is £325,000 (his cumulative total was 0 – so no deduction is made). No transferrable NRB applies as he did not have a pre-deceasing spouse. 0 - £325,000 @ 0%. Balance of £175,000 (£500,000 - £325,000) @ 40% = £70,000)

Answer 25

D) £80,000 less a discount to reflect the fact that the property was co-owned. (Correct: The value of the woman’s share is £80,000 (she owned 80% of the total worth £100,000). The woman co-owned the property and a discount to reflect the fact that the property was co-owned can be applied. The other options were incorrect because: - The property does not pass by survivorship, but in any event, the value of the woman’s share is taxable whether owned as joint tenants or tenants in common - The value of her share is proportionate to share she owned, not the number of co-owners. A 50/50 split applies to joint tenants and those owning as tenants in common in equal shares. - The related property rules apply to married couples and are not relevant here. - A discount is available because the couple were not married. It would not have been available if they were)

Answer 26

False The authority for an executor to act as PR does derive from the will, whereas the authority for an administrator to act derives from the grant of representation. However, an executor will still need to apply for a grant of representation because many institutions will insist on seeing the grant as proof of the executor’s authority to act before releasing funds/assets to them.

Answer 27

False Correct This was an incomplete statement. The administration process also includes other obligations, including payment of the deceased’s debts and administration expenses.

Answer 28

False Correct The grant of representation confers power on the PRs to deal with the succession estate assets, ie those items passing under the will or under intestacy, and does not, for example, give PRs the right to have assets passing by survivorship transferred into their name.

Answer 29

True The executor of an estate may be expressly appointed in the role of trustee of any trust that arises following death, but that this is not always the case.

Answer 30

False The role of a PR is fiduciary in nature but there is no prohibition on a PR also being a beneficiary. There is no conflict of interest as the PR does not receive benefit in their capacity as PR.

Answer 31

True (A solicitor may become involved if they are appointed as PR by a will or if the PRs instruct a solicitor to carry out administrative services)

Answer 32

False (Correct. There is no duty to complete the administration within the “executor’s year”. A PR is not obliged to distribute the estate before the one-year anniversary of death, although after this period they must be able to justify any delay)

Answer 33

E) A duty to report to HMRC about the estate assets and liabilities and pay any inheritance tax due. (Correct. Prior to the grant the PR is not able to collect in and administer the deceased’s assets and the primary duty the PR has is to report to HMRC and pay the IHT, both of which must be completed before the grant is issued)

Answer 34

A) The executor has a duty to administer the estate. The executor has the power as PR to sell estate assets. If he acted as the purchaser he would be in breach of his fiduciary duty, even if a fair price was paid (unless consent of the court or beneficiaries was obtained) (Correct. An executor who accepts office has a duty to administer the estate in full under s.25 AEA. A PR is subject to fiduciary duties which include the duty to avoid a position of conflict. Acting as both buyer and seller of the estate assets (without court or beneficiary authorisation) would place him in a position of conflict and would therefore breach that duty, even if there was no loss suffered to the estate and fair market value was paid)

Answer 35

C) The PRs have a duty to invest the cash in the bank account to achieve a greater rate of return than the current rate of interest (Correct. As the administration is likely to take time the PRs have a duty to maintain the estate and actively invest to achieve better rates of return than are being paid in respect of the current account. The other answers were incorrect because: - Although the general power of investment gives the PRs the power to invest as if they were absolutely entitled, their discretion is not absolute. They must invest having regard to the standard investment criteria and must seek and follow appropriate advice. - The statutory power to invest (s.3 Trustee Act 2000) does apply to PRs - There is no obligation to retain original assets - The statutory duty of care applies to the exercise of investment powers and is applicable to PRs as well as trustees)

Answer 36

E) Transfer the shares to the friend plus a cash sum equivalent to the difference in value between the shares (at the date of appropriation) and £10,000. (Correct. S.41 AEA provides the PRs with the power to appropriate assets in or towards a beneficiary’s entitlement. As the value of the shares is less than the legacy the PRs may appropriate the shares and then make a balancing cash transfer of the difference. The consent of the residuary beneficiary is not required as the shares were not specifically given to them)

Answer 37

C) The PRs cannot give the money to G directly but can appoint trustees of the legacy and pay the money to the trustees (Correct. By s.42 Administration of Estes Act 1925 the PRs may appoint trustees of a legacy and pay the amount of the legacy to the trustees, who hold on trust for the minor beneficiary. The trustees will provide confirmation of the receipt to the PRs and so the administration can be completed. The other options were incorrect because: - There is no discretion to pay the money directly to a minor - The PRs do not have to wait until the minor reaches 18 or married - The power to pay the money to a beneficiary aged 16 or older must be conferred by the will and in this scenario we know that the will does not contain any administrative provisions)

Answer 38

D) The creditor may bring a devastavit claim against the PRs on the grounds of maladministration (Correct. A claim against a PR is referred to as a devastavit. Where the estate has not been distributed to those who are entitled to it the grounds for a claim would be maladministration. The other options were incorrect because: - Duties are owed to both beneficiaries and creditors - The wrongdoing would not amount to a breach of fiduciary duty - An unpaid creditor could also claim against the estate beneficiaries - The PRs owe a personal liability to a creditor who was not paid from the estate)

Answer 39

E) Despite the express clause in the will the executor would remain liable for fraud. (Correct. A clause which limits the executor’s liability is enforceable but not to the extent it attempts to avoid liability for fraud. The other options were incorrect because: - it is not possible to remove all personal liability irrespective of how the executor behaves. - both lay and professional executors have personal liability - limitation of liability clauses are enforceable in respect of an honest mistak)

Answer 40

A) Compliance with the s.27 Trustee Act 1925 notice procedure (Correct. S.27 notices are intended to help protect the PRs from personal liability to unknown creditors and beneficiaries. The other options are possible steps a PR might take if they know about a beneficiary but cannot locate them)

