Wills: Drafting and Interpretation

Question 1

Basic overview of a will

Answer 1

• Commencement
• Revocation
• Burial/Funeral wishes
• Appointment of executors and trustees
• Appointment of guardians
• Specific gifts
• General gifts
• Pecuniary gifts
• Residuary gift
• Administrative clauses
• Date and Attestation

Question 2

Commencement

Answer 2

I JOHN DOE sometimes known as JJ DOE of [address] declare this to be my last will and testament.

Question 3

Revocation

Answer 3

I hereby REVOKE all former wills and testamentary dispositions and declare this to be my last will

Question 4

Burial and Funeral wishes

Answer 4

I WISH to be cremated.

Question 5

Appointment of executors

Answer 5

I APPOINT [x] and [x] (“my Trustees”) jointly to be the executors and trustees of my Will but if either of them shall be unable or unwilling to act I appoint [x] to fill any vacancy thereby arising

• Minimum of one executor is required
• Better to appoint at least two
• It is possible to qualify an executor to certain locations or types of assets

Question 6

Guardians

Answer 6

I APPOINT [x] and [x] jointly to be the guardians of my children who have not attained the age of 18 at the death of the survivor of myself and my civil partner [x]

Question 7

Where do executor and trustee powers come from?

Answer 7

Statute, common law and/or express powers conferred by the Will.

If there is a discrepancy between the Will will override any default powers.

Question 8

Date and Attestation

Answer 8

Date: [ ]

Signed by [ ] in our joint presence and then by us in [his OR her] presence.

Question 9

Can a lay person charge for their time administering the estate?

Answer 9

Only if there are express provisions under the Will.

The statutory power to charge under a Will only applies to professionals.

Question 10

When is ‘legacy’ used?

Answer 10

Legacy describes gifts of chattels or personalty.

Question 11

When is ‘devise’ used?

Answer 11

Used in relation to gifts of real property.

Question 12

What are specific gifts?

Answer 12

They are gifts of a particular item owned by the deceased at the date of death.

MUST be drafted precisely and the subject matter must be clear otherwise the clause may fail for uncertainty.

Question 13

What is adeem?

Answer 13

If the testator does not own the item referred to in the Will, the gift adeems (fails to take effect) and the beneficiary receives nothing.

Careful with use of ‘my’.

Question 14

Use of ‘my’

Answer 14

Must be careful because it is common to replace items over time. The use of ‘my’ makes the gift the item owned at the time the Will was written.

Question 15

Collections

Answer 15

If it is a collection of something then it will be taken as the collection as at the date of death - regardless of the use of the word ‘my’.

If a division is required the Will should specify how the agreement of division should be reached, a time frame and how failure to agree should be resolved.

Describing collections should also be certain.

Question 16

Chattels - what kind of gift?

Answer 16

• Type of specific gift.
• All tangible moveable objects except for money, business assets and investments.
• includes vehicles, modes of transport, and pets.

Question 17

Clauses dealing with real property

Answer 17

• property must be identifiable: full address and registered title number
• Should also expressly state what will happen if that property is no longer owned by the testator when they die.
• gift could be “main residence on the date of my death”
• give tax advice for RNRB
• mortgage - give advice relating to the repayment

Question 18

General Legacies

Answer 18

• a gift of property which is not distinguished from property of a similar type (rather than my)

I GIVE to [ ] a Hasselblad Lunar camera free of tax and costs of transfer

Question 19

Demonstrative Gifts

Answer 19

A type of general legacy (usually £) which the Will directs should be paid out a specified fund.

The gift will NOT fail if there are insufficient assets int he specified fund - the balance or the whole will be paid as a general legacy

• rare

Question 20

Pecuniary Gifts

Answer 20

I GIVE to [ ] the sum of five hundred pounds (£500) free of tax and absolutely

• should contain numbers and words

Question 21

Residuary gift

Answer 21

• Gift of all the property which has not already been disposed of under the will or later codicil
• if not properly drafted there can be partial intestacy

I GIVE all the assets I can dispose of by Will subject to the payment of my debts and funeral and testamentary expenses and all legacies given hereby or by any codicil hereto (‘my Residuary Estate’) unto

Avoid giving separate parts: instead “I give… to such of my three nephews x x and x as survive me and if more than one in equal shares.

Question 22

When should a trust be imposed on a residuary estate?

Answer 22

• a beneficiary is given a lift interest in the residue
• a discretionary trust of the residue is to be set up
• the residue is given to more than one person
• there are contingent or minor interests

In each case the clause should be drafted incorporating the trust to cover a declaration of the trust and the terms of the trust itself.

