GlossaryOf

Will-writingTerms

ADMINISTRATORS

When a person dies and has not written a valid Will that can be found they are said to have died ‘Intestate’.

Under the rules of intestacy the nearest relative or the main beneficiary are entitled to take on the legal work of managing the Estate, and they are called Administrators.

Administrators must obtain documents from the High Court to show that they have legal authority to deal with the property.

These documents are called ‘Letters of Administration’. They usually take several months (and sometimes years) to obtain.

Where a valid Will has been written and found, the people undertaking task, chosen by the testator and named in the Will, are called ‘Executors’. Executors appointed under the Will do not have to apply to the court for ‘Letters of Administration’.

They obtain their written authority to act much more quickly and simply by requesting a ‘Grant of Probate’ from the Probate Registry.

Neither process is necessary if the Estate comprises only actual ‘cash’ and chattels (i.e. movable personal possessions). Certain types of Bank or Savings Accounts with less than £5,000 credit balance technically do not require letters of administration or a grant of probate to be released though it is often insisted upon by the organisation holding the funds.

AGE

Section 7 of the Will Act 1837 states that a testator in England must be 18 or over, and in our view (though not required by law) a witness should too.

The only exceptions are as follows;

If a person is married under the age of 18 he or she may write a Will and assume the role of a major. Persons on active service (including civilian personnel). Those forces personnel serving in Northern Ireland are covered.

This is classed as a privileged position.

AGRICULTURAL LAND

Includes any crops or animals upon it unless they are clearly identified as being the subject of a separate gift.

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AGRICULTURAL AND BUSINESS PROPERTY

If the testator envisages that his farming or other business would be carried on by his children or Trustees for the benefit of the minor or other beneficiaries then there are tax advantages. The business assets can be gifted in the Will to the donee or to Trustees, with the special powers to administrate the business.

If the testator cannot see his children continuing his business then he can make arrangements during his lifetime as to what will happen on his death. See IHT section for Business Tax Relief

ALIAS

A Testator is said to have an Alias when they are regularly known by more than one name, e.g. professional entertainers, journalist, authors etc., who have both private and professional name.

ALTERATIONS AND ADDITIONS TO A WILL

Under Section 21 of the 1837 Will Act, alterations to a Will are assumed to have been made after it was signed and are ignored until the contrary is proved.

The Testator can correct the text of the Will, but if he does, he must sign in the margin next to the alteration and the witness should do the same prior to the actual attestation of the Will.

If an alteration, correctly attested, cannot be read, probate is granted in blank. Additions below the signature are ignored.

ANIMALS

A gift to look after a pet cannot be for any longer than 21 years (Perpetuity rule). Following the demise of a Yorkshire terrier which has been left a legacy of £20,000 and subsequently destroyed by the executors -The Midland Bank- precedents have been developed for pets, designed to protect them and provide funding for the remainder of their natural lives.

ATTESTATION

The witnessing of the signing of a Will, without which it is not legally binding.

BENEFICIARIES

Any person or organisation who receives some benefit from the Testators estate, be it item(s), cash or property, is a beneficiary.

Section 15 of the 1837 Wills Act states that if a beneficiary or his spouse witness a Will, any gift to that person is void. The signature and document will not be affected. If three witnesses signed the Will, one would be superfluous and if one was due to benefit; he would be able to take that gift.

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BLIND PERSONS

A blind person cannot witness a Will. A blind testator can have the Will signed by someone on his behalf. See special paragraph for witnessing a blind persons Will.

CHALLENGING A WILL

The Inheritance (Provision for Family and Dependants Act) 1975 provides that certain categories of dependant can apply to the Crown where adequate provision has not been made under the terms of a deceased’s Will or under the laws of intestacy.

In some circumstances, this may result in a court over-ruling the Will (or occasionally the rules of intestacy).The people that can apply to the court to be including in the distribution of an Estate where a Will exists are:-

The surviving spouse, Former spouse who has not remarried, Sons or daughters, stepchildren, (illegitimate children have the rights) Any person who was maintained by the testator, Polygamous spouses.

There is no age limit on claimants. Most applications are from adult children.

Whoever wishes to make use of the Inheritance Act must do so within 6 months of the grant of representation. An extension can be granted by the court.

For a spouse, reasonable provision is required, for others reasonable provision for maintenance is required. In dealing with a spouse, the court will assess the situation as if the marriage had been ended by divorce rather then death. It follows then that a former spouse who has remarried would not have the grounds for a claim.

The courts, in arriving at a decision, will also take into account any written evidence left by the testator in explanation of his reasons for not making a provision. Accordingly, the Testator should be advised to leave a written statement of their reasons, if they appear to be making reasonable provision. Preferably, this should not be done within the Will, but on separate document. See Declarations.

CHARITABLE GIFTS

The general rule to determine whether a gift is charitable or not is ‘In order for a gift to be charitable it must considered to be for the benefit of the community or for an important element of the community’.

It is vital that the name and registered number of the charity is correctly detailed where a legacy is made in a Will.

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The Charity Aid Foundation (48 Pembury Road, Tonbridge, Kent TN9 2JD, Tel, 017232 771333) or the Charity Commission (Central Registry, Tel. 0207 210 3000) can be contacted for further information or charity numbers.

