When will a gift fail? Adeem?
SPECIFIC GIFT FAILS IF IT:
• Is no longer part of the estate
• Is subject to binding contract for sale
• No longer meets description in will
Explain statutory trusts
STATUTORY TRUSTS
If class member dies before intestate, their issue takes their parent’s share per stirpes.
How is a gift on which the donor retained benefit treated?
• Treated as part of deceased’s estate for inheritance tax
- Does not pass by will or intestacy
When will someone apply for a grant of probate?
- Valid will names one or more executors who are willing and able to act.
When might a grant of letter of administration with will annexed be used?
Who can apply for the grant?
Valid will but no executor will or able to act.
- Executor
• Trustee of residuary estate
• Residuary beneficiary or. anyone entitled to residue
Court prefers a beneficiary with a vested interest to apply.
When will 2 administrators be required?
- When there’s a life interest
- Where there’s a minor interest
Who can apply for Letters of Administration?
Follows same order as intestacy rules.
- surviving spouse
- children ( step child not included unless adopted by the deceased)
- parents
Is there a right to have power reserved in grants of administration?
NO
What are some ways to pay tax liability?
•Bank may pay HMRC directly
• Loan from bank or beneficiary
• Life assurance policy proceeds
• Sell estate assets which can be sold without a grant.
What further evidence may be needed for a grant?
• Evidence of due execution
• Affidavit confirming deceased’s full name
• Affidavit of knowledge and approval
• Affidavit confirming timing of alterations
• Documents referred to in will
• Affidavit of plight and condition - if pin and staple marks can be seen which may suggest the will has been tampered with.
What is a Caveat?
Prevents the issue of grant of representation.
What is a citation and what are the types of citations?
- Citation to take probate - force an executor to take probate.
- Citation to accept or refuse grant - can be used to clear off a person with a prior right to a grant.
What is a solvent estate?
An estate with sufficient assets to pay all expenses, debts and other liabilities in full. Whether the legacies under the will can be satisfied is irrelevant.
When can a beneficiary disclaim their inheritance?
They can disclaim unless they have accepted any benefit from it. Can be made orally or in writing but should be written to be effective for tax purposes. This will then fall into residue.
If the residue is being disclaimed then there is a partial intestacy.
What does a variation do?
Allows a beneficiary to change who receives their inheritance.
- can be made even if the original beneficiary has accepted a benefit.
-
Rank & abate equally
Where the estate has insufficient funds to pay all legacies in full the legacies abate proportionally.
Eg, the estate only has 60% of money needed, each beneficiary will receive 60% of their legacy
What are the 3 accounts the PR should prepare and what will it show?
- IHT paid
- expenses incurred during administration
- how assets have been distributed
- income received during the administration period.
- Income account
- Capital account
- Distribution account
What does an Assent do?
An assent means that the PRs are acknowledging that they do not require an asset for the purposes of administration and are happy to transfer it to a beneficiary.
- an assent operates to vest the legal estate in that named person.
- it relates back to date of death so beneficiary is entitled to rent and other income from the date of death.
- must be in writing, signed by the PRs and name the person whose favour it is given.
