Legacies

Question 1

General legacies

Answer 1

What is considered general legacy

Legacy to executor
legacy conditional on executor taking office is a general legacy, case law Duncan v Watts (1852)

Annuity

classifed as general legacy for abatement purpose, per section 55(1)(ix) of the Administration of Estates Act 1925.

the annuitant was entitled to be paid the actuarial value of the annuity, case law Re Farmer [1939]

Specific sources of funds no longer exist

demonstrative legacy becomes a general legacy if it no longer exists.

Case law: Ashburner v MacGuire (1786)

Question 2

Demonstrative legacies

Answer 2

Abatement of demonstrative legacies

E.g., “£5,000 from my HSBC account.”

If the account has enough funds, it’s treated like a specific legacy and doesn’t abate until later.

If the account is short, the unpaid balance is treated like a general legacy and abates here.

Question 3

Specific legacies

Question 4

Residue

Question 5

Abatement

Answer 5

**Legislation **

Schedule 1 (Part II) of the Administration of Estates Act 1925

Will defined abatment order

the statutory rules of abatement (the order in which gifts in a will are reduced if the estate is insufficient to cover debts, liabilities, legacies, and expenses) can be displaced by the express intention of the testator as contained in the will.

Here’s how it works:

Default abatement order (if the will is silent):

Under English law, the general order of abatement is:

• Residuary estate (what’s left after specific and pecuniary legacies)
• General legacies (e.g., fixed sums of money not linked to any particular asset)
• Demonstrative legacies (gifts from a specific source, e.g., £5,000 from a particular bank account – abates like a general legacy if the source is insufficient)
• Specific and pecuniary legacies (a specific item or fund, e.g., “my Rolex watch” or “100 shares in X Ltd”)

Within each category, abatement is usually rateable (pro rata among beneficiaries).

When intention in a will can change this:

• A testator may state in the will that certain gifts are to be protected from abatement (e.g., “I direct that my gift of the family home to my daughter shall not abate until all other legacies are exhausted”).
• Alternatively, the will may specify an order of priority different from the statutory order.
• The court’s job is to give effect to the testator’s expressed or necessarily implied intention.

So:

Express words in the will (e.g., “free of duties” or “shall take precedence”) are the strongest.

Implied intention may also be recognised if the wording or structure of the will suggests that certain gifts were meant to be preserved.

In summary:

The abatement order in the UK can be altered by the intention expressed in the will. The statutory order is only a default that applies when the will is silent.

Question 6

Ademption

Question 7

Default

Question 8

Order of abatement

Answer 8

Residue

This is mandated by the Administration of Estates Act 1925, Schedule 1 (Part II), which states that property undisposed of by the will abates first.

General legacies