Gifts to qualifying charities do not attract Inheritance Tax.

CHATTELS

The word ‘Chattels’ is used in several of the Will paragraphs we will use. Chattels are as defined by the Administration of Estates Act 1925 s.55 (1)(X) and are as follows:

Carriages, horses, stable furniture and effects, motor cars and accessories, garden effects, domestic, animals, plate, plated articles, linen, china, glass, books, pictures, prints, furniture, jewellery, articles of household or personal use or ornament, musical and scientific instruments and apparatus, wines, liquors and consumable stores.

Chattels do not include money, securities for money and items used for business purposes.

Care should be taken when referring to Chattels where collections are including. It is usually best to specifically include (or specifically exclude) collections from chattels.

If chattels have been purchased on a credit sale (Access, Visa etc.) then they are vested in the testator and will pass under the Will.

CHILDREN

The word children includes illegitimate and adopted children but not stepchildren unless specified.

CODICIL

A codicil is an addition to a Will (a maximum of three Codicils allowed to one Will) and has to be signed and witnessed in the same way as the original Will. (Section 9 of the Wills Act 1837)

The witnesses of a codicil do not have to be the same people as on the Will.

We will only replace the Will as a whole, as ‘additions’ can sometimes throw doubt upon the meanings in the original Will.

COMMUNITY CARE ACT 1990

This act title is shortened from The National Health Service and Community Care Act 1990 and it has far reaching consequences for everyone.

The essence of this Act is that the local authority will provide for you if your funds are below the means tested level. If you are over that level then you can pay your own way.

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If a Will left all the estate to the spouse and that spouse was in a nursing home, that inheritance would be used to pay for the fees. Limiting the gift to the surviving Spouse gifting the remainder of our estate to the children would to be a solution, Beware of the Inheritance Act 1975, making adequate provision.

Joint assets: if there where joint savings of £20,000 and the spouse enters into a nursing home she will be assessed as having £10,000 capital. If £2,000 from the capital is spent on nursing home fees, the joint savings would be £18,000 and she would be assessed as owning £9,000. In these circumstances she would not be eligible for Income Support and would have to continue paying out of savings.

Consider opening separate accounts splitting the capital £10,000 each, when £2,000 has been spent on fees the wife will be entitled to apply for income support.

Whilst in joint names if the testator dies then the whole sum will belong to the survivor, the capital sum of £20,000 may deprive her of Financial Assistance.

CONTENTS OF A WILL

A Will should contain whatever is appropriate from the following list:

*1. Statement that this is the last Will and Testament of testator with the full name and address as at the date of the Will.

2. Statement that all previous Wills are revoked.

*3. Appointment and payment of Executor(s), guardians and trustees where applicable.

4. Trustee powers and recitals.

5. Details of gifts of specific items.

6. Details of pecuniary legacies (gifts of money)

7. Details of devises of land.

*8. Clauses dealing with the remainder (residue) of the estate.

Clauses dealing with alternative residuary beneficiaries.

10. The method of disposal of the body (burial, cremation etc.)

*11. Testator’s usual signature.

*12. The signature of two witnesses, at the foot of each page and at the foot of the Will.

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*These sections are absolute requirements under the Wills Act 1837. If any of these are omitted, the Will is not valid.

DATE ON A WILL

A Will does not have to state the date on which it was signed.

The date may be put in without the witnesses being present.

Opening paragraphs can show a blank space which allows the Testator to write the date he gave the instructions for the Will, in addition to recording the date of attestation next to his signature which leaves no doubt as to the date of both writing and attestation, making the Will a legally binding document.

DECLARATIONS

If for whatever reason a testator wishes to disinherit a member of his family, this is his wish and the instruction will be taken. The reasons for this should be made clear to the executors of the Will, using the declaration clause, explaining the action, and by writing a letter of explanation and inserting it within the bound Will for storage.

The letter must be signed and dated by the Testator on the same date of signing his Will for the avoidance of doubt. This may not prevent the disinherited relation from making a claim against the estate under the Inheritance (Provision for Family and Dependants) Act 1975.

The steps to be taken by the Willwriter when the testator wishes to take this course of action are as follows;

1. When the draft Will is sent to the client, confirm to the client the consequences of this action in respect of the Inheritance (Provision for Family and Dependants) Act 1975.

2. Ask the testator to leave a bequest in his Will so that it is clear he did not forget the person. The gift of an item should be of a family nature, such as a clock, painting etc.; this is preferred to a small pecuniary legacy which would be a snub.

3. Include the acknowledgement if disinheritance paragraph which will require that the Testator sets out his case, so that in the future the reasons are not lost.

Other declarations of love, gratitude etc. should not be put in the Will, but dealt with by separate letter, which can then be stored with the Will.

DEEDS OF VARIATION

Under Section 142 of the Inheritance Tax Act 1984, there are rules which allow the beneficiaries of an estate to vary by mutual agreement the provisions of the Will within a period of two years from the date of the deceased’s death, so that property may pass to them in a more tax efficient manner.

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Proposals to abolish Deeds of Variation were made in the 1989 budget, but not ratified because of their tax avoidance potential.