Answer 41

E) Grant of probate (Correct. The deceased left a will that appoints an executor. It does not matter that one of the executors has pre-deceased, the remaining executor can apply. It does not matter that the will fails to dispose of all of the deceased’s assets)

Answer 42

B) Grant of letters of administration (with will) (Correct. The deceased left a will which does not appoint any executors who can act)

Answer 43

D) Grant of probate (Correct. The deceased left a will that appoints an executor. It does not matter that the deceased died partially intestate and only one executor is required even where minor interests arises)

Answer 44

A) A grant is required to deal with the property and the bank account only (Correct. The life policy proceeds do not fall within the succession estate and may be paid directly to the deceased’s spouse and no grant is required to deal with household possessions. The deceased’s share of property owned as tenants in common will pass as part of the succession estate and a grant is required. As there is more than small amount in the bank account this would usually require a grant to be provided before the bank would release the funds)

Answer 45

C) A grant is required to deal with the property and the life policy only (Correct. A grant is required to deal with assets within the succession estate unless an exception applies. A property owned as tenants in common, and a life policy where proceeds are payable to the estate, are items that fall within the succession estate and will require the PRs to take out a grant to deal with them. The account with a balance of less than £5,000 could be collected under the exception in the Administration of Estates (Small Payments) Act 1965 and no grant is required to deal with household possessions)

Answer 46

C) The estate could be administered without the need for a grant (Correct. A property owned as joint tenants does not fall within the succession estate and passes under survivorship rules. The life policy proceeds do not fall within the succession estate and may be paid directly to the deceased’s spouse. The building society account with a balance of less than £5,000 could be collected under the Administration of Estates (Small Payments) Act 1965 and no grant is required to deal with household possessions)

Answer 47

A) The PRs should obtain a professional valuation for the ring but may record estimated values for the dining table and the painting. (Correct. The sale value of the assets at the date of death is relevant. Estimated figures may be used for ‘low value’ chattels, which would include the dining table (£200 sale value) and the painting (£300). The ring is a single item worth more than £500 so a professional valuation should be obtained)

Answer 48

A) Transferring the house and chattels into the name of the executors (Correct. The joint tenant property passes automatically to the survivor under the survivorship rules and does not form part of the succession estate for administration purposes and would not be transferred into the names of the executors)

Answer 49

B) Further enquiries are needed to establish whether or not the deceased held a 50% share of the property and joint bank account. (Correct. Where an asset is owned jointly (whether a property or bank account) enquiries are needed to establish what the terms of that co-ownership are. You cannot assume that the deceased held a 50% share or that all joint property is owned as joint tenants. The other options were incorrect because it was assumed that the deceased owned 50% of one or both of the assets)

Answer 50

C) None of them (Correct. The chain of representation only applies where a sole surviving executor, who has taken out a grant of probate, dies before administering the estate and appoints their own executor in turn. The others were incorrect because: Estate A: the executor died before taking the grant. Estate B: there is a surviving executor who will act Estate C: the executor did not survive the testator Estate D: the sole surviving executor died intestate so cannot have appointed an executor for their own estate)

Answer 51

B) The brother (Correct. The civil partner cannot act because of the effect of s.18C Wills Act 1837. The sister’s executor cannot act because the chain of representation does not apply in this scenario. The brother may apply as the sole surviving executor)

Answer 52

A) B, C, D and E. Power may be reserved to A who could apply once they reach the age of 18 (Correct. A minor may be appointed by will but cannot act until they reach the age of 18. Power may be reserved to them until this time. A maximum of four executors may apply, so B, C, D and E can be named on the grant)

Answer 53

A) B, C, D and E. Power may be reserved to A who could apply once they reach the age of 18 (Correct. A minor may be appointed by will but cannot act until they reach the age of 18. Power may be reserved to them until this time. A maximum of four executors may apply, so B, C, D and E can be named on the grant)

Answer 54

C) None of the executors named in the will (Correct. The testator’s former civil partner cannot act (s.18C Wills Act 1837) unless the will expressly states otherwise (which it does not). A minor and someone who lacks capacity are both unable to act)

Answer 55

C) Renunciation (Correct. The spouse with an entitlement to apply as administrator may renounce that right even if she has intermeddled. The other options were incorrect because: - Reserving power is not an option for administrators - She cannot act alone where there is a minor interest - Doing nothing is not a viable option)

Answer 56

C) The sister can apply for a grant of double probate (Correct. The 2nd grant issued in the estate is a grant of double probate. The other options were incorrect because; - the new grant was incorrectly stated -the sister has no entitlement to act under the grant originally issued in the sole name of the spouse - reserving power does not preclude a later application when the administration is still ongoing -the original grant will have referred to notice having been given to the sister who reserved power)

Answer 57

B) A low value excepted estate - the estate is worth less than £325,000 (Correct. The gross estate is less than the nil rate band, foreign property is less than £100,000, trust property is less than £250,000 and lifetime gifts are less than £250,000. The deceased had never married so no transferrable NRB applies and the relevant NRB amount to consider was £325,000. The other options were incorrect because no spouse or charity exemption applied (so the estate could not be an exempt excepted estate), the relevant NRB threshold to consider was a single NRB, and the value of the assets described were below the values at which the estate would be prevented from being excepted.)

