Wills & Trusts

Question 1

W and Ts: Can I, as executor, give myself a ring worth $8000 instead of the cash gift outlined in the will?

Answer 1

No, but I can give myself a cash-equivalent (like stocks), assuming noone has a better right to those stocks.

Question 2

W and Ts: Does writing on the will like “X” or “NO LONGER VALID” sufficiently revoke a will?

Answer 2

No. Needs to be destroyed.

Question 3

W and Ts: When looking at wills, what should the first step be:

Answer 3

“1. did the will maker have capacity?
2. did the will maker intend to make a will?
3. was will properly executed?”

Question 4

W and Ts: Testator had capacity and instructed their lawyer to draft a will but then became disabled shortly after. At the time they signed the will, the lawyer asked “do you know that you’re signing a will?” Testator said yes. Valid will?

Answer 4

Probably

Question 5

W and Ts: Formalities for a will

Answer 5

“1. in writing
2. signed by testator or someone directed by testator
3. in the presence of two or more witnesses
4. who also sign the will in the presence of the testator (but not ness. to each other)”

Question 6

W and Ts: What if I say “I, Elizabeth, do hereby bequeth my piano to X.” Is that a will?

Answer 6

Could be. That could count as a signature.

Question 7

W and Ts: What is the threshold for a witness?

Answer 7

Anyone who can see that the testator is signing something. No need for witness to actually read contents or know that the signature is for a will.

Question 8

W and Ts: “I leave $10 to the people I write in my notebook from 2019”… is this valid?

Answer 8

Only if the notebook from 2019 already exists. For example, “I leave $10 to the people that I will write in my notebook.”

Question 9

“W and Ts: A dies intestate and her husband died in the same car accident.
1. Can husband inherit her estate?
2. What if he’s on life support and doesn’t die until 28 days after A?
3. What if A and husband had kids?”

Answer 9

“1. No, spouse must survive at least 28 days longer.
2. Yes. He gets entire estate if they don’t have kids
3. Husband gets $270,000, the personal chattels and 1/2 of the residue. Note that he doesn’t get the family home.”

Question 10

“W and Ts: A dies with a will leaving $100 each to her son, stepson and nephew. The son, stepson and the nephew each have kids and they all die before A.
1. Do the son’s kids inherit the $100?
2. Do the stepson’s kids inherit the $100?
3. Do the cousin’s kids inherit the $100?”

Answer 10

“1. yes
2. no, because the stepson is not a child of the testator for this exception
3. no, because the nephew is not a child of the testator.”

Question 11

W and Ts: “I leave my car to my son.” Which car am I talking about?

Answer 11

Generally gifts are determined at death, but there’s an exception for “my car” so that “my car” is the car at the time of the will

Question 12

W and Ts: A dies without ever knowing her father, can the dad show up out of the blue and claim her estate?

Answer 12

No, law assumes that dad died before A.

Question 13

W and Ts: I was named as executor, but I don’t want the job, how do I renounce?

Answer 13

“1. file renunciation at the probate registry
2. renunciation must be in writing, signed by person renunciating and a witness and state that the person renunciating has not intermeddled in the estate

Note person renunciating can’t change mind and can’t have “intermeddled”

Question 14

W and Ts: Normally PRs need to be granted probate/admin to sell assets but what can they sell without those?

Answer 14

Chattels such as furniture, jewelry, clothing and cars can be sold without the PRs proving that they are entitled to sell such items. They only need a death certificate.

Question 15

W and Ts: Order of entitlement for Letters of Administration with Will Annexed

Answer 15

“1. trustee of residuary estate
2. beneficiary of residuary (vested > contingent)
3. PRs of any beneficiary of residuary except a life tenant of the residue
4. any other beneficiary or creditor
5. PRs of any other beneficiary or creditor, except a life tenant”

Question 16

W and Ts: How many administrators must be appointed for Letter of Administration with Will Annexed?

