Prep 2 Validity and Drafting of Wills and Changes to Estate

Requirements for a Will

Testamentary Capacity + Knowledge & Approval + s9 Wills Act 1837

Test for Testamentary Capacity under Banks v Goodfellow

Testator must:

• Understand the nature of the act and its effects;

• Appreciate the extent of the property of which they are disposing;

• Understand and appreciate the moral claims to which they ought to give effect

• Have no disorder of the mind

“Disorder of the Mind”

A testator must have capacity but may still have capacify if any delusion or mental disorder has no connection or effect upon the will

Timing Requirements

Testator must have capacity at the time the will is executed

Time Requirement exception under Parker v Felgate

If a testator had capacity when they instructed the preparation of the will and despite any future lack of capacity still understands they are signing under those instructions, the will will be valid

Key v Key

Capacity may fluctuate for various reasons such as grief

Golden Rule for capacity under Kenward v Adams

If the solicitor suspects the client may be of lacking in capacity for any reason, they should instruct a medical practitioner to make an assessment of their capacity

Presumption of Capacity

Burden of proof lies with the propounder of the will

Mental Capacity Act 2005

Contains a statutory test for capacity but does not override the common law test

Knowledge & Approval

Testator must know and approve of the will’s contents and understand the choices they have made

Presumption of K&A

Presumed if the testator had capacity and will was validly executed according to s9 Wills Act 1837

Circumstances where there is no presumption of K&A

• Testator is blind or illiterate

• Will was signed by someone on behalf of the testator

• There are suspicious circumstances

Affidavit of K&A

Made where there is no presumption of K&A and attestation clause

Attestation Clause

Explains the circumstances under which the will was executed and how the testator fully understood the will

Undue Influence under Re Edwards

Where a testator is coerced into making a will or including particular terms against their judgment and contrary to their true intention

s9 Wills Act 1837

• Must be in writing

• Signed by testator

• Must appear the testator intended by signature to give effect to the will

• Two or more witnesses who attest or acknowledge

Attestation and s15 Wills Act 1837

Any beneficiary or their spouse cannot act as a witness to the will or their gift will be void

Basic Structure of a Will

• Commencement 

• Revocation 

• Burial/ Funeral Wishes 

• Appointment of Executors & Trustees 

• Appointment of Guardians 

• Specific Gifts 

• General Gifts 

• Pecuniary Gifts 

• Residuary Gift 

• Administrative Clauses 

• Date&Attestation  

Qualified Appointment of an Executor

An executor can be limited by time, location of assets and type of assets

Professional Executor under s29 Trustee Act 2000

Can charge for their services in relation to the will

Guardians and 25 Children Act 1989

Parents may appoint a legal guardian for their children

Legacy

Normally refers to a gift of chattels or personalty

Devise

Normally refers to gifts of real property

Specific Gifts

Should be drafted so that the subject matter may be identified

Collections as a Gift

• Must be clearly identified to prevent being void for uncertainty

• May be to an individual or a class

• Where a division is required, the will should specify how the agreement should be reached

Chattels under s55(1)(x) Administration of Estates Act 1925

“tangible movable property but not money/ securities or anything used in the course of business”

General Legacies

Do not use personal language such as “my car” so usually it will be bought from the estate

Pecuniary Gifts

Financial gifts that can be specific or general

Resoduary Gifts

That which has not already been disposed of under the will or any later codicil

Date from which the Will speak

Will vary depending on:

• Property

• Collections

• People

Rule for Dating of Property under s24 Wills Act 1837

The will speaks from the date of the testator’s death

The use of “My” and Contrary Intention

Use of my refers to the property owned at the time of execution, not at the date of death and so this may change

Collections and the Date from which the Will Speaks

Always operates from the date of death regardless of the usage of the word “my”

People and the Date from which the Will speaks

Will is deemed to speak from the date of execution unless contrary intention is shown

Relieving Provisions

Relate to:

• Inheritance Tax

• Expenses & Costs of Transfer

• Charges

Inheritance Tax

Generally payable out of the residue as a general testamentary expense and not payable on the gift itself

Expenses/ Cost of Transfer

In the absence of any express provision, beneficiaries bear the burden of:

• Cost of Delivery

• Expenses incurred in maintaining the item before delivery

General Rule for Charges under s35 Administration of Estates Act 1925

The asset charged bears liability for payment unless there is contrary intention

s21 Administration of Justice Act 1982

Where the meaning of a will or clause within it is unclear or ambiguous it is possible for the courts to rule on how it should be constructed 

Extrinsic Evidence

May be submitted in the following circumstances:

• If the will or any part of it is meaningless

• If the language used in any part of it is ambiguous on the face of it

• If the will is ambiguous in the light of the surrounding circumstances

Considerations for drafting Gifts to Particular Beneficiaries

• Individual or Class gift?

• Vested or Contingent gifts?

• What happens if the beneficiary pre-deceases?

Class Closing Rules

A class closes when any one member of the class first becomes entitled in possession

Substitutional Gifts

Determine what will happen if a gift lapses for any reason

Lapsing Gifts and s33 Wills Act 1837

Prevents the gift from lapsing by allowing it to pass to the deceased beneficiary’s issue provided there is no contrary intention

Inheritance (Provision for Family and Dependants Act) 1975

Court has the power to make provision if it feels that reasonable financial provision has not been made out of the deceased’s estate

Eligibility to make an IPFDA 1975 application

• Be within the jurisdiction of the IPFDA

• Demonstrate that they fall within the recognised category of eligible applicants

• Make their claim within the prescribed time limit

Jurisdiction under s1(1) IPFDA 1975

Application may only be made where the deceased died domiciled in England and Wales

Different types of Domicile

• Domicile of Origin

• Domicile of Dependency

• Domicile of Choice

Categories of Applicant under IPFDA 1975

• Spouse or Civil Partner

• Former spouse or civil partner not remarried

• Cohabitee for more than 2 years before death

• Child

• Any person treated as a child of the family

• Any person who was maintained wholly or partly by the deceased immediately before death

Time limits on IPFDA 1975 application

Not more than 6 months from the date of grant of representation

Re Salmon in IPFDA Time Limits

Court has discretion for extending the time limit if the applicant can show special reasons for doing so

Choice of Court for IPFDA Application

County Court or High Court (Chancery or Family Division)

Property to which the IPFDA applies

The Net Estate

Assessing claims under the IPFDA 1975

1. Did the deceased fail to make reasonable financial provision for the applicant?

2. If so, what award should the court make?

Reasonable Financial Provision

An objective assessment based on statutory criteria

Surviving Spouse Standard of Financial Provision

Such financial provision as it would be reasonable in all the circumstances for a husband or wife or civil partner to receive, whether or not that provision is required for his or her maintenance

Maintenance Standard for Financial Provision

Such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his or her maintenance

What award should the court make for an IPFDA 1975 application?

• Quantum - How much should the applicant receive?

• Forum of Award - What form should the award take?

Variations

A direction from an original beneficiary to the deceased’s representative to transfer property that beneficiary is entitled to under the terms of a will or the intestacy rules to another person instead

IHT Consequences for Variations

The gift from the original beneficiary is read back to the date of the deceased's death and treated for inheritance tax purposes as having been made by the deceased to the new beneficiary

Conditions for Variations under s142(1) IHTA

• Made by the original beneficiary in writing. 

• Within the two years following the deceased 's death. 

• Contains an express statement by the beneficiary confirming section 142 should apply. 

• Not be made for consideration in money or money's worth

CGT Consequences for Variations

Can also be read back to the deceased’s estate under s62

Restrictions on Variations

• Capacity to vary

• Number of Variations possible

• Property subject to variation

Disclaimers

Operates a refusal to accept property to which a beneficiary is entitled under the intestacy rules or under the terms of a will

Limitations to Disclaimers

• Only before acceptance

• Only the whole gift

• Cannot control who receives the assets they disclaim

Disclaimers and IHT and CGT

Same rules as Variations apply

Precatory Trusts

Where a gift is made to a beneficiary by will with the wish expressed as to how the beneficiary should pass on those assets to others

Precatory Trusts and IHT and CGT

Reading back rules for IHT apply but not for CGT