DISPOSAL OF THE BODY

The executor is not legally bound to carry out instructions regarding disposal of the body (though he generally will if circumstances permit), because the law does not recognise any property in a dead body as the body is not classed as an item owned by the testator which he can dispose of.

It may be wise for the testator to discuss their preferences with their nearest relatives, as the Will may not come to light until after the funeral has taken place. This is particularly appropriate where a professional Executor has been appointed. The simplest method is to provide a copy Will for the executor.

If the body is to be used for medical research or transplant surgery this can be included in the Will, we would prefer the use of a donor card and/or notice to the next of kin should be used rather than a reference in the Will which may not be found or read immediately.

Donations are covered under the Anatomy Act 1984, s4, which provides that the executors, or in some circumstances residential institutions can donate the body or organs, as long as there is no reason to think that the testator or relative, would not wish it. Obviously, a statement would clarify the testator’s wishes.

DISPOSAL OF ITEMS PRIOR TO DEATH

If a specific item (i.e. a car) is disposed of prior to the testator’s death it cannot be replaced by an alternative item or sum of money.

If there is a possibility of such an event a substitute item should be named in the Will, if necessary.

DIVORCE

Although a marriage automatically revokes a Will (unless otherwise stated), a divorce does not. It does however under the Administration of Justice Act 1982, s18 (2);

i) The appointment of a former spouse as executor or trustee shall be omittedii) Any devise or bequest to the former spouse shall lapse, the word lapse is construed as

meaning simply, fail.

UNLESS there is an expression to the contrary in the Will.

Under the rules of intestacy no part of an estate passes to an ex-husband or ex-wife.

Where a Will exists an ex-spouse who has not remarried could make a claim against the Estate under the Inheritance Act 1975.

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DO IT YOURSELF – COMMON ERRORS

Solicitors say that they make more money from sorting out the problems created by home-made Wills than they do from drawing up Wills for clients!

Pre-printed forms often cause problems too. When striving to make the wording of his Will fit the framework of the form, it is easy to inadvertently commit some blunder, for example:

1……..I give £500 to my cousin John Flint confident that he will do what is right by the rest of my cousins……(creates a binding legal trust in favour of the cousins, and would need a court judgement to be resolved)

2……..I leave £500 to Mr. And Mrs Trent…..(Is this £500 each or to be shared? A court would rule £500 each)

3……..I give all my money to my wife Alice…. (Does this just mean cash around the house, cash in the bank, or the whole estate?)

4……..I leave everything to my wife Alice, and on her death it is to be shared between my sons John and Peter… (Is a disaster, as normally property left to a person is then his/hers to dispose of. The implication here is that the property belongs to the sons, though held in trust by the wife).

DOMICILE

A Testators domicile is their ‘permanent home’

If the permanent home of the testator is in a foreign country or some foreign element is involved, specialist advice relating to the particular country should be obtained before a Will is produced.

A permanent move from this country to another country after a Will has been made does not invalidate the Will made in this country.

A Will must conform to the law of the country where it was made to be valid in England (or elsewhere in the world). To be valid abroad, a Will must either comply with the laws of the country in which it is made (England) or the country in which the Testator intends to make his permanent home.

DONOR CARDS

If the testator wishes to donate his body for transplantation or research the donor card is a more practical method than a Will. The Will maybe in storage and the delay in obtaining the testators

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consent, subject to next of kin approval, may render the gift useless. All users of the Donor system are now on a Donor Registration Centre computer in Bristol.

ENDURING POWER OF ATTORNEY

An Enduring Power of Attorney is a document in which someone can give another person power to act on their behalf, in their name, in regard to their affairs.

The document will remain valid after the subject has become mentally incapable of managing their own affairs.

A Power of Attorney can be made at any age and has particular relevance in advancing years, in business or spending a considerable amount of time abroad.

EN VENTRE SA MERE

Unborn child which may be a beneficiary in a Will, (i.e. should my daughter have a child/children then I leave these grandchildren of mine ….. )

ESTATE

Property of a deceased person.

EXECUTORS

The person or people who deal with the administrative, accounting and legal work involved in identifying, collecting and distributing the Estate of a deceased person who has left a Will.

Executor is the male version and Executrix the female. Executors must be at least 18 years of age. An appointed Executor can refuse the task but must renounce the appointment in writing, sign the renunciation and file it with the probate registry. Once a person has accepted, he cannot renounce.

If an Executor dies whilst carrying out an Executorship then his executor must continue the task. A maximum of four executors may apply for probate.

Minors can be selected as Executors, but must be 18 when the testator dies.

It is usual to leave a legacy to an Executor who is not the immediate family.

The Executors obtain a document called Grant of Probate from the High Court to show that they have legal authority to deal with the estate. The appointment of joint executors is the ideal situation.

An executor may be passed over by the Probate Registry in special circumstances, such as conviction of manslaughter, being old or frail or intermeddling.

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Executors have statutory powers to appoint additional trustees if another trustee is required, e.g. where land/immovable property is in trust.

The process of obtaining Grant of Probate is not necessary if the Estate comprises of small amounts of cash and chattels and totals less than £15,000.

Certain types of Banking or saving Accounts with less than £5,000 credit balances do not require a grant of probate to be handed over, though it is often insisted upon by the organisation.

