1
Q
What must a testator understand to have capacity when making a will?
A
The nature of the act, extent of assets, and claims they ought to consider
This includes understanding who might reasonably expect to benefit.
2
Q
What is the presumption regarding a testator’s capacity?
A
There is a presumption of capacity unless challenged
If capacity is challenged, the burden shifts to prove capacity.
3
Q
What is the ‘Golden Rule’ in relation to testamentary capacity?
A
If capacity is borderline, the will should be witnessed or approved by a doctor
This strengthens evidence in case the will is later challenged.
4
Q
What are the three certainties required for a valid inter vivos express trust?
A
- Certainty of intention
- Certainty of subject matter
- Certainty of objects
The settlor must have capacity to create the trust.
5
Q
What formalities must be followed for a trust involving land?
A
The trust must be in writing and signed
This is under s53(1)(b) of the Law of Property Act 1925.
6
Q
What is Donatio Mortis Causa (DMC)?
A
A deathbed gift made in contemplation of death
It requires delivery of dominion and is conditional on death.
7
Q
What effect does marriage have on a will according to the Wills Act 1837?
A
Marriage automatically revokes a will unless made in contemplation of marriage
The will must clearly name the spouse.
8
Q
What happens to a will upon divorce?
A
It does not revoke the whole will but revokes gifts to the former spouse
The former spouse is treated as if they pre-deceased the testator.
9
Q
What is the definition of mutual wills?
A
Wills made based on a binding agreement not to revoke without the other’s consent. When one of them dies, the constructive trust ensures the surviving testator holds property in line with the agreement.
Revocation of one creates a constructive trust on the property, so the survivor can’t use the new will to defeat the agreement. There must be clear evidence of a binding agreement - it can’t just be similar.
10
Q
What are the requirements for a valid codicil?
A
The same rules of capacity, intention, and formalities apply as for a will
A codicil republishes a will, applying the execution date to the original will.
11
Q
What is a specific legacy?
A
A particular gift that can fail if it no longer exists or is not part of the estate
It also fails if subject to a binding contract for sale.
12
Q
What are the intestacy rules regarding a surviving spouse with children?
A
£322,000 statutory legacy, chattels, and 50% residue to spouse
The remaining 50% residue goes to the children.
13
Q
What is the nil rate band (NRB) for inheritance tax?
A
£325,000
This is the threshold above which inheritance tax is charged.
14
Q
What are Potentially Exempt Transfers (PETs)?
A
Gifts by an individual that become exempt if the donor survives 7 years
If the donor dies within 7 years, the PET becomes chargeable.
15
Q
What is the tax treatment for Lifetime Chargeable Transfers (LCTs)?
A
Chargeable immediately at 20% if over NRB
If the donor dies within 7 years, it’s re-calculated at 40%.
16
Q
What is the spousal exemption regarding inheritance tax?
A
Unlimited transfers if legally married
If the spouse is not UK-domiciled, there is a cap of £325,000.
17
Q
What is the small gifts allowance?
A
£250 per person per year for an unlimited number of people
This cannot be used in conjunction with the annual exemption for the same gift.
18
Q
What is the requirement for normal expenditure out of income to be exempt?
A
Gifts must come from income, form part of a normal pattern (i.e. not a one off, so regular payments) , and not affect standard of living
Examples include regular monthly payments.
19
Q
What is the monetary gift limit from one party of the marriage to the other for inheritance tax purposes?
A
£2,500
20
Q
What monetary gift limit is allowed from a grand/great-grandparent for marriage?
A
£2,500
21
Q
What is the marriage gift limit from any other person for inheritance tax purposes?
A
£1,000
22
Q
Do the gift limits apply per marriage or per person?
A
Per marriage
23
Q
Can the marriage gift limits be used in conjunction with AE for the same gift?
A
Yes
24
Q
What are the conditions under which normal expenditure out of income gifts will be exempt?