Answer 58

B) A non-excepted estate (Correct. The gross value of the estate is above the nil rate band (only one is available) and no spouse or charity exemption applies. IHT is payable and also the value of foreign property is greater than £100,000. The other options were incorrect because tax was payable on this estate so the estate could not be excepted)

Answer 59

D) A non-excepted estate (Correct. Although the gross value of the estate is below the NRB and no IHT is payable, because the value of the trust property is above £250,000 this estate cannot be excepted. The other options were incorrect as they did not take into account the value of the trust interest)

Answer 60

A) The PA1A is required and at least two administrators will be appointed under NCPR 22 (Correct. Where the deceased died without making a will the correct form is the PA1A. Two administrators are required because there will be at minor interests)

Answer 61

B) Confirm their familiar relationship with the deceased and their beneficial entitlement to the estate (Correct. If NCPR 22 applies the deceased died intestate. The entitlement to apply derives from the relationship with the deceased and their right to receive a share of the estate under intestacy, so both must be stated. The other options were incorrect because: - they were either incomplete or: - It is not always necessary to clear-off anyone else e.g. when the person with the greatest entitlement will be applying. - If NCPR 22 applies the deceased did not leave a valid will)

Answer 62

E) The grant can be issued in the deceased’s true name and also any common name in which they held assets. (Correct. The full name of the deceased should be included in the application and where the deceased owned assets in a common name this should also be stated so the grant can be issued in both names. The other options were incorrect because: - The grant should be issued in the true name of the executors- if this is not how their name appears in the will, the discrepancy can be explained - The application should refer to all executors named in the will- and if any are not applying the reason for this should be explained - Most probate applications can be made online - It is the value of the deceased’s succession (not taxable) estate which appears on the Grant)

Answer 63

B) Original will and form of renunciation (Correct. When an executor renounces power they will completed a form of renunciation and this must be submitted along with the application for probate. The original not a copy will must also be provided. The other options were incorrect because: - The original will is needed - The IHT 400 is sent to HMRC not probate registry)

Answer 64

No Correct Correct. The executor has already taken out the grant in their own name. The probate registry would only be sent the power of attorney if the grant was being issued in the name of the attorney i.e. the executor was delegating their right to apply.

Answer 65

D) The probate registry fee (Correct. This is sent to the probate registry as part of the grant application. The other options were incorrect because there was no will (the deceased died intestate) and the IHT 400 is not relevant)

Answer 66

A) The woman’s estate is solvent because there are sufficient funds to pay all of her debts. It does not matter if the legacies cannot be paid in full.

Answer 67

D) Only the unsecured debts will be repaid from the residue (Correct. T’s brother will inherit the house subject to the mortgage (the mortgage will not be repaid using other assets in the estate) – s.35 AEA 1925. The unsecured debts will be paid in the statutory order prescribed in Sch 1 Part II AEA – the application of which directs the repayment of debts from the residue (as there is no undisposed of part of the estate). The other options were incorrect because: - The legacy to T’s friend is unaffected - The house is inherited subject to the mortgage charge and the mortgage debt is not repaid from other estate assets – the value of the house is sufficient to meet the whole of the secured loan - The house is only subject to the secured debts - The burden of debts is not shared proportionately between the whole of the estate)

Answer 68

D) The executors should sell the jewellery (Correct. This would be the best option. While the executors have a legal duty to repay the deceased’s debts, and provided they identify items in accordance with the statuary order, they are not legally obliged to sell one item in preference to another, there are practical considerations which they should take into account. The other items would be less suitable because: - the painting has increased significantly in value and may result in a capital gains tax charge - a beneficiary has specifically asked for the car, and although the executors don’t have to agree with the request, in this case there is no reason not to because alternative assets can be sold - the motorbike would not provide the cash sum that they need.)

Answer 69

B) £5,000 (Correct. The PRs are treated as having made a gain equal to the difference in value between the date of death value (£40,000) and the sale proceeds (£45,000). The other options were incorrect because: - Gains accrued during the deceased’s lifetime were included - Sale proceeds are not equivalent to the ‘gain’ - The PRs made the sale not the beneficiary – so the gain is attributed to the PRs)

Answer 70

B) The PRs have made neither a gain nor a loss. The deceased’s mother has made a gain and the deceased’s brother has made a loss (Correct. Where assets are transferred to beneficiaries there is no disposal by the PRs, so they make neither a loss nor a gain. The values at the date of transfer are not relevant. A beneficiary is deemed to acquire the asset at probate value so the deceased’s: - mother acquired the piano with a value of £1,200 - brother acquired the shares with a value of £3,500. When the assets were sold by the beneficiaries, the deceased’s: - mother sold the piano for £1,800 and would have made a gain of £600 - brother sold the shares for £2,500 and would have made a loss of £1,000)

Answer 71

E) The PRs should complete a tax return for the deceased for the tax year of death (to include £2,000 rental income) but do not need to account to HMRC for the estate savings income. (Correct. The deceased’s PR must account to HMRC in respect of the deceased’s untaxed rental income for the tax year of death. They are not however required to account to HMRC for the estate savings income as this was bank interest of under the threshold of £100, and there is no other estate income.)

Answer 72

D) PA1P and a form of renunciation. (Correct. The man left a valid will so form PA1P is required, even though the named executors (his spouse and brother) will not be making the application. Inheritance tax will be payable following the man’s death. The value of his taxable estate is above the NRB and will pass to non-exempt beneficiaries. The man does not have any residential property so the RNRB will not apply. We do not know whether the TNRB may be claimed or not, but even if it did, the value of his estate is greater than 2 x NRB. As such the IHT 400 would be completed and sent to HMRC (not the Probate Registry). HMRC (not the executors) forward an IHT421 to the probate registry. Renunciation is only possible if the executor has not intermeddled; the man’s brother has not intermeddled and renunciation is possible. A form of renunciation is always required where an executor is renouncing their role)

Answer 73

C) The son is able to complete the administration of his mother’s estate under the authority conferred by the grant of probate of his father’s estate. (Correct. The chain of representation under s.7 Administration of Estates Act 1925 applies. As the woman’s spouse had taken out the grant of probate of her estate before he died, and their son had taken out the grant of probate of his father’s estate, the chain of representation is complete. The son can complete the administration of both estates under authority conferred by the grant in his father’s estate. No further application is required)

Answer 74

B) The woman’s sister (Correct. The woman left a will which does not validly appoint any executors. Therefore NCPR 20 applies. Under NCPR 20 the person with the greatest entitlement to apply is the beneficiary of the woman’s residuary estate, here her sister. The other options were incorrect because neither the mother nor son are beneficiaries and do not rank in priority above the sister. Only one PR is required (there are no life or minor interests) and the chain of representation does not apply)

Answer 75

E) Placing a notice in accordance with s.27 Trustee Act 1925. (Correct. All of the other options are feasible where there is a known but missing beneficiary. The protection afforded by a s.27 Trustee Act 1925 notice is in relation to unknown creditors and beneficiaries, not those who are known about but cannot be located.)