Only a professional Executor can charge for his services as an Executor, the Solicitors Act 1971 determines that professional executors who may charge are, Solicitors and trust Corporations. It is possible to be contracted by the Executor to carry out certain probate matters and charge for this, the application for the Grant must be made by the Executors, not the probate advisor.

FOREIGNERS

Since 1870 a foreigner has been able to own land or other property in this country (with the exception of a British Ship!) And thus can leave property by Will just like any other citizen of the UK.

FREE OF TAX

Gifts can be specified as free of tax in which case any Inheritance Tax that is due will be paid for from the Estate prior to the gift being made.

FEAR, FRAUD ETC,

A Will is invalid if it has been induced by fraud, fear, coercion or excessive pestering.

GENDER/PLURALS

The Law Property Act 1925 s61 states ‘…..In all Wills made or coming into operation after the commencement of this Act, unless the context otherwise requires:-

‘Month’ means calendar month ‘Person’ includes a corporation The singular means the plural and visa versa The masculine includes the feminine and visa versa.

Hence it is not a legal requirement that we change Testator to Testatrix. Executor to Executrix, he to she, his to hers, etc, or visa versa. We do however endeavour to make these changes to produce a presentable document.

GIFTS

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Gifts of money are called ‘pecuniary legacies’. Legacies are gifts of money or an item, but not of immovable property or land. In the event of a cash shortfall, gifts of specified and identified items take priority over gifts of money.

Gifts of land or fixed property are ‘devises’. They cannot be made to a minor unless in trust, with a minimum of two trustees appointed.

Please be as specific as possible when describing a gift so as to avoid any ambiguity. Include detail of colours, previous owners (i.e. Wife’s mother’s wedding ring), material etc.

As the Will has no effect until death, any gifts in a Will disposed of prior to death cannot take effect and are said to have ‘adeemed’.

FAILURE OF GIFT

Gifts shall fail for the following reasons;

a) Gifts to witnesses or the spouse of a witnessb) Lapse – the beneficiary dies before the testatorc) Disclaimer – a beneficiary refuses the gift (e.g. My pet rattlesnake)d) Statutory exceptions e.g. killing the testator (as a rule. A person who commits murder or

manslaughter cannot benefit from his victims Will, or through intestacy, except in insanity)

GRAVES, MONUMENTS AND ASHES

Graves, vaults, tombstone or monuments may be looked after for a maximum of 99 years as a result of an agreement funded through a Will. Consideration of gravestones or memorials is often left to relatives.

It is therefore important to be aware of restrictions that may be in force covering height of gravestone or wording that is not permissible.

Ashes can be scattered anywhere in the UK or buried in churchyards or cemeteries.

The estate is not liable to pay for a gravestone; the beneficiaries should pay for it.

GUARDIANS

Under the Guardianship of Infants Act 1886, guardians can only be appointed by a Will, Deed or a court. A guardian can be appointed to act jointly with a surviving spouse.

The guardian is the person(s) who in the absence of the parents will make the decisions that the parents would have made. The consent of the appointee should be obtained.

It is important to consider the choice of guardian very carefully given that the children may one day be residents in the appointed guardians’ home. Due attention should be given to the size of the

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testators family and that of the guardian, the need for housing extension or possibility of having to move house, moral issues and discipline.

A surviving parent, unless otherwise stated in the Will, is automatically the sole surviving guardian, and can act perfectly well on their own. A guardian can be appointed to act with the surviving spouse though this is only usually done if the testator does not feel the spouse is able to act alone.

If, after assuming the role of guardian, the guardians themselves die, then it is not possible to 'back track' to the original parents Will for the appointment of an alternative, even if one was mentioned. It is up to the new guardian to take the step of appointing a successor. It is not necessary for the new guardian to wait until the death of the testator to do this, it can be done immediately. This is particularly important where the appointed guardian has no children of their own, therefore, would probably not think to do so in their Will.

On occasions, the testator may wish to appoint several people to act jointly as guardians. It should be remembered that the guardians’ principle job is to make decisions for the children. Ideally, there would be one guardian, though in practice, very often a husband and wife couple are named, and this is perfectly acceptable. Any attempt to appoint more than two, though legally permitted, should be discouraged, as the ability of the guardians to come to a decision is likely to be impaired. Where two sisters are appointed, for example, they both have equal status and both may wish to take in the children, a solemn situation, the courts would have to arbitrate.

If no guardian is appointed in the Will and both natural parents die, then the courts MUST make the appointment. In doing so, their main concern is the well being of the children, but the first people considered for the position will be the natural father’s parents. If they cannot act, will not act or are unsuitable, the next option(s) would be the natural father’s brothers and sisters. Only if none of these are suitable would the court then turn to the natural mothers family, parents first then brothers and sisters.

If the children’s parents are not married, and both die, then the only person who can appoint a guardian is the mother of the child as she has the parental responsibility. The natural father’s family are not considered at all, whether or not the fathers name appears on the birth certificate.

Where the natural father survives and is not married to the mother of the child he will have no parental responsibility, the Court of Protection would assume this role and the father has the right to go to the courts to obtain the parental responsibility.

The father without custody of his illegitimate child cannot appoint guardians for that child.

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INHERITANCE TAX

This is the only form of tax or duty imposed on the death of a person who is domicile in the UK, and relates to property passing between one person and another as a result of a person’s death.