Answer 16

1, except if a beneficiary is a minor or there’s a life interest, then two.

Question 17

W and Ts: What is “clearing off” and who has to do it?

Answer 17

“You “clear off” people with better entitlement to become an administrator. Applicable in application for Letter of Administration with Will Annexed or Letter of Administration.

Note that you can “clear off” people by an order from the Probate Registry or with a citation, either a citation to take probate (if the executor has intermeddled) or citation to accept or refuse grant”

Question 18

W and Ts: Order of entitlement for Letters of Administration (not with Will Annexed)

Answer 18

Same as intestacy. Note that PRs of the beneficiaries have the same rights as the actual beneficiary, except for PRs of spouses unless the deceased had no kids.

Question 19

W and Ts: Grant of de bonis non

Answer 19

“court doc that appoints a new personal representative or administrator to handle the remaining assets and settle the affairs of a deceased person’s estate. This grant is necessary when the originally appointed personal representative is unable or unwilling to complete the administration of the estate, typically due to resignation, incapacity, or death. The grant of de bonis non allows a successor personal representative to step in and continue the administration process, ensuring that the remaining assets are properly distributed to the beneficiaries or heirs of the estate.

Note that intestate death would break the chain of representation.”

Question 20

W and Ts: Why would I lodge a caveat and how is this different from a citation?

Answer 20

“A caveat filed with the Probate Registry lasts up to 6 months and prevents the issue of a grant of rep. You might file a caveat if you are a beneficiary and you want to say that the will is invalid or the executor named in the will lacks mental capacity.

Citation forces the named executor in a will or a person with better entitlement to administer to apply to take probate or adminster.”

Question 21

W and Ts: Can I, as executor, give a beneficiary a ring worth $10,000 instead of cash?

Answer 21

Yes, provided the beneficiary consents and the value of the ring is not more than the cash entitlement (determined at the time of the transfer, not death)

Question 22

W and Ts: Can PR reimburse themselves for expenses?

Answer 22

Yes

Question 23

W and Ts: Can PR run the deceased business?

Answer 23

No unless they’re doing it so that they can eventually sell it and the will allows it.

Question 24

W and Ts: PRs can generally be sued by any unpaid beneficiaries or creditors, how can they protect themselves?

Answer 24

“1. By placing ad in London Gazette plus other newspapers telling people to contact them within at least 2 months
2. By making payment to the court
3. By having beneficiaries indemnify the PRs
4. By getting a Benjamin Order (ct order)
5. Purchasing insurance
6. Waiting 6 months from being appointed to distribute estate in order to wait and see if any Inheritance Act 1975 claims come up”

Question 25

W and Ts: Order for payment of debts for insolvent estates

Answer 25

"1. reasonable funeral and admin expenses 2. wages and salaries of deceased's employees (but only up to $800 each) 3. ordinary debts - money owed to HMRC and other debts 4. interest on debts 5. deferred debts - debts from spouse"

Question 26

W and Ts: I was promised $100 in the will, but the PRs used the cash in the estate to pay down debts, can I ask the PRs to give me $100 from the residuary?

Answer 26

Yes, that's called marshalling. Doesn't apply when the will specifically said that the cash money can be used to pay down debts.

Question 27

W and Ts: How beneficiary can vary a gift (as opposed to disclaim a gift)?

Answer 27

"1. in writing 2. within 2 years of death and 3. not made for monetary consideration Can be partial or whole variation. Beneficiary still owes tax on the gift."

Question 28

W and Ts: Formal requirement for transferring land to a beneficiary

Answer 28

"You need an assent (even if the PR and beneficiary are the same person), which must be: 1. in writing 2. signed by the PR and 3. name the beneficiary. 4. Transfer must also be registered either by the PR or by the beneficiary"

Question 29

W and Ts: Time limit for claims under Inheritance Act 1975

Answer 29

6 months from appointment of PR (although ct has discretion to allow for a later claim)

Question 30

W and Ts: Who can apply for claims under Inheritance Act 1975

Answer 30

"1. surviving spouse 2. former spouse if not remarried (but not if it's a clean break divorce) 3. child or a person treated as a child (like a stepchild) 4. person who was being maintained (think caring for a sickly aunt or a mistress) 5. person living with the deceased for the entire 2 years before death as if they were the spouse or partner" Note that the deceased must have been domiciled in E&W at the time of their death.