Question 23

Reduce the risk of the residuary failing

Answer 23

• do not give in shares (eg half to my sister half to my brother), give in equal shares to each who survive
• create express substitution clauses
• use an ultimate gift over clause

Question 24

Date from which the Will speaks

Answer 24

The general rule is that unless contrary intention is shown the Will speaks from the date of the testator’s death in respect of identifying subject matter.

Question 25

Date from which the Will speaks: Property

Answer 25

The use of 'my' make the date of execution of the Will the relevant date. 'My car' would mean the car i own at the date the will was executed This does not apply to collections of items: 'my collection' is taken to mean the contents of the collection at the date of death.

Question 26

Date from which the Will speaks: people

Answer 26

Will is deemed to speak from the date of execution (unless a contrary intention is shown). If given to a class of beneficiaries the testator should state expressly when the beneficiaries will be determined. Otherwise the class closing rules apply and the class closes when the first beneficiary in the first beneficiary obtains a vested interest.

Question 27

Date from which the Will speaks: codicil

Answer 27

The codicil republishes the will so the will speaks from the date the codicil was executed.

Question 28

Relieving provisions: IHT

Answer 28

In the absence of an express provision an individual gift in a will is made free of inheritance tax and IHT is payable out of the residue. Standard to practice for legacies to be drafted expressly as free from tax and for the residuary estate to bear the burden of such tax. Can draft the Will so the gift bears its own inheritance tax.

Question 29

Relieving provisions: cost of transfer

Answer 29

In the absence of any express provisions, specific beneficiaries bear the burden of: - cost of delivery of the property to them - expenses incurred since the date of death in preserving the item or ensuring its upkeep If they want the estate to pay for it the will should be drafted so that the gift is stated to be 'free of' expenses and/or costs of transfer.

Question 30

Relieving provisions: charges

Answer 30

Where property is subject to a secured debt/charge, unless a contrary intention is shown, the asset charged bears liability for payment. Can expressly relieve the property - it then becomes a general debt of the estate to be paid out of the residue.

Question 31

Section 21 Administration of Justice Act 1982

Answer 31

Where the meaning of the will or clause within it is unclear or ambiguous it is possible for the courts to rule on how it should be constructed. The court has the power to determine the effect of a will and the overriding principle is that effect should be given to the testator's intention. Court will determine the meaning of the words within the will and their intention not look behind the will to identify any other 'real intention'.

Question 31

when can extrinsic evidence be submitted under s21 AJA 1982?

Answer 31

- If the Will or any part of it is meaningless - If the language in any part of it is ambiguous on the face of it - If the Will is ambiguous in light of surrounding circumstances. Evidence is NOT used to vary or contradict language in the WIll - only to help with the construction of the Will.

Question 32

What happens if two people die at the same time?

Answer 32

There is a presumption that the eldest died first. For IHT purposes, neither inherits the other and the estates are taxed separately (and will not be taxed under the second estate). Can include express survivorship clauses.

Question 33

Things to consider when including gifts for issue?

Answer 33

Does the testator want to make a gift to an individual or make a class gift? Is the gift vested or contingent? What does the testator want to happen is a beneficiary pre-deceases?

Question 34

What if you want to give a gift to children who haven't been born yet?

Answer 34

you can give the gift to 'children' as a class without naming them and then they are included

Question 35

Class closing rules

Answer 35

A class closes when any one member of the class becomes entitled in possession. If no contingency applies and at least one person who can vest, the class will close on the date of death.

Question 36

Is vesting related to age?

Answer 36

No - where a vested gift is made to a minor the gift is held on trust until the child reaches 18 (because a minor cannot give good receipt.

Question 37

What is a contingent interest?

Answer 37

This is where the beneficiary has to satisfy a condition before they inherit.

Question 38

s 33 Wills Act

Answer 38

If there is no express substitution clause, s33 WA 1837 will apply so that the gift does not lapse but passes onto beneficiaries issue. This only applies where the beneficiary is issue. Does not apply to any other beneficiaries (e.g. sibling)

Question 39

Leaving a gift to institutions or clubs

Answer 39

- Organisation should exist and a full name and address should be used to avoid doubt over the identity of the intended beneficiary - check if they have charity status - express provision should be made for organisation changing its name or amalgamating - provision should be made for who can give valid receipt.

Question 40

How do you incorporate unexecuted documents into a Will?

Answer 40

It can be incorporated by referring to it in the Will. (e.g. i leave my collection of x to a list of people which can be found in my safe). Must satisfy the following criteria: - Document must exist when the will is executed (or when codicil is executed) - Will must refer to the document as being in existence at the time of the execution - Document must be clearly identified in the Will