Main Exemptions:

The Personal Allowance for IHT of the deceased. Small presents: Any numbers of gifts totalling up to £250 per recipient, and other gifts totalling up

to £3000 in each year are exempt from tax. Surviving spouse Charities: All gifts by Will to a qualifying charity are exempt from tax Political Parties: Gifts in a Will to the main established political parties are exempt Death on active service exempts the estate from IHT Gifts for national purposes, museums, galleries, universities etc, are exempt Agricultural and Business Relief qualify for this tax relief the testator must have owned the

property for at least two years before his death

Further information on tax exemptions can be obtained from the Inland Revenue Tax Book.

The payment of IHT is due within six months after the end of the month in which the death occurs. No grant of probate is given without payment.

INTESTATE

The description of a person who has died without leaving a valid Will or a Will that cannot be found.

INTESTACY

The property of a person who dies without a valid Will (dying intestate) is divided between his family according to the rules in the Administration of Estates Act.

This applies to anyone whose permanent home at the time of death is in England or Wales even if they die elsewhere.

Where a person dies without a Will, the law provides that after deduction of IHT and debts to the Estate it shall pass as follows;

1. Where a spouse and issue survive;

Spouse takes - personal chattels, PLUS £125,000 absolutely, PLUS a life interest in half the residue. (only the income can be taken, not the capital)

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Children take - Half the residue immediately, PLUS half the residue on the death of the spouse. (the issue of any child who has died takes their parents share)

2. Where the spouse survives leaving no issue, but where parent, brother or sister of whole blood or their issue do survive.

Spouse takes - personal chattels, PLUS £200,000 absolutely, PLUS half of the residue absolutely.

Parents takes - Half of the residue absolutely (if parents are not alive then brothers and sister of whole blood or their issue take half of the residue)

3. Where the spouse survives and there are no issue, parents or brothers and sisters of whole blood everything is taken by the spouse.

4. Where no spouse survives.

Children take equally If there are no children or their issue the parents would take equally If there were neither issue nor parents the estate passes to the first of the categories below

which contains someone alive:

i) Brother or sister of whole blood EQUALii) Brother or sister of half blood EQUAL iii) Grandparents EQUALiv) Uncles and Aunts of whole blood EQUALv) Uncles and Aunts of half blood EQUAL

If no one in these categories exists the estate then passes to the crown, though its interest may be waived if another person, particularly a dependant, can establish a strong claim.

JOINT ACCOUNTS

Executors must fix a value upon the share of assets held in a joint account belonging to the deceased, and will have to locate the source of the money paid into the account.

The account can however continue to be drawn upon by the other party even though the other has died and a grant of probate has not been obtained.

JOINT OWNERSHIP OF PROPERTY

Property can be owned in any one of 3 ways;

1. Sole ownership. If the testator is the sole owner of the land or property, they may dispose of it in any way they see fit.

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2. Joint Tenancy. Under a joint tenancy the property is owned by two or more people together. It can be considered that each owns the entire property. Thus, on the death of any of the joint tenants, the survivor(s) AUTOMATICALLY own the entire property, and the deceased share cannot be disposed of by the deceased in any other way in a Will.

3. Tenancy in Common. Under this form of ownership, the property is again owned by two or more people together. However, each has their own share (or beneficial interest), which they can dispose of in any way they see fit, in a Will. The shares may or may not be equal.

The most usual situation is joint tenancy, and tenancy in common is only usually arranged if it is specifically asked for at the time of purchase of the property, though it can be arranged at a later stage if required.

Tenancy in Common should be found in situations such as;

Husband and wife on a second marriage A group of friends who club together to buy a property A group of business partners buying a property to let as a business sideline

A person may in his Will gift (or devise) any land or property which he is the sole owner or may gift his share of 'Tenancy in Common'.

LEGACIES

Gifts made under a Will. All legacies are net of IHT unless stated. If the provisions of the Will require all beneficiaries of the Will to bear IHT, charges clauses to Solicitors could be liable to the same order.

LIVING WILL (ADVANCED DECISION)

A Living Will is an advanced declaration of your wishes on future medical treatments should you be unable to communicate because of mental and/or physical incapacity.

MENTAL CAPACITY

The testator must be of sound disposing mind at the time of execution or if he was of sound mind when instructions were given, so long as he knows he is executing a Will for which he has previously given instruction. The test of sound disposing mind has been stated in this way by Cockburn CJ in Banks vs. Goodfellow:

It is essential that a testator shall;-

understand the nature of the act and its effects shall understand the extent of the property of which he is disposing shall be able to comprehend and appreciate the claims which he ought to give effect and with a view to the latter object, that no disorder of mind shall poison his affections, pervert

his sense of right or prevent the exercise of his natural faculties that no insane delusion shall influence his Will in disposing of his property and bring about a disposal which, if the mind had been sound, would not have been made.

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Mere eccentricity or foolishness of the testator does not, of itself, invalidate a Will.

MENTALLY HANDICAPPED - LEARNING DISABILITY

1. Mentally Handicapped Testator

If the testator is mentally handicapped to the extent that they are deemed not to have 'mental capacity', that is they are unable to express their wishes, then they are unable to write a Will.Provision can be made through the courts, for another person to be appointed to make a Will on behalf of a mentally handicapped person, but this should only be done with proper, detailed legal advice.