Question 31

W and Ts: How much will be given if the claim under Inheritance Act 1975 is successful?

Answer 31

"If a spouse, then what is reasonable in all the circumstances (i.e., if the deceased is super rich, then the spouse could get more than just what is required to live decently) If anyone else, then just what is required to live comfortable "

Question 32

W and Ts: What to look for in a trust question

Answer 32

"1. intent to create the trust now 2. who are the beneficiaries 3. what is subject to the trust (confirmed future interest is ok though) 4. ascertainable human beneficiaries (except for charitable trusts) 5. trust vests within 125 years after the life of any person living (rule of perpetuities) 6. trust period is within 21 years or 21 years of a life in being (inalienability rule) (except for charitable trusts) 7. were the goods actually transferred to the trustee (if intervivos trust)"

Question 33

W and Ts: What happens if any of the three certainties for a valid trust fails

Answer 33

"1. unclear intent to create a trust = it's a gift, beneficiary can keep 2. unclear who the beneficiaries are = resulting trust in favor of the settlor or settlor's estate 3. unclear what property belongs to the trust = ownership of property goes back to settlor's estate"

Question 34

W and Ts: Given postulant test

Answer 34

"Is it sufficiently clear that a particular person qualifies as a member of the class in a discretionary trust? For ex: ""the employees and ex-employees of the Cypress branch of McDonald's"" "

Question 35

W and Ts: Oral declaration of trust is ok, except in what instance

Answer 35

Transfers of land must be in writing and a transfer deed must be signed and filed at the land registery.

Question 36

W and Ts: Typically for inter vivos trusts, goods must be transferred to the trustee, but what are the exceptions to this rule:

Answer 36

"1. if settlor did ""every effort"" 2. if settlor thought they were going to die and then transferred property with the intent of getting it back if they didn't die, then trust is still formed. 3. if trustee becomes executor of estate unless will states that the goods specifically go to someone else, then the will trumps 4. promissory estoppel (reasonable reliance on the promise) 5. unconscionability "

Question 37

"W and Ts: Secret trust vs half-secret trust: 1. when beneficiary must be disclosed 2. additional requirements"

Answer 37

"Secret trust: 1. beneficiary disclosed at any time before death 2. trustee must not disagree to be trustee Half-Secret trust: 1. beneficiary disclosed at or before the will formation 2. will must match communication to trustee "

Question 38

W and Ts: Saunders v Vautier

Answer 38

Beneficiaries who have absolute (non-contingent) interests, are above 18, and of sound mind (sui juris) can all agree to terminate the trust and claim the gifts. This applies to life interests too so long as the remainderman agrees too.

Question 39

"W and Ts: Are the following charitable purposes for a charitable trust? 1. for health services for the employees of Walmart 2. for my family that in poverty 3. for animal welfare organizations that are campaining to ban animal testing 4. for the democratic party 5. for this private school that costs $35,000 a year"

Answer 39

No

Question 40

"W and Ts: There are 4 trustees for a trust to benefit a minor, the trustees are super busy and want to do the following, can they do that? 1. add another trustee 2. kick out one of the trustees 3. quit"

Answer 40

"1. no b/c maximum # of trustees is 4 if you're trying to add more trustees (note that the settlor can appoint an unlimited number of trustees initially though… except for trusts of land) 2. yes with unanimous consent (if that trustee dies, refuses to act, is outside the UK for more than 12 consecutive months, is unfit/incapable of acting, desires to quit) 3. yea with unanimous consent so long as there are two trustees or a trust corporation in place or alternatively by being replaced."