A
- They come out of donor’s income (not capital)
- They form part of a normal/regular pattern of giving
- They do not affect donor’s standard of living
25
Provide an example of a gift that would be exempt under normal expenditure out of income.
Grandfather pays £200/month into his granddaughter’s savings account from his pension income.
26
What qualifies an asset for Business Property Relief (BPR)?
* Unquoted shares (100% BPR)
* Quoted shares owning more than 50% of company (50% BPR)
* Business or interest in a business (100% BPR)
* Assets used for business purposes (50% BPR)
27
What is the holding period requirement for a qualifying asset under BPR?
Continuous period of 2 years
28
What types of property qualify for Agricultural Property Relief (APR)?
* Agricultural land and buildings used for agricultural activity
* Farmhouses and cottages occupied for agricultural purposes
29
What is the minimum ownership period for qualifying property under APR?
▪ 2 years when used for agricultural purposes by transferor
▪ 7 years owned by transferor and used for agricultural purposes by transferor or another
30
What is the rate of relief for APR if the transferor was the owner-occupier for two years?
100%
31
What is a Grant of Probate?
Issued where there is a valid will and executors are appointed and willing to act.
32
Who is entitled to apply for a Grant of Probate?
* Executor named in will (if alive and willing)
* Trustee of residual estate
* Anyone entitled to residual estate
33
What type of grant is issued where there is no will?
Letters of administration
34
What is the maximum number of administrators allowed in letters of administration?
4
35
What is a Grant de bonis non?
Needed where the last PR dies without completing administration or where a previous grant has been revoked.
36
What must be included in documentation to apply for a grant?
* Original will plus two copies
* Official copy of death certificate
* Tax form or IHT400
* Payment for probate fees
37
What is the duty of Personal Representatives (PRs)?
Collect and safeguard estate assets, pay debts/taxes, and distribute to beneficiaries.
38
What is the standard of care required from PRs?
Act with reasonable care and skill as an 'ordinary prudent businessperson'.
39
What power allows PRs to sell property and collect debts owed to the deceased?
Power to realise assets
40
What protection do PRs have against unknown creditors?
PRS have a duty to give notice to beneficiaries and creditors
▪ PRs place adverts in London Gazette, newspapers local to where deceased owned land and trade publications if relevant
▪ Creditors and beneficiaries must have at least 2 months to respond from date of advert
▪ If no claims are received, PR may distribute the estate free of liability for unknown debts
They can:
▪ Take out missing beneficiary insurance against later claim
▪ Apply to court for Benjamin Order (obtain leave to distribute estate based on assumption of court that the beneficiary is dead)
▪ PRs should wait at least 6 months before distributing the estate to allow for claims under Inheritance (Provision for Family and Dependants) Act 1975.
41
What are the rights of beneficiaries regarding the administration of the estate?
Beneficiaries have a right to ensure estate is administered properly.
42
What is the time limit for family/dependants to make a claim against the estate?
6 months from issue of grant of representation.
43
Who can claim under the Inheritance (Provision for Family and Dependants) Act?
* Spouses/CPs of the deceased
* Former spouse/CP of the deceased
* Cohabitants
* Children of the deceased
* Dependants
Under section 1(1A) of the IPFDA, a cohabitant can claim if, immediately before the death of the deceased, they were:
“... living in the same household as the deceased as the husband or wife (or civil partner) of the deceased for a continuous period of at least two years.”
44
How would a beneficiary change who receives their gift under a will?
Beneficiary can change who receives their gift through variation of will, even if beneficiary has accepted a benefit
Must be done within 2 years of death, in writing, as if testator left gift to the person in the will – so no IHT charge arises, avoids 7 year rule
Expressed as if the deceased had made the gift themselves.
45
What is a chargeable lifetime transfer (CLT) for IHT purposes?
A transfer of value made during the transferor's lifetime that may attract IHT.
46
What duties do trustees have regarding trust funds?