Answer 76

£50,000 Correct: The woman has made one PET of £50,000 in the last seven years.

Answer 77

A PET which is made 9 years before death Correct: A PET made more than 7 years before death is not chargeable.

Answer 78

Tax will be payable at the lifetime rate of 20% Correct: The gift is an LCT. The man survives more than seven years after the LCT so it is not reassessed at the death rate.

Answer 79

£305,000 Correct: Two of the gifts were made in the seven years before the man's death so are included in the cumulative total.

Answer 80

His estate can claim a basic NRB, his wife’s basic NRB, his RNRB and his wife’s RNRB Correct: The man and his wife both died with full basic NRB available (his PETs were made more than 7 years ago so the man’s cumulative total when he died was zero). The wife also did not use her RNRB so this is also available to transfer.

Answer 81

£1,000,000 Correct: A surviving spouse can make use of their own basic NRB (£325,000) and RNRB (£175,000) and receive a transfer of up to 100% of the basic NRB and RNRB from the estate of their deceased spouse.

Answer 82

£25,000 Correct: The £25,000 LCT is included in the cumulative total as it was made within the 7 years prior to the LCT. The other options were wrong because neither PET has yet failed (so are not included within the cumulative total) and the first LCT was made more than 7 years before the recent LCT.

Answer 83

£63,800 Correct: The woman has a cumulative total of £0 (Step A) and is able to use her AE from the year of the LCT and the previous year to reduce the value of the LCT to £644,000 (Step C). The NRB is deducted from the chargeable value, leaving £319,000 to be taxed at the lifetime rate of 20% Step D). The other answers were wrong because they missed one or both lots of AE and/or applied IHT at the death rate of 40%.

Answer 84

£63,800 Correct: The woman has a cumulative total of £0 (Step A) and is able to use her AE from the year of the LCT and the previous year to reduce the value of the LCT to £644,000 (Step C). The NRB is deducted from the chargeable value, leaving £319,000 to be taxed at the lifetime rate of 20% Step D). The other answers were wrong because they missed one or both lots of AE and/or applied IHT at the death rate of 40%.

Answer 85

£8,760 Correct: The man had a cumulative total of £0 (Step A) and was able to use his AE from the year of the LCT and the previous year to reduce the chargeable value to £544,000 (Step C). The NRB is deducted from the chargeable value, leaving £219,000 to be taxed at the death rate of 40% (Step D). As the LCT was 4 years before death, taper relief is applied at 40% (Step E) and then credit is given for the IHT paid during his lifetime (Step F). The other answers were wrong because they failed to apply one or more of the AE at Step C, taper relief at Step E or credit for the lifetime tax at Step F.

Answer 86

The income tax, credit card bill and funeral bill Correct: The deceased’s income tax and pre-death liabilities are deductible, as are funeral expenses. The other expenses are not deductible for tax purposes (but can be paid from the estate assets).

Answer 87

When valuing the taxable death estate, the solicitor did not include the deceased's share of a house held as joint tenants with her brother because joint tenancy assets pass via survivorship.

Answer 88

D) Step 1 - Calculate the cumulative total, Step 2 - Identify the taxable estate, Step 3 - Value the taxable estate, Step 4 - Deduct debts, Step 5 -Apply exemptions and reliefs, Step 6 - Apply RNRB, Step 7 - Apply NRB and calculate tax Correct. It is necessary to start by calculating the cumulative total, then identify and value the taxable estate. Deduct debts from the gross value of the estate to reach the net value, then apply exemptions and reliefs. RNRB should be applied before the basic NRB, then calculate the tax.

Answer 89

The woman’s daughter and the trustees of the trust Correct: The liability for paying tax on the free-estate (here the bank accounts and share of the property owned as tenants in common) lies with the woman’s daughter as her executor under the general rule. The liability for paying tax on the trust interest lies with the trustees of the trust.

Answer 90

None of them Correct: The general rule is that the residuary estate bears the burden of the IHT due in respect of the assets passing to the PRs and that other gifts in the will are made free of tax. The other options were incorrect because they involved using assets given away specifically in the will and did not form part of the residuary estate.

Answer 91

The trust assets cannot be used to pay any of the IHT due Correct: The LCT was made more than 7 years before her death and is therefore not assessed to IHT at this time. As such, none of the trust assets can be used to meet the IHT bill. The other options were incorrect because: The PET failed and if IHT is due in respect of the lifetime transfer, the woman’s daughter would be liable to pay this. Grossing up occurs in respect of the IHT due on creation of the trust, not following death. The burden of IHT would not be shared between the beneficiary of a specific gift and the residuary beneficiary unless the testator had given a direction in her will to vary the general rule. The expression “all taxes” does not vary the general rule.

Answer 92

False Correct: There are exemptions and reliefs that apply to both lifetime transfers and the death estate.

Answer 93

False Correct: Exemptions and reliefs are available by virtue of statutory authority and are set out in the Inheritance Tax Act 1984. Case law relating to exemptions and reliefs usually concerns a dispute over the application of statutory rules.

Answer 94

True Correct: The NRB is a 0% rate of tax. To the extent the value of a transfer falls within the NRB there is no tax to pay, which is why people sometimes confuse the NRB as an exemption/relief.