Question 41

W and Ts: When can a trustee charge for their services

Answer 41

"If: 1. it's a trust corporation; 2. beneficiaries of full age and capacity consent; 3. court authorizes payment; or 4. it's a professional trustee that is not the sole trustee, the other trustees give their written consent, and there is no express provision in the trust instrument relating to the trustee's charges"

Question 42

W and Ts: Trustee cannot generally purchase trust property even for above market value, but what's the exception?

Answer 42

"1. ct permits it 2. trustee purchases beneficial interest from a beneficiary so long as trustee discloses all info to the beneficiary"

Question 43

W and Ts: There are 3 trustees, and one trustee wants to sell trust land to a bonafide buyer, can he do that without any other consent?

Answer 43

No, first of all, sale of land requires 2 trustees to agree so that they can overreach any beneficial interest. Secondly, trustees must act unanimously.

Question 44

W and Ts: Can a trustee buy land in the US (or anywhere outside of the UK)?

Answer 44

No.

Question 45

W and Ts: What two powers do beneficiaries have, so long as all beneficiaries agree, have absolute entitlements, are over 18 and are of sound mind?

Answer 45

"1. force trustees to quit and appoint new trustees 2. bring the trust to an end"

Question 46

"W and Ts: Limitation period to bring claim against trustee for: 1. fraud 2. action to recover trust property"

Answer 46

"1. No limitation period. 2. Otherwise, it's 6 years. For remaindermen, clock starts once the life tenant dies."

Question 47

W and Ts: What does it mean for a person to have capacity to make a will?

Answer 47

1. they understood that they were making a will, 2. how much they own and what they will be passing down in the will, 3. the claims to which they ought to give effect (aka, they have a generally understanding of who they should give gifts to (like spouses and kids))

Question 48

W and Ts: What assets are specifically excluded from the succession estate?

Answer 48

1. property held as joint tenants 2. life insurance pay-outs 3. pension benefits 4. donatio mortis causa (basically gifts transferred thinking that they were going to die) 5. trusts

Question 49

W and Ts: What is a statutory trust and how does it apply to anything?

Answer 49

A statutory trust applies to intestacy. Basically, everyone except spouses or kids without parents, hold their intestate interests under statutory trusts. This means that the issue of the person in the class can inherit (once they're 18+ or married). For ex: A dies intestate with no wife or kids. A has 3 sisters, B, C, D. D died before A, leaving 2 kids: E and F. This means that B and C each get 1/3 of A's estate and E and F each get 1/6th of A's estate.

Question 50

W and Ts: A dies intestate. The title to the family home is in A's name only. Can A's spouse still inherit the family home?

Answer 50

Only if: 1. A's spouse lived 28 days longer than A (otherwise, spouse gets nothing) 2. The home was not a joint tenancy (otherwise, survivorship applies) 3. A's spouse exercises the right within 12 months of the grant of rep 4. A's spouse pays the difference between their entitlement and the value of the house

Question 51

W and Ts: What is s9 WA?

Answer 51

The rule that requires wills to be formally witnessed and signed.

Question 52

W and Ts: Who proves that the testator of a will had capacity?

Answer 52

If there is any doubt as to the capacity of the testator, the PR must prove otherwise

Question 53

W and Ts: Generally there is a presumption that if a testator had capacity, they have intention to make a will. What is the test if there is evidence that the testator lacked intention (such that the presumption no longer applies)?

Answer 53

The testator must have both general intention and specific intention. General intention = intent to make a will generally Specific intention = intent to make that will specifically

Question 54

W and Ts: What is the pencil rule?

Answer 54

Rebuttable presumption that a will written in pencil (even if correctly executed) is assumed to be a draft.

Question 55

W and Ts: Difference between duress and undue influence

Answer 55

Duress is more serious. Undue influence is based on a special relationship based on trust and confidence that is abused or exploited.

Question 56

W and Ts: How should solicitor ensure that wills are not entered into through duress or undue influence?