2. Mentally Handicapped beneficiaries (Non dependant)

In leaving a gift to a non dependant beneficiary, problems may arise which could out weigh the benefits i.e.

If the gift is large, the court of protection could apply to have an official receiver appointed for the beneficiary in order to administer their gift on their behalf;

If the gift is of cash then the beneficiaries means tested benefits could be affected;

3. Mentally Handicapped Beneficiaries (dependant)

It is vital to appoint guardians as the mentally handicapped child will never attain the mental age of 18 and will therefore always need guardians to make decisions, and not to imbalance the estate which could result in action being taken by the Court of Protection against the Will.

Leaving gifts to a mentally handicapped dependant may produce exactly the same problems mentioned above for a non dependant, with the added problem that if no provision is made, then the Court of Protection would contest the Will under the Inheritance (Provision for Family and Dependants) Act 1975 to gain a share of the estate for the dependant for whom none had been made, thereby leaving the same problems as before.

To help alleviate some of these problems, provision may be made under the terms of a Discretionary Trust. The discretionary trust paragraphs in section 7.1 will allow the estate to be distributed without creating an inadequate provision.

Section 89 of the Inheritance Act 1984 provides that where there is a discretionary trust for the benefit of a disabled person he is treated as tough he has a life interest. The property settled in his favour is held upon trusts under which, no interest in possession exists and not less than one half of the settled property is applied for his behalf.

Likely chosen distribution

PARENT’S (£150,000 estate)

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Mentally Handicapped Normal children x 2 £25,000 £ 62,500 each

The mentally handicapped child may be placed in a local authority home, who after means testing may decide that the child has sufficient funds to make payments. The Court of Protection could take the other two children to court on the basis that there was insufficient provision for the mentally handicapped child.

Suggested distribution

PARENT’S ESTATE

Mentally handicapped Normal children £75,000 £ 37,500 each

In a Discretionary Trust, with the beneficiaries being the mentally handicapped child and the normal children.

The Discretionary Trust would be applied at the total discretion of the trustees and at any one time no absolute ownership is determined.

MISSING PERSONS

Tracing beneficiaries in order to distribute the contents of a Will is a common problem.

The Trustee Act gives protection to personal representatives who advertise the details of missing beneficiaries.If nothing is heard after 2 months then distribution may commence among the known beneficiaries and will not be liable to any person who is entitled.

In some circumstances the beneficiaries may be able to recover something from the ‘overpaid’ beneficiaries.

MORTGAGE

If the testator has a mortgage without mortgage protection, then an express reference to discharge the mortgage debt must be given.

MUTUAL WILLS

Mutual Wills are identical Wills, usually made by husband and wife, leaving everything to each other and ultimately to the same beneficiaries (i.e. the children).

This method does not allow a surviving spouse to re-draw the Will in favour of another person i.e. New spouse. The Will is irrevocable on the death of the first party. The survivor cannot defeat the Will by making large lifetime gifts. The mutual Will is not to be confused with a mirror Will.

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NIL RATE BAND

The Nil Rate Band is the sum of money which is free of tax on the death of the testator and is changed generally in the annual budget.

NOMINATION OF SAVINGS ACCOUNTS

Some types of saving accounts (e.g. National Savings) can be nominated by specific prior arrangement in favour of a particular person on production of a death certificate without a letter of Administration/Grant of Probate.

This does not apply to Giro Accounts, Premium Bonds, or Save as you Earn.

ORPHAN CHILDREN

Under the rules of intestacy when both parents die leaving children, the property of both is held on trust until the children come of age. In the meantime the moneys from the Estate are invested under quite strict rules which may prevent the property being dealt with as flexibly and advantageously as might have been wished.

OTHER DOCUMENTS

If other specifically identifiable documents that exist when the Will is written are referred to in a Will, they will be included as part of it, even if they are not signed or witnessed.

OVERSEAS WILL

If a testator has an overseas property or Will then the appropriate paragraph must be used giving notification to the Executor of this Will (albeit that he does not have to act as executor in respect of that foreign property). The Will must be proved in the country of origin.

PAGE NUMBERING

It is not required by law to number the foot of each page or to sign the foot of each page.

Putting page numbers in however makes it easier to lead the clients through the Will.

The last page is always the page with the attestation paragraph.

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The names and addresses page does not form part of the Will.

PLENISHINGS

Domestic articles in a house other than personal possessions.

POWER OF ATTORNEY

A legal document which gives the nominated person the power to act on behalf of another in legal matters.

PRE ARRANGED FUNERAL PLANS

This is a method of purchasing a funeral at today’s prices and dying at tomorrows. It may be purchased by lump sum or by instalment.

PRIOR DEATHS

If a son or daughter destined to receive something under a Will dies before the testator their children would automatically get that share.Anyone else destined to receive something under a Will who dies first will not inherit. In the case of an ordinary legacy (£100 to John Brown) or a specific bequest (my diamond brooch to Jane Brown) it will fall into the property going to the person who is to receive the residue.

If the residual legatee himself dies first, this leaves part of the property indisposed of, called partial intestacy. That part of the Estate is dealt with under the rules of intestacy.