Answer 95

The gift is chargeable to IHT following the woman’s death. Taper relief applies and a 20% reduction in the IHT due can be claimed Correct: The woman has made a gift to another person during her lifetime (a PET) and then died within 7 years after making the gift (the PET has failed). The failed PET is chargeable following the woman’s death. As the woman survived more than 3 years after making the gift, taper relief will apply. The rate of taper is a 20% reduction in the IHT due (i.e. 80% of the IHT due is payable). The other options were incorrect because: -The PET is chargeable - it failed as the woman died less than 7 years after making the gift - Taper relief applies as the woman survived more than three years after making the gift - The rate of taper is 20% and therefore 80% remains payable

Answer 96

£1,000 Correct. The aunt is not a parent or grandparent so the other figures do not apply. She cannot give £1,000 to each party - the relief applies "per marriage"

Answer 97

Annual exemption of £6,000 Correct: The man can claim the annual exemption (‘AE’) of £3,000 for the tax year of the gift. As he has made no other lifetime transfers we know he has not used his AE from the previous year, so this may be claimed as well, which gives a total of £6,000. The other options were incorrect because: AE of more than £3,000 can be claimed Small gifts allowance cannot apply to a gift worth more than £250, nor to a gift into a trust For marriage exemption to apply the gift must be made to a party of the marriage (not a trust) Woodlands relief is not available in respect of lifetime transfers.

Answer 98

The gift of cash and the gift of the estate will be exempt from IHT irrespective of their value. Correct: Spouse/civil partner exemption applies to lifetime transfers and to gifts made under a will – any assets passing to the man’s civil partner will be entirely free of IHT. The other options were incorrect because: There is no upper limit to the amount of the spouse exemption where both parties are UK domiciled. Although the gift of cash to a person during the man’s lifetime would usually be a PET, this cash transfer is exempt by virtue of spouse/civil partner exemption and it does not matter when the man dies The man could leave his assets into a life interest trust and spouse exemption could still apply provided the man’s civil partner is the life tenant A standard survivorship clause in a will does not prevent the application of spouse/civil partner exemption

Answer 99

£0 – irrespective of the value of her estate. Correct: Charity exemption applies and this gift is fully exempt. The size of the gift and the value of the other assets in her estate are irrelevant. The reduced death rate of IHT at 36% is only ever applied to the chargeable assets within an estate – it is not a rate of tax applied to a charitable gift itself.

Answer 100

True Correct: All of these are available to use in respect of lifetime transfers and the death estate. You are not required to know about these exemptions in detail.

Answer 101

No IHT reliefs will be available Correct: The qualifying period of ownership has not been satisfied for either BPR or APR so neither relief is relevant.

Answer 102

BPR at £100,000 can be claimed Correct Correct. The woman owned shares in a private company (it ends with “ltd”) for more than 2 years before she died. BPR applies at 100%, ie £100,000. The other options were incorrect because: The 50% rate is not applicable (these are not quoted shares) There is no requirement to have a controlling interest for a private company shareholding to qualify The qualifying period of ownership is 2 years, not 3 The period of time her daughter owns the shares for is irrelevant when considering the availability of BPR for the woman’s estate

Answer 103

APR worth £300,000 can be claimed Correct: The woman has owned and occupied the land for the purposes of agriculture for more than 2 years. The conditions of APR are met. APR can be claimed at 100% of the agricultural (not open market) value of the land. The other options are incorrect because: APR applies at 100% in this case, not 50% APR applies to the agricultural value, not market value, of the land Where both APR and BPR apply, APR takes priority.

Answer 104

QSR does not apply to either estate. Correct. For QSR to apply both relevant estates must have been taxable –here the sister’s estate was not subject to IHT. The other options were incorrect as QSR does not apply.

Answer 105

Annual exemption Correct. The annual exemption cannot be claimed in respect of a person’s death estate. The other exemptions and reliefs were all potentially relevant: BPR in respect of the partnership interest Spouse exemption in respect of the £10,000 gift in his will Charity exemption in respect of the £2,000 gift in his will Quick succession relief in respect of the car he inherited from his brother

Answer 106

Woodlands relief is not applicable. Correct. Woodlands relief is a deferral of inheritance tax (‘IHT’) that would otherwise be payable. This is estate is not subject to IHT so there is nothing to defer.

Answer 107

Family maintenance, annual exemption and normal expenditure from income. Correct. The client could maintain their adult child while in full time education and make use of the family maintenance exemption. The client could also make regular gifts of their spare income and claim normal expenditure from income. The annual exemption would be useful for gifts that would not otherwise be covered by another exemption. The other options were wrong because: The client was not married There was nothing to suggest that the client would make multiple gifts of small amounts to other family members There is no marriage taking place

Answer 108

The client could transfer the family home to his adult children and continue to live there rent free provided the children agree. Correct – this option would not be good IHT planning. If a person gives away an asset that they continue to benefit from they make a gift with reservation of benefit (GROB). For IHT purposes the client would continue to be treated as the owner of the property and their estate for IHT purposes would be no smaller than if they had simply done nothing.

Answer 109

False Correct. A single PET would be a gift to one person which the client has indicated is not suitable. It would be better to set up a trust to benefit a wider group of people i.e. make an LCT instead of a PET.

Answer 110

False Correct: Tax evasion is a criminal offence. Tax avoidance, however aggressive, is not.

Answer 111

£690,000 Correct: The woman’s assets are worth £800,000. The funeral expenses and loan are deducted to reach a figure of £740,000. As the loan is deducted from the value of the shares (reducing them to £50,000) only £50,000 can be deducted for BPR. This results in a figure of £690,000.