Duty to invest and grow capital and produce income.
47
What is the difference between maintenance and advancement under the Trustee Act 1925?
* Maintenance deals with income for minors
* Advancement deals with capital
o Power to maintain minor - income can be used for the child’s education, maintenance, benefit until they reach 18.
o Power to advance capital - advance part of capital (up to full presumptive share) for benefit of beneficiary during their lifetime.
48
What documentation is needed to apply for a Grant of Probate?
* Original will plus two copies
* Official copy of death certificate
* Tax form or IHT400
* Payment for probate fees
49
What is the standard for a court when considering claims from a former spouse?
Reasonable maintenance according to their situation.
Required for maintenance, such that they can live decently and comfortably according to their situation
50
What is the role of the executor in a will?
To administer the estate according to the deceased's wishes.
51
What must PRs do to protect against missing beneficiaries?
* Take out missing beneficiary insurance
* Apply for a Benjamin Order
52
What property passes outside the estate?
Jointly owned property, life insurance, pension death benefits, life interest in trust, gifts where donor retained benefit
## Footnote
Tax consequences apply to certain gifts
If property passes outside the estate, it means that the executor has no authority or responsibility over it. It passes automatically to the person entitled — for example, to a joint owner under a joint tenancy, or to a named beneficiary under a life insurance policy or pension scheme.
53
Does equity assist a volunteer, i.e does equity step in when a settlor fails to transfer property correctly?
No. When the settlor fails to transfer property correctly, equity does not assist. There are exceptions such as the Re Rose principle and Strong v Bird case
54
What is the Re Rose principle (1952)?
If the settlor has done everything to transfer property but it’s not perfected due to third-party action, equity treats the transfer as complete
55
What is the outcome of Strong v Bird (1874)?
The intended donee becomes executor, and legal title vests in them on the settlor's death if the gift intention persisted until death
56
What is Donatio Mortis Causa (DMC)?
A deathbed gift valid if made in contemplation of death; conditional on death; with delivery of dominion
## Footnote
Example: handing over car keys with a statement of intent
57
What happens to a surviving spouse with no children under intestacy rules?
Inherits the whole estate if they survive 28 days. There is no statutory legacy to consider.
58
Who inherits if there is no surviving spouse?
Children or grandchildren, parents, whole blood siblings, half siblings, grandparents, whole blood aunts/uncles, half aunts/uncles, the Crown
## Footnote
Beneficiaries under 18 have their entitlement held on trust
59
Who is responsible for paying IHT from the estate?
Personal Representatives (PRs) before distribution
60
When are beneficiaries personally liable for IHT?
Rarely, except for chargeable lifetime transfers with unpaid tax or specific rules assets received
## Footnote
These situations are uncommon
61
What are the NRBs?
NRB = £325,000, RNRB = £175,000
## Footnote
RNRB applies if the family home is passed to lineal descendants
62
What is the rate of IHT on the death estate?
40% due 6 months from the end of the month of death
63
What are Potentially Exempt Transfers (PETs)?
Gifts that become exempt if the donor survives 7 years; otherwise, they are chargeable
64
What is taper relief in relation to gifts?
Reduces tax payable if death occurs 3-7 years post-gift
## Footnote
Rates: 0-3 years = 100%, 3-4 years = 80%, 4-5 years = 60%, 5-6 years = 40%, 6-7 years = 20%, 7+ years = exempt
65
What is the difference between PET and LCT?
PET: gift to an individual, exempt if donor survives 7 years; LCT: gift into trust, chargeable immediately
## Footnote
LCT may incur additional tax if donor dies within 7 years
66
How can a married couple potentially avoid IHT on £1m?
Each spouse can use NRB and RNRB allowances; unused percentages can be transferred
## Footnote
Total potential is £1m if both spouses utilize their allowances
67
What is the charity exemption for IHT?