PRISONERS

There are no restrictions on any prisoner leaving property under a Will.

PROBATE WHERE A WILL EXISTS

A sole executor appointed by a Will can obtain probate. If there are two or more executors, then it is not necessary for all of them to obtain probate. The application can be made by any one of the executors.

A brief outline of the basic procedure (whether there is a Will or not) is as follows;

Register death, obtain a death certificate, arrange funeral obtain necessary forms from local probate registry.

Prepare accounts listing all assets and liabilities of the estate.

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Complete necessary forms and return to the probate registry together with accounts and the ORIGINAL WILL. The grant of probate will then be forwarded to the Executor.

Place the statutory public notices and then start to collect in, or dispose of, any assets and settle any liabilities.

Distribute any specific legacies to relevant beneficiaries, obtaining receipts.

Prepare accounts showing any outstanding taxes have been paid, once approval has been obtained from the probate registry the estate can be released to the residuary legatees.

PROBATE WHERE NO WILL EXISTS

In these cases application for letters of administration should be made by the next of kin of the deceased person. This will be;-

The widow (widower), or if none A child of the deceased person, or if none A parent of the deceased person, or if none A brother or sister of the deceased person, or if none Other relatives

In the absence of any relatives whatsoever, the Crown will benefit from the estate. Application is made to the nearest and most convenient local probate registry or probate office.

PROBATE WITHIN MARRIAGE

Because of the rather unusual rules that pertain to property within a marriage, your clients are likely to be unaware of who owns what between them. The rules of ownership are therefore worth knowing, though they will not often have more than a theoretical significance.

The purchaser is the owner. Under English law, each item of property belongs to the person who paid for it. Thus, if a man and wife decide to purchase a dishwashing machine and the man subsequently buys one on his way home from work with his credit card, the dishwasher belongs to him. No doubt his wife would consider it to be joint property, but it is not.

This heavily penalises a non-working spouse who can virtually own nothing in his/her own right and as a result the situation is under review by the Law Commission. This can develop into a problem if the 'owning' spouse becomes bankrupt or is the subject of an enforcement of debt (through a bailiff). If a married woman inherits £10,000 from a relative and subsequently gives her husband £1,000 to purchase a three piece suite on his way home from work, the three piece suite is hers.

Gifts

Transfer of property between married people can alter its ownership. If a husband gives or transfers something (jewellery, car) to his wife, the assumption is that he is making her a gift and the jewellery

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or car becomes hers. If a wife transfers something to her husband, however, the assumption is that she is not making a gift, unless it can be proved otherwise.

Death or Divorce

There are laws which reallocate property on death or divorce and which identify ownership of items acquired for joint use and benefit - and thus the current laws of property within marriage only become relevant in the event of debts, or perhaps as part of inheritance tax planning.

PROTECTIVE TRUST

A powerful tool that can provide an income to a beneficiary, under the control of trustees, forever or a specific period (e.g. until he reaches 30 years of age)

PUBLIC TRUSTEE

Government department which can be appointed as executor. A fee for services is charged.

RECITALS

Under the Inheritance (Provision for Family and Dependent) Act 1975, reasonable provision must be made for certain people or groups of people.

If no such provision is made, but for what the testator feels are good reasons, then reference to those reasons should be made in a recital, or statement.

RELIGION AND INHERITANCE

Koran

The Koran sets out clearly in section IV (1 - 12) the directions of Allah as to how the estate of the deceased is distributed.

Torah

The Jewish faith in the same way as the Islamic faith has a distribution set out in its religion.

RESIDUAL LEGATEE

Person or trust receiving the balance of the estate after all other gifts etc.

REVOCATION

A newly written Will does not automatically revoke an earlier one, unless it contains a revocation clause. If a person leaves two Wills that are inconsistent with each other they stand together.

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A Will is revoked by deliberate destruction (burning, tearing up) by the testator, with the intention of revocation (section 20 Wills Act 1837). Accidental destruction does not form revocation itself. Deleting or writing 'cancelled' does not revoke a Will.

A Will is not revoked by writing to whoever is holding it asking them to destroy it.

Section 18 of the Wills Act 1837 states that a Will is automatically revoked by the marriage of the testator unless it was made (and stated to be made) in contemplation of that forthcoming marriage. Divorce does not automatically revoke a Will.

If a Will has been lost or destroyed, this does not form a revocation (i.e. House fire); probate may be granted on proof of its content, execution and attestation.

RIDER

A rider is an additional comment included with a legacy, making reference to the legacy or the beneficiary.

Riders must always be fair, but should rarely be made conditional upon the beneficiary carrying out, or not carrying out, some duty (e.g. I give my Rolls Royce to John Brown if he marries my sister Jane).

In most cases it would be best to limit riders to expressions of wish which would not be binding on the beneficiaries, but which they would probably carry out in respect to the Testator (e.g. I give my Rolls Royce to John Brown and wish that he should pass it on to his son on his death).

SECRET AND SEMI-SECRET TRUSTS

If a gift of a large some of money to a beneficiary is made in a Will, this gift when transferred to the beneficiary appears to the outside world to be a generous gift. The reality is that the testator has in his lifetime prepared and established a Secret or Semi-secret Trust agreement with the beneficiary, for the benefit of a third party, mistress or illegitimate child. A Semi Secret Trust indicates in the Will the terms of the trust but does not disclose who the true beneficiary is.