Answer 112

For IHT purposes, the cottage is treated as part of the woman’s taxable estate and is valued at £500,000. For CGT purposes, the woman disposes of the cottage for £300,000, resulting in a gain of £100,000. Her daughter acquires the cottage at its market value of £300,000. Correct: The gift is a GROB which does not cease before the woman’s death so it is treated as part of her taxable estate for IHT purposes. It is also a potentially exempt transfer but it is not reassessed because it was made more than 7 years before the woman’s death, so it is not reassessed when the woman dies. The lifetime gift is treated as a disposal for CGT purposes, meaning the woman has made a gain (which will be chargeable because it’s not her main residence) and her daughter does not benefit from the free CGT uplift

Answer 113

Testator A only Correct. Spouse exemption is useful where the deceased’s estate would otherwise be taxable. Testator A has assets worth more than the nil rate band and therefore IHT would be payable if spouse exemption did not apply. The other options were incorrect because: Testator B does not have a taxable estate. The value of the assets is less than the nil rate band so no tax saving is achieved. Testator C is not married when they died so spouse exemption does not apply.

Answer 114

No IHT would be payable on the man’s estate Correct. The man’s estate is worth £340,000. The gift to charity of £34,000 qualifies for 100% relief. The remainder of his estate worth £306,000 is within the nil rate band so no tax is due. The other options were incorrect because: Although the charitable gift is worth at least 10% of the estate, after the nil rate band is applied, there is no part of the estate chargeable to tax to which the reduced rate can apply. If tax were payable, the reduced rate of IHT would apply. The reduced rate of tax does not apply to charitable gift

Answer 115

The testator could make a specific gift of the shares to his daughter. Correct. The client’s estate is taxable to the extent it does not pass to his civil partner. As such, it is efficient to give exempt assets to the chargeable beneficiary. If the shares were given to the client’s civil partner BPR would be lost. The other options were incorrect because: - The shares must qualify for BPR when the testator dies (not executes his will). - It is not efficient to make a specific gift of exempt assets to an exempt beneficiary, and there is no guarantee the assets will still qualify for BPR on the death of the civil partner. - It is not efficient for the exempt assets to form part of residue where the residue is given to an exempt beneficiary. - A gift of cash will not qualify for BPR.

Answer 116

A will gives “£400,000 to my spouse and the residue of my estate to my son” Correct. The benefit of spouse exemption applies to the specific legacy so this amount is disregarded. The IHT due is therefore calculated with reference to the assets passing under the residue to the testator’s son. The other options were incorrect because they either included a specific gift to a chargeable beneficiary (i.e. the sum of £400,000 would not be excluded before the tax was calculated) or the residue was partially exempt so its full value would not be subject to IHT.

Answer 117

A will gives “£50,000 free of tax to my son and the residue of my estate to my wife” Grossing-up is required where there is a specific gift to chargeable beneficiary made “free of tax” (the testator’s son) and the residue passes to an exempt beneficiary (the testator’s spouse). The other options were incorrect because they either do not include a specific gift to chargeable beneficiary, or the specific gift is made subject to tax.

Answer 118

£20,000 less all of the inheritance tax due on the estate Correct The will leaves a specific legacy to a chargeable beneficiary ‘subject to tax’ and the residue of the estate to an exempt beneficiary. The burden of inheritance tax falls solely on the chargeable beneficiary in this situation and the benefit of the exemption applies to the whole of the exempt beneficiary’s share. The other options were incorrect because the residue of the estate is exempt and does not bear the burden of any of the IHT. Grossing-up is irrelevant and in any event never has the effect of increasing the value of a specific legacy.

Answer 119

Whether your client chooses Option 1 or Option 2, it makes no difference to the IHT payable when your client dies Correct. No IHT is payable when the client dies, whether Option 1 or 2 is chosen. With Option 1, the whole estate is spouse exempt. With Option 2, the gift to D is taxed at 0% and the balance is spouse exempt. The other options are incorrect because: It does make a difference to the NRB available for S. With Option 2, the client uses their own NRB and none will be transferred to S. With Option 1, the client’s NRB is not used and so can be transferred to S. For the family to benefit from an increase in the NRB after the client’s death, the client should avoid using their NRB (i.e. choose Option 1). When S later claims both NRBs, the amount is calculated with reference to the NRB at the time of S’s death. To guarantee that D will inherit, Option 2 (which includes a direct gift to D) should be chosen. If Option 1 is chosen everything falls within S’s control, and S may decide not to benefit D. If S has a smaller estate with only limited assets and will require the use /benefit of your client’s estate to maintain an acceptable standard of living, it may not be sensible to make a significant gift to D.

Answer 120

False Correct. The amount of the NRB might change over time, and the client may use some of their NRB during their lifetime, so you cannot know for certain what the exact amount should be. It is preferable to use a formula clause that refers generically to the nil rate band at the date of death. However, care should be taken to ensure a formula clause is not interpreted to also include any transferred NRB or residence NRB that might be available when the client dies.

Answer 121

The residence NRB could be claimed on the death of the survivor of your client and P Correct. The residence nil rate band could be claimed by the survivor of your client and P; at this point the two estates would be combined into the hands of the survivor and therefore contain the residential property interest, and the whole amount will pass to their children. The other options were incorrect because: If P dies first, their NRB will only be used to the extent they have assets available. Their estate is well below the amount of the NRB. To the extent the NRB is unused it is wasted. No transferrable NRB applies because your client and P are not married. Although your client currently owns the residential interest, if they died first, the property passes to P (as the survivor), not the children and therefore the residence NRB would not be available at this time.

Answer 122

The testator should set up a discretionary trust under the will and name all of his children and grandchildren as beneficiaries. Correct. A discretionary trust seems most suitable. A life interest trust and outright gifts would be possible but less appropriate given the children’s circumstances and that the grandchildren are minors. A discretionary trust offers flexibility for trustees to take individual circumstances into account before distributing money (no beneficiary is entitled to anything) and a discretionary trust may offer protection from claims by creditors or on divorce.

