Wills/intestacy and power of attorney Flashcards Preview

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Flashcards in Wills/intestacy and power of attorney Deck (50)
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Who is involved in the creation of a will?

Will is a legal declaration by a testator, it will name one or more people to administer the estate. It sets out how the assets are distributed


What is the advantage of making a will

Tax efficiency
Control over destination of the assets
Uses trusted individuals ie executors


Can an executor be a beneficiary?



When putting a will in place, what five things are needed for it to be legitimate?

In writing
Signed by the testator ( or by someone in their presence)
Full mental capacity
Not making it under duress
Two witnesses that must sign the will


What would happen if the beneficiary were to witness the will?

The will would be invalid and the beneficiary would not be able to inherit under the will.


A will is revoked by? (4 things)

Marriage or re-marriage ( unless the will has been made in contemplation of the marriage making specific reference to it)
Deliberate destruction - (testator must have full capacity)
Making of a later will - (there should be a statement that any previous wills will be revoked)
A declaration by testator that the will is revoked


At what point is a will revoked when there is a divorce?

When the divorce is finalised ie when the decree nisi comes through. An ex spouse is considered to have died from that day and will not inherit. However if the will stated that it would not be effected by divorce then the will still stands.


What are the duties of executors? (7)

Valuing the assets and the liabilities of the estate
Collecting in the assets and paying any debts( taxes/loans
Submitting accounts to HMRC (Form PA1)
Paying inheritance tax due
Obtaining probate
Distributing the estate in accordance with the will
Preparing estate accounts for the beneficiaries


At what point can the estate be distributed?

Once IHT has been paid, a grant of probate will be given by the Probate registry then the estate can be distributed


What happens where executors are unable or unwilling to act?

Administrators will be added by a court or by the probate registry and they will administer the will


What is a codicil?

Minor amendment to a will


Are mirror wills binding on each other?

No they are single wills


What is a mutual will?

Where a contractual agreement is made between 2 parties that can't be revoked without the consent of the other person


What happens on the first death with a mutual will?

This then creates a binding contractual agreement so that the survivor cannot change their will


What is a codicil and what needs to be added to it to make the changes valid?

A codicil is a minor amendment to a will. It is signed by the testator and 2 witnesses and then added to the will. It will confirm the changes and that the rest of the will remains valid.


What is a statutory will?

If someone does not have mental capacity then this is where a will can be made on their behalf. You apply to court of protection for