Answer 56

Ensure client receives impartial legal advice and make sure they see and receive clear instructions from the testator on their own

Question 57

W and Ts: What is the effect of an "attestation clause" stating that the will was signed by the testator in the presence of two witnesses?

Answer 57

It creates a rebuttable presumption that the will was validly executed.

Question 58

W and Ts: What happens if a beneficiary or their spouse is supposed to inherit under the will and is a witness to the will?

Answer 58

That gift fails unless there are two other witnesses or a validly executed codicil confirming the will.

Question 59

W and Ts: Will was executed on 1/1/2023 and a codicil was executed on 2/2/2023, what is the effective date of the will for purposes of determining beneficiaries and gifts?

Answer 59

2/2/2023, the effective date of the codicil.

Question 60

W and Ts: What formality does a will NEED if the testator is blind or illiterate?

Answer 60

A special attestation clause to evidence that the will was read to them, they understood and approved its contents and they then signed or it was signed by another in the testator's presence and at his direction.

Question 61

W and Ts: Will is found with alterations, are the alterations presumed to be valid or invalid?

Answer 61

If the alterations are not formally executed like a will, then there is a rebuttable presumption that the alterations were made after the will was executed and is invalid.

Question 62

W and Ts: Rules for alterations to a will

Answer 62

1. any alteration made BEFORE a will is executed is valid (even if unattested), as long as it is made with the knowledge and approval of the testator 2. any alteration made AFTER a will is executed is invalid unless its formally executed like a will

Question 63

W and Ts: What are the three types of gifts?

Answer 63

1. specific gift - particular piece of property, like a car 2. pecuniary gift - general gift like ("all of my possessions" or "$1000") 3. residuary gift

Question 64

W and Ts: What does ademption mean?

Answer 64

When a specific gift no longer exists, it's said to have adeemed.

Question 65

W and Ts: What is the Non-contentious Probate Rules Rule 20?

Answer 65

Rules for Letters of Administration with Will Annexed

Question 66

W and Ts: What is the Non-contentious Probate Rules Rule 22?

Answer 66

Rules for Letters of Administration

Question 67

W and Ts: What is the maximum number of PRs that can take probate?

Answer 67

4

Question 68

W and Ts: What happens if the executor named in the will is under 18?

Answer 68

A beneficiary of the residuary will be the administrator until the minor turns 18.

Question 69

W and Ts: Typically you need to pay inheritance tax before you can get grant of representation, but excepted estates don't need to pay inheritance tax. What is an excepted estate?

Answer 69

Estates with: 1. a gross value of <$325,000 or 2. a gross value between $325,000 and $3M, but after exemptions fall below $325,000 (or $650,000 if claiming the nil rate band of a spouse as well).

Question 70

W and Ts: What happens if the PR doesn't pay inheritance tax? And when does that penalty start?

Answer 70

Interest gets added to the tax Starts after 6 months from the end of the month of death

Question 71

W and Ts: What forms must the PRs fill out for the inheritance tax and when are they due?

Answer 71

Within 12 months of the end of the month of the death, the PRs must send to HMRC: 1. IHT 400 form 2. IHT 421 forms 3. a check to pay the IHT

Question 72

W and Ts: What should PR send to Probate Registry in order to get grant of rep?

Answer 72

1. original will and codicils (or application for an order that a substitute will be admitted) 2. two copies of sworn witness statement from the PRs stating that the person is dead, value of the estate, etc. 3. statement of truth verifying the witness statement and that they are the correct people to apply for the grant, signed by PR 4. IHT form 421 returned from HMRC 5. probate court fee

Question 73

W and Ts: Timing after death for the issue of grant of rep from the Probate Registry

Answer 73

for probate and letters of admin with will annexed: no less than 7 days after death for letters of admin: no less than 14 days after death

Question 74

W and Ts: What can the PRs do since they need to pay inheritance tax before being granted representation?