Answer 123

IHT would have been payable when the woman died. However, following the trust distributions a refund of inheritance tax can be claimed. Correct. We know that IHT would have been payable following the woman’s death. Under s.144 IHTA distributions made from a discretionary will trust in the two years following death are treated as transfers made by the deceased under their will. In this case, the woman’s will is therefore treated as giving half of her estate to her civil partner and half to her children –in which case civil partner exemption will be available. A refund of some or all of the IHT paid at the time can be made. The other options were incorrect because: the effect of s.144 was not considered the effect of s.144 applies in the 2 years following death and is not limited to the administration period IHT would have been paid at the time – a discretionary trust is not an exempt beneficiary, and civil partner exemption would not have been available just because the civil partner was one of the beneficiaries

Answer 124

The man should create a life interest will trust naming his spouse as the life tenant and his children as the remainder beneficiaries. Spouse exemption would apply on the man’s death Correct. Setting up a life interest will trust with his spouse as the life tenant and his children as remainder beneficiaries would achieve the clients aims. His spouse would have a guaranteed right to income and the capital of his estate would remain available for his children following her death. Spouse exemption will apply provided his spouse is named as the life tenant so this is a tax efficient structure to use in his will. The other options were incorrect because i) a discretionary trust is not suitable because his wife would have no guaranteed rights to the trust fund and ii) for spouse exemption to apply his spouse needs to be the life tenant not the remainder beneficiary.

Answer 125

Yes, but only if the third party is appropriately authorised and the solicitor has no reason to suspect that the instructions do not reflect their client's wishes. Correct: See CCS 3.1

Answer 126

Obtain the client's consent to approach their medical practitioner for confirmation of capacity and make a record of the findings. The solicitor should only prepare a will if capacity is confirmed. It is advisable for the doctor to act as a witness and record their findings Correct: This reflects the golden rule and best practice

Answer 127

A solicitor is not absolutely prohibited from acting in these circumstances but there is a potential conflict of interest. They should not act where the client is proposing to make a gift of more than £500 to the solicitor unless the client takes independent advice. Correct: Solicitors should not act where there is a conflict or significant risk of conflict. The SRA considers a gift of £500 to be significant.

Answer 128

The testator’s will has not been revoked. However, it will be possible for the testator to revoke it now conditionally upon their son’s subsequent marriage. Correct: By writing “revoked” on his will the testator has not yet effectively revoked it (conditionally or otherwise). However, it would be possible for the testator to take steps now to revoke the will conditional upon his son’s subsequent marriage. The other options were incorrect because: - the will has not yet been revoked (conditionally or otherwise) - it is not necessary to wait until after the marriage

Answer 129

The second will impliedly revokes the first will, but only to the extent they are inconsistent Correct. The clause in the question does not revoke the previous will. Where there are no express words of revocation both wills remain active. The later will revokes the earlier, but only to the extent they are inconsistent. The other options were incorrect because: - the clause included in the second will would not amount to express revocation - it is possible for a later will to revoke an earlier will by implication - the later will revokes the earlier where there are discrepancies (the earlier will does not take priority) the statement relating to conditional revocation is not standard practice.

Answer 130

The testator’s will remains valid. Correct: Revocation by destruction requires physically destruction by the testator and intention to revoke. Although this testator intends to revoke their will revocation is only effective if the original will is destroyed. Here only a copy has been destroyed. The other options were incorrect because: - the original will not a copy needs to be destroyed - there is no requirement to destroy the will in front of a solicitor - the testator’s words do not demonstrate an intention to partially revoke an intention to make a new will is irrelevant. An intention to revoke the existing will is required.

Answer 131

The solicitor may draft the will and accept the gift provided the man first takes independent legal advice. Correct: There is no rule which prohibits a client making a gift by will to his or her solicitor. However, paragraph 6.1 of the Code of Conduct for Solicitors requires a solicitor not to act if there is an own interest conflict or a significant risk of an own interest conflict. If a solicitor drafts a will where the client wishes to make a gift of significant value to the solicitor, a member of their family, or an another employee of the firm, the solicitor should be satisfied that the client has first taken independent legal advice with regard to making the gift. If the client does not agree to take independent advice the solicitor should cease to act on the instructions. This includes situations where the intended gift is of significant value in relation to the size of the client's overall estate, but also where the gift is of significant value in itself. In practice however, most firms will have their own rules which prohibit this.

Answer 132

The residue bears the whole of the inheritance tax and the house will bear the cost of transfer. Correct: In the absence of any alternative express provision in the will the burden of inheritance tax falls upon the residue of the estate and is a testamentary expense. By contrast, costs of transfer of any specific gift will fall upon the beneficiary.

Answer 133

The husband has a vested interest and the children have contingent interests Correct: The husband has a vested interest in the capital. The children both have contingent interests. Whilst the daughter has satisfied the age contingency her interest is still contingent on surviving her father which is not yet satisfied. The son’s interest is contingent on reaching the age of 25 and surviving his father.

Answer 134

John will receive nothing, Althea will receive the 200 BT shares and Hayley will the receive £4,000 from the Building Society Account together with £1,000 from the general estate, provided there are sufficient funds. Correct: The watch is a specific legacy. Under s.24 Wills Act the general rule is that the will speaks from the date of death. However, use of the word ‘my’ indicates a contrary intention to the general rule indicating the man was referring specifically to the watch he owned when he made the will rather than the watch he owned at the date he died. As regards a holding of shares, or a collection of items that is capable of growing, the use of the word ‘my’ does not alter the general position and the gift is construed as the holding or contents of the collection at the date of death. The gift of the money in the building society is a demonstrative legacy. if there are insufficient funds in the designated account these are made up from other assets in the estate in the same way as a general legacy

Answer 135

The daughter’s share will pass to the granddaughter. The gift to the brother will fail and there will be a partial intestacy of his share Correct: S 33 Wills Act 1837 applies so that issue (children, grandchildren, great grandchildren etc) take the share their parent would have taken. The section does not apply to any other beneficiary so not to the brother’s share. This contrasts with the statutory trusts which apply on intestacy (s 47 AEA) where the substitution provision applies to all blood relatives. It is not the case that the sister takes her brother’s share unless it is expressly stated that the gift is to such of the named beneficiaries as survive and if more than one equally. This is not implied.