SEVEN YEAR RULE (IHT)

The most usual form of lifetime gift which is relevant for IHT is a gift given by one person to another. Such a gift is exempt from tax if the donor lives on for another seven years. However, if a donor does not survive the seven years then tax may become payable. The rate of tax payable on the gift reduces in relation to the number of years between the date of the gift and the date of death.

death within 3 years of a taxable gift 100% of the death rate is payable death between 3 and 4 years after gift, 80% is payable death between 4 and 5 years after gift, 60% is payable death between 5 and 6 years after gift, 40% is payable death more than 7 years after gift, no IHT is payable.

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It should be noted that if death occurs within 7 years of the gift, gifts of up to the nil rate band will be added to the estate for tax purposes. In effect, all gifts equal to or less than the nil rate band will be liable to IHT in full if death occurs within 7 years of the gift.

SOLICITORS

There is no legal requirement that a Will should be drawn up or witnessed by a solicitor.

Inaccurate use of legal terminology has sometimes created difficulties when Solicitors have used legal jargon. Plain English is perfectly adequate.

Nevertheless, a solicitor’s advice can be required where other legal issues are in question. For example, where there is an income from a family trust with the right for that income to be determined by the recipients Will.

SOLICITORS FEES - PROBATE

Solicitors fees (which are deducted from the estate before it is passed to beneficiaries), for acting in a normal probate case are likely to be in the order of 3% on the first £2 - 10,000 of the estate plus 2.5% on the next £40,000 and reducing in percentage thereafter, or on a time expended basis, at the hourly rate of the partner. (Usually about £100 per hour).

SOLVENCY

After deduction of tax and expenses etc. specific bequests are given out, followed by pecuniary legacies and anything remaining goes to the residual legatee.

If there is only sufficient in the estate to meet the bequests and legacies, then the residuary legatee gets nothing!!

If there is a shortfall in the value of the estate, that is the estate is insolvent, then all specific bequests are made but the pecuniary legacies are reduced in equal proportions EXCEPT for any legacy with priority.

If the estate is even less, then specific bequests would have to be sold in order that the pecuniary legacies could be met and specific bequest would fail.

STAMP DUTY

None is applicable.

SUCCESSION

The Inheritance or transfer of property on death.

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SURVIVORSHIP DESTINATION

A destination in a title to land which, on the first death transfers the property to the survivor of the original owners.

THE LAW PROPERTY ACT 1925 SECTION 194

This section provides that if two or more people die in circumstances where there is no evidence as to who died last, for succession purposes; the younger is deemed to have died last and so will inherit any gift to him in the elders Will.

For this reason a Survivorship clause is drafted in the Will to dictate the destination of a gift, if the beneficiary does not survive by 30 days or more.

Advantages of succession

Stops the same estate being administered twice Stops the estate passing to any other person other than the intended

TESTATOR

The person who gives instructions in a Will for the administration and distribution of his estate, following his death.

TRUSTEE

A person appointed by the testator to look after funds or property until they are due to be transferred to a beneficiary. In most Wills, the executor is appointed as Trustee. He would have to use his powers if there are any specific trusts in the Will and one the Estate had been administered and gifts made under the Will been distributed. He is responsible and governed by trustee law to administer the trust and distribute it as per the directions. There are a number of different clauses relating to specific responsibilities of being a Trustee.

It is always advisable to appoint two trustees in order to share opinion and responsibility. Where land or immovable property is involved, two trustees must be appointed.

TRUST AGE

Unless otherwise specified, any bequest held in trust for a minor will be held until he/she reaches the age of 18.

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For trusts which will pass to the beneficiary entirely on their reaching a particular age, this age can be increased.

It is quite reasonable to contend that at the age of 18, the beneficiary is not equipped to handle valuable assets properly, and therefore specify an age of say, 21. This contention can also be applied

to the age of 21, but slightly less convincingly. By the time the argument has been continued to the age of 25, it becomes increasingly difficult to pursue, and we would not recommend such a course of action. The absolute maximum would be 29.

Certain trusts can be arranged to provide income for longer periods.

VARIATIONS

Rules allow the beneficiaries of a Will to vary its provisions within two years of the testators death, so that property may pass in a tax efficient way.

WILL DOCUMENT

Do not pin or staple anything to the document which might give the impression of a missing piece of paper that might have formed part of the Will.

WITNESSES

Must not be beneficiaries of the Will or those legacies will be lost.

A blind person should not be a witness.

A minor should not be a witness if it can be avoided, though there is no law against this.

The Will must be first signed be the testator within the sight of the two witnesses, who should both be present together when he signs.

The testator must sign first and the two witnesses afterwards. Each witness must sign in the presence of the testator, though not necessarily in the presence of each other.

An attestation clause must be included in the Will, or affidavits will be required from the witnesses, who might be dead!

The witnesses address is not required by law but should be included if possible. If the signature does not show the surname clearly then it should be printed together with the address.It is advisable to obtain the names and addresses of the witnesses to put on file, if the Will(s) were to be lost or destroyed then this information may be of great importance to prove the Will in the absence of the original.

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