Answer 74

1. have bank make payment directly to HMRC (HMRC can request this from the banks) 2. borrow money from a beneficiary 3. take out a bank loan

Question 75

W and Ts: Generally, PRs must pay income tax and CGT, but what are the exceptions?

Answer 75

Income tax - no tax if income earned is less than $100 and is only interest from savings accounts CGT - no tax due if just transferring the asset to a beneficiary

Question 76

W and Ts: What are the three estate accounts that PRs should always maintain?

Answer 76

1. Income account - income received during admin 2. Capital account - assets at death and what happened to them (sold or given to beneficiary) 3. Distribution Account - shows what the residuary could receive

Question 77

W and Ts: What is a bare trust?

Answer 77

It's a trust that has been collapsed pursuant to the Saunders v Vautier rights.

Question 78

W and Ts: What formalities are necessary for a trust in land?

Answer 78

Trusts in land must comply with s53(1)(b) of the Law of Property Act 1925: 1. must be in writing 2. signed by settlor

Question 79

W and Ts: When can trustees remove a fellow trustee?

Answer 79

With unanimous consent of all remaining trustees if the removed trustee: 1. wishes to resign 2. has died 3. is outside the UK for more than 12 months 4. is a minor 5. is unfit or incapable of being a trustee 6. refuses to continue being a trustee

Question 80

W and Ts: Can beneficiaries remove just one trustee (instead of all?)

Answer 80

Yes, provided that the Saunders v Vautier rule is satisfied (they have absolute entitlement, capable, unanimous consent and over 18)

Question 81

W and Ts: Duties of trustees

Answer 81

1. act unanimously 2. act impartiality to beneficiaries 3. to invest 4. to keep accounts and records 5. to distribute trust funds to the right persons 6. not to delegate (except as allowed) 7. keep trust assets separate 8. be adequately informed 9. fiduciary duties

Question 82

W and Ts: What is the Standard Investment Criteria?

Answer 82

1. Is it a good investment having regard to all the other investments? 2. is the whole investment portfolio diverse?

Question 83

W and Ts: Does trustee have to follow the advice of the stockbroker to invest in certain stocks?

Answer 83

No, but they must CONSIDER it.

Question 84

W and Ts: Can trustee invest only in, for example, stocks of companies run by liberals?

Answer 84

Yes but ONLY IF it will not compromise the return on investments

Question 85

W and Ts: MUST a trustee use the income under a trust fund for a minor's maintenance

Answer 85

No, power of maintenance is discretionary

Question 86

W and Ts: Power of maintenance of minors, what may trustee do and what must a trustee do?

Answer 86

While beneficiary is under 18, trustee MUST accumulate income and MAY use income for minor's education, maintenance or other benefit. Once beneficiary turns 18, if beneficiary is fully vested, trustee MUST pay out the accumulated income and any new income to beneficiary. Once beneficiary turns 18, if beneficiary is not fully vested, trustee MUST pay out the new income to beneficiary and transfer the accumulated income into the capital to be paid out once beneficiary is fully vested.

Question 87

W and Ts: What are the 4 defenses to a breach of trust?

Answer 87

1. beneficiaries all consented/forgave the trustee 2. ct forgives trustee b/c trusted acted honestly and with integrity 3. trust deed itself exempts the trustee from liability 4. statute of limitations has run out

Question 88

W and Ts: What is a Quistclose trust?

Answer 88

If a lender lends money to a borrower for a specific purpose that the lender makes explicitly clear, then the borrower holds the money on trust for the lender until it's used for the purpose. For ex: Barclays lends money to A to buy a car. Until A goes and buys a car with all of that money, A holds the money on trust for Barclays. So if A goes bankrupt before buying that car, Barclays can just go get the money back as it was held on trust, instead of having to be a regular unsecured creditor.

Question 89

W and Ts: Rules for a charitable trust

Answer 89

1. must be for a charitable purpose 2. for the public benefit 3. that is exclusively charitable