Unlimited if left to qualifying charities; reduced rate of 36% if 10% or more of the estate is left to charity
68
What are letters of administration with a will annexed?
Granted when there is a valid will but no executor can act
69
Who is entitled to letters of administration with a will annexed?
Executor named in the will, trustee of residual estate, anyone entitled to the residual estate
70
What are the order of entitlement for letters of administration on intestacy?
Surviving spouse, children, parents, other relatives in statutory order
71
What is required for grant valuations?
Estate needs to be itemised and valued, contact banks for balances, get investments and shares valued, value real property by an appropriate surveyor, contact creditors and funeral directors
## Footnote
These steps ensure a comprehensive assessment of the estate's worth.
72
What is the purpose of a citation in estate management?
A legal mechanism to compel or bypass someone with a prior right
## Footnote
This ensures that the executor can be passed over if they do not intend to apply for a grant.
1️⃣ Used when someone entitled to apply for probate (for example, an executor named in the will) is failing to act.
• It forces them to either take out the grant of probate or formally renounce their right.
• If they don’t respond within the time limit (usually 8 days after being served), the person who issued the citation can then apply for the grant themselves.
⸻
2️⃣ Citation to take probate
• Used when an executor has intermeddled with the estate (for example, started to deal with assets) but hasn’t applied for probate.
• It requires them to apply for probate within a set time or risk losing their right to do so.
⸻
3️⃣ Citation to propound a will
• Used when someone claims that a will exists but hasn’t yet proved it.
• It compels them to bring the will before the court so it can be formally proved (establishing whether it’s valid).
73
Under what condition can a court relieve a PR from liability?
If the PR acted ‘honestly and reasonably and ought fairly to be excused’
## Footnote
This offers protection for PRs who may have made unintentional mistakes.
74
What is the fiduciary duty of a PR?
To exercise powers in good faith in the interests of the estate and beneficiaries
## Footnote
This duty ensures that the PR acts in the best interest of those affected by the estate.
75
What must PRs obtain from HMRC after tax is settled?
A certificate of discharge
## Footnote
This protects PRs from future personal tax liabilities.
76
Can a beneficiary disclaim a gift under a will?
Yes, unless they accepted any benefit from it
## Footnote
Disclaiming a gift allows the beneficiary to avoid tax implications and may lead to inheritance under intestacy rules.
77
What is a chargeable lifetime transfer (CLT) in relation to gifts?
A gift made during someone’s lifetime that is immediately chargeable to Inheritance Tax (IHT).
It usually happens when someone transfers assets into certain types of trusts, such as:
• A discretionary trust, or
• A post-2006 life interest trust (except for a spouse, civil partner, or disabled person).
This is different from a Potentially Exempt Transfer (PET), such as an outright gift to another individual, which only becomes chargeable if the donor dies within seven years.
## Footnote
Must survive 7 years for the gift to be outside the estate for IHT.
78
What are mirror wills?
Wills in identical or similar terms, commonly for spouses/partners
## Footnote
They are not binding unless there is an agreement; either party can revoke.
79
What is required for manuscript amendments to be valid?
Original wording must be illegible, or alterations executed similarly to the will
## Footnote
Attestation by initials only is acceptable.
80
What happens if a will is physically destroyed?
It can be revoked with intention and testamentary capacity
## Footnote
Partial destruction depends on the operability of remaining parts.
81
Does the revocation of a will automatically revoke codicils?
No, but a codicil dependent on a revoked will falls with it
## Footnote
This highlights the importance of understanding the relationship between wills and codicils.
82
What is the presumption when a will is missing or damaged at death?
There is a presumption that the testator destroyed it with intent to revoke
## Footnote
This presumption can be rebutted with evidence.
83
Do mirror wills create a constructive trust upon revocation?
No, they do not imply agreement and therefore do not create a constructive trust
## Footnote
This underscores the independence of each party's will.
84
What are suspicious circumstances in the context of a will?