Answer 136

Mary is not entitled to anything. Michael is entitled to £100. Correct: Applying s 21 Wills Act 1837, unattested alterations made after execution are invalid. This means Michael cannot receive £200 (the new amount is an invalid alteration). However, as the original amount of £100 remains visible so Michael is entitled to this. Although the alteration to Mary’s gift (the obliteration) is also unattested, as the original amount cannot be deciphered by natural means Mary receives nothing and the alteration is effective. The other options were incorrect because: - Mary cannot receive £500 because the amount is not visible through natural means - Michael cannot receive £200 because the alteration has not been attested and is therefore ineffective - Michael is entitled to receive £100 because the original clause hasn’t been amended and the amount is legible

Answer 137

£800, as it is not necessary for the alteration to be attested. Where a blank space has been completed (inserting £800) there is a presumption that the blank was completed before execution. In which case the alteration would be valid under the general rule in s 21 Wills Act 1837. The other options were incorrect because: - There is a presumption the blank space was completed before execution so this does not have to be proved in order for the gift to be valid - Attestation of the alteration is not required where a blank space is completed - The attestation of the will as a whole does not need to refer to the alteration (completing a blank space is deemed to have occurred before execution) Affidavit evidence is not required

Answer 138

£100, under the general rule in s 21 Wills Act 1837. Correct: The general rule in s.21 Wills Act 1837 is that unattested alterations are deemed to have been made after execution and are therefore invalid. In the absence of evidence to the contrary, the alteration is ineffective. The original gift is visible through natural means and so the nephew will inherit this. The other options were incorrect because: - There is a presumption the alteration was made after execution, so no affidavit evidence is required either by witnesses or the person who prepared the will. - The general rule does not confirm the validity of the amendment Crossing a line through a number does not of itself demonstrate intention to revoke

Answer 139

The testator’s third daughter will receive £400 because she was the youngest daughter when the codicil was made. Correct: The codicil re-publishes the will which is interpreted with reference to the date of the codicil. On the date the codicil was executed the testator had three daughters and the youngest of them will receive £400. The other options were incorrect because: - The effective date of execution of the will is the date of the codicil - The codicil republishes the will as a whole not just the clauses it amends There is no reference in the codicil to how the clause should take effect the general legal principles apply

Answer 140

The testator’s son will receive £30,000. The testator’s daughter will receive £50,000, but only if evidence that the amendment was made before the codicil was executed is provided. Correct: The testator’s son witnessed the will. According to s.15 Wills Act 1837 he would not be entitled to the gift. However, the later codicil, which he did not witness, re-executes the will and therefore avoids the effect of s.15. The amendment to the daughter’s gift was made after the will was executed so would be ineffective. However, the later codicil re-executes the will (by which time it includes the amended clause) and so the amendment is confirmed. As the codicil does not expressly confirm the amendment was made before the codicil was signed affidavit evidence to this effect would be required. The other options were incorrect because the: - effect of s.15 is avoided - the codicil was not witnessed by the son and this ‘corrects’ the issue. - testator’s daughter will receive something – either the original amount or the increased amount if the alteration is proven to be effective - date of the codicil is, of itself, insufficient to validate the amendment. Evidence is needed to prove the amendment was made before the codicil was signed as the codicil itself does not expressly refer to the amendment to the will.

Answer 141

Testator 2 and 3 only. A codicil can revive a will that was previously revoked, but not if it has been destroyed. This means Testator 1 could not use a codicil to revive his previous will but Testator 2 could. A codicil can be used to revoke a will in whole or in part. Testator 3 can therefore use a codicil. It does not matter that there are no additional clauses to add.

Answer 142

The will was partially revoked when the testator divorced. The testator’s brother will act as sole executor, the testator’s nephew will inherit £300 and the rest of her estate passes to her children only. Correct: By virtue of s 18A Wills Act 1837 (‘WA’) the will is interpreted as though the testator’s former spouse has pre-deceased her (a partial revocation). This means only the brother can act as executor and the former spouse cannot take a share of her estate; the rest of her assets (after the gift to her nephew is paid) will be shared between her children only. The other options were incorrect because: - Divorce does not fully revoke the will – the gift to the testator’s nephew would be unaffected - S 18A WA prevents the appointment of the former spouse as executor and trustee as well as rendering their beneficial entitlements void - S 18A WA affects all wills/codicils made prior to the divorce

Answer 143

The will was automatically revoked when the testator entered the civil partnership and the testator died intestate. Correct: By virtue of s 18 B Wills Act 1837 (‘WA 1837’) entering into a civil partnership automatically revokes any previous will made by the testator. The express clause in the testator’s will concerns a hypothetic civil partnership and does not identify a named civil partner – it is therefore ineffective. The other options were incorrect because: S 18C WA 1837 does not take effect until a court order confirming dissolution has been issued S 18B WA 1837- entering a civil partnership revokes all previous wills in full, not just the last one

Answer 144

Will 2 will not be revoked by the testator’s marriage, provided it is made expressly in contemplation of the testator’s marriage to F. Correct: By virtue of s 18 Wills Act 1837 marriage automatically revokes any will or codicil made beforehand. This can only be avoided if the will includes an express clause stating it is made in contemplation of the marriage to F and should not be revoked by it. The other options were incorrect because: - Whether or not a will is made in contemplation of marriage, the will is effective on execution unless there is express wording that it should only take effect on the occurrence of particular event - Will 1 is revoked by the marriage. Will 2 can be made before the wedding provided it is made expressly in contemplation of that wedding.