Wills - SQE2

Question 1

What are the tax rates for an estate in administration?

Answer 1

Income 20%
Dividends 8.75%

No personal allowance

Tax return to be submitted by the 31st of January

Capital gains tax also charged. Annual exempt amount £3000 capital losses can be set against capital gains in the same year and any excess losses are carried forward.

Question 2

Who can claim under the inheritance provision for family and dependents act 1975?

Answer 2

Application must be made within six months of issue with grant

Applicant must be
- Surviving spouse or civil partner
- Former spouse or civil partner who is not remarried
- Child of the deceased or person treated as a child
- Someone being maintained
- Person who is living with a deceased for two years before as spouse

Must show that the will did not make reasonable financial provision for the applicant

Question 3

What is considered reasonable financial provision?

Answer 3

Provision for a spouses is higher reasonable in all the circumstances whether or not required for maintenance

For other applicants, the standard is such provision required for their maintenance so they can live decently and comfortably according to the situation. Court will consider financial resources and needs of the applicant and beneficiary. Any moral obligation of a deceased to any applicant or beneficiary. Size and nature of the estate. Any mental or physical disability of any applicant or beneficiary.

Question 4

What remedies are available to beneficiaries?

Answer 4

May recover loss by:
- Personal action against the PRS
- Tracing
- personal actions against people who have wrongly received assets 

Question 5

What are the personal representatives responsibilities?

Answer 5

• Collect information and documents about the estate
• Register the death
• Obtain valuations
• consider the validity of the will and possible claims against the estate
• Notifying beneficiaries of any potential entitlement
• Placing adverts for unknown beneficiaries and creditors
• Funding initial inheritance tax liability
• distributing the estate in accordance with the will

Question 7

When can someone renunciate the role of a executor?

Answer 7

Allowed to renounce if they have not accepted office which means intermeddled in the estate.

Must be in writing and signed and contain a statement that the person has not intermeddled. Must be signed by a disinterested witness and filed with HMCTS probate.

Once renounce cannot reclaim.

Question 8

When can an executor have power reserved?

Answer 8

Means will not be involved for now, but if circumstances changed, they can apply for a grant at a later stage

The active executor will apply for grant of probate and states that power is reserved for the other executor who can choose to apply their powers at a later date

Question 9

What is the order of entitlement to apply for a letter of administration with will annexed?

Answer 9

NCPR rule 20
- Trustee of residue estate
- Residual beneficiary. Vested interest preferred to contingent
- PR of any residual beneficiary
- Any other beneficiary or creditor
- PR of any beneficiary or creditor

If more than one person with equal rank and one has invested interest and the other has a contingent interest, the court preferring application by the person with a vested interest.

If there is a life interest under a will or a minor interest, then two administrators will be required

In application for letter of administration with Will annex the person applying must clear off those having a better right to the grant done by completing the relevant information on the application form.

Don’t need to clear off people in the same class and no need to give them notice.

Question 11

Who could apply for a letter administration?

Answer 11

NCPR rule 22 - must also have a beneficial interest

• Surviving spouse or civil partner
• Children of a deceased and issue of their child
• Deceased parents
• Deceased brother and sisters
• Deceased half brother and sister
• Grandparents
• Uncles and aunts
• Uncles and aunts, half blood
• The crown
• A creditor