Red flags suggesting the will might not reflect the testator’s genuine wishes
## Footnote
Examples include significant departures from earlier wills, beneficiary involvement in drafting, testator's vulnerability, and evidence of undue influence.
85
What must the person propounding the will demonstrate under normal circumstances?
* The will was properly executed
* The testator had testamentary capacity
* The testator knew and approved of the contents
## Footnote
This typically applies to the executor or beneficiary.
86
What happens to the burden of proof if suspicious circumstances are proven?
the burden of proof shifts to the person propounding the will (usually the beneficiary or executor). They must affirmatively prove the testator intended the will and understood it
87
What does 'intention' refer to in the context of a will?
The testator’s conscious, voluntary decision to make the will in that particular form
## Footnote
Intention is crucial for the validity of the will.
88
What two intentions must the court be satisfied of when a will is challenged?
* The testator intended the document to be their final will
* The contents of that document to express their true wishes as to the distribution of their estate.
89
What evidence might a beneficiary provide to prove intention when a will is challenged?
* The testator’s independent instructions to a solicitor
* Correspondence or notes showing understanding of changes
* Witness evidence confirming understanding and volition
90
What is a caveat in the context of probate?
A protective step taken at the Probate Registry to prevent a grant of probate from being issued
## Footnote
It indicates suspicion about the validity of the will or the entitlement of the applicant.
91
When would you lodge a caveat?
* The will is invalid
* The person applying for probate may not be entitled
* There are suspicious circumstances suggesting undue influence or lack of capacity
92
What is the effect of lodging a caveat?
Probate cannot be granted until the dispute is resolved
## Footnote
This allows time to investigate or challenge the will.
93
What is undue influence?
An accusation of wrongdoing where someone overpowers the testator’s will.
## Footnote
Undue influence implies that the testator was coerced into making decisions against their true intentions.
94
What must a challenger prove in a case of undue influence?
The challenger must prove coercion.
Coercion was applied to the testator, and
• This coercion overpowered the testator’s own free will,
• So that the will reflects not the testator’s true intentions, but the influencer’s wishes.
Mere persuasion, pressure, or influence (e.g. emotional appeals) is not enough — it must amount to actual coercion.
## Footnote
This involves providing evidence that the testator's decisions were not made freely.
95
How do courts view allegations of undue influence?
Courts are cautious and require clear and convincing evidence.
## Footnote
Since undue influence is akin to fraud or misconduct, the burden of proof is higher.
96
What is the standard of proof required in cases of undue influence?
The standard is civil, based on the balance of probabilities.
## Footnote
This means that the evidence must show that it is more likely than not that undue influence occurred.
97
What does it mean for an executor to reserve their power and what must they do to do this?
If one executor does not wish to take out the grant at that time (for example, because they live abroad, are unwell, or simply prefer to let others handle it), they can formally reserve their power.
So:
They do not join in the initial grant of probate.
The grant is issued to the acting executor(s) only.
The “non-proving” executor’s authority is effectively dormant, but can later be revived if needed. The trustee reserving their power must inform the proving executors or their solicitor that they do not wish to join the application
## Footnote
This step is crucial for the executor to maintain their reserved power.
98
What form is used for the probate application that includes the reservation of power?
Form PA1P or equivalent
## Footnote
This form is essential for documenting the reservation of power within the probate process.
99
What does the Probate Registry typically send to the non-proving executor?
A notice confirming the grant and the reservation of power
## Footnote
This notice serves to keep the non-proving executor informed about their status.
100
What does the issued grant of probate state regarding reserved power?
It explicitly states that power has been reserved
## Footnote
This is an important legal acknowledgment in the probate documentation.
101
Is a formal renunciation document required when an executor reserves their power?
No, a formal renunciation document is not required
## Footnote
This distinguishes the process of reserving power from completely renouncing the appointment.
102
What if there is only one executor named under the will? Can they reserve their power?
No. A sole executor cannot reserve their power, because there is no co-executor to whom power can be reserved.
If they do not wish to act, they must either:
1. Prove the will (apply for probate), or
2. Renounce their executorship (formally give up the role),
after which the court will appoint an administrator with will annexed to deal with the estate.
If no executor proves the will, there’s nobody to whom the Probate Registry can issue the grant — and therefore, there is nothing to which power can be ‘reserved’.
103
What are manuscript amendments?
Changes made to a will where original wording is illegible or alterations are executed in a similar manner to the will
## Footnote
Manuscript amendments must meet specific criteria to be considered valid.
104
How can manuscript amendments be attested?
By initials only
## Footnote
Initials can attest pre-execution amendments, but post-execution alterations are invalid unless properly re-executed and witnessed.
105
What is presumed about filling in blank spaces in a will?
They are presumed to have been filled pre-execution
## Footnote
This presumption can be challenged with intrinsic or extrinsic evidence.
106
What is a codicil?
A document that republishes a will, applying its execution date to clauses in the original will
## Footnote
Codicils can modify or add to the original will.
107
What happens to the original will when a codicil is executed?
The original will remains valid to the extent it is inconsistent with the codicil, unless there is an express revocation of clauses
The codicil doesn’t replace the will — it supplements it.
The will and codicil together are read as one composite document.
Each codicil must be executed with the same formalities as a will (signed, dated, and witnessed properly).
If there are multiple codicils, they all stack — unless one explicitly revokes another.
## Footnote
This means that some parts of the original will may still be in effect.
108
True or False: A codicil can invalidate the entire original will.
False
## Footnote
A codicil can modify or add to the will but does not automatically invalidate it.
109
What is a specific legacy?
A particular gift
## Footnote
A specific legacy refers to a clearly identifiable gift made in a will.
110
What are the conditions under which a specific legacy adeems or fails?
A specific legacy adeems/fails if:
* No longer part of the estate
* Subject to binding contract for sale
* No longer meets description in will (subject matter change, not changes in name or form)
## Footnote
Adeeming occurs when the specific item is no longer available at the testator's death - it is no longer part of the estate at death.
111
What happens to a specific legacy if the beneficiary dies before the testator?
The gift goes into residue unless a substitute beneficiary is appointed
## Footnote
In such cases, the gift will pass to the substitute beneficiary if one has been named.
112
How are specific gifts to deceased descendants distributed?
Gifts to deceased children pass to deceased children in equal shares unless contrary intention
## Footnote
This ensures that a deceased beneficiary's share is distributed among their descendants.
113
What is the rule regarding gifts to witnesses of a will?
Gifts to witnesses fail unless two separate non-beneficiary witnesses witnessed the will
## Footnote
This rule is to prevent undue influence and conflicts of interest.
114
Can a minor give a good receipt for gifts?
No, a minor can’t give good receipt of gifts; a trustee must hold until they reach 18
## Footnote
This protects minors from handling assets before they are legally able to manage them.
115
What defines a general legacy?
A general legacy is not a particular item
## Footnote
General legacies include cash, demonstrative gifts like a horse, and residue of the estate.
116
What happens if a general legacy no longer exists at the time of death?
Executors are to buy a new one with estate funds
## Footnote
This ensures the intention of the testator is fulfilled as closely as possible.
SQE2 NOVEMBER
flashcards
Decks in class (18)
# Cards
-
Criminal186
-
Wills116
-
Property193
-
Disputes126
-
Business184
-
Ethics and Professional Conduct28
-
Tax55
-
Orals1
-
Property Drafting60
-
Disputes Drafting22
-
Business - Things to Remember53
-
Wills - Things to Remember32
-
Contract and Tort40
-
Criminal Offences and Defences to Crimes26
-
Business - Issuing Shares15
-
Wills - Interview3
-
Disputes - Advocacy50
-
Criminal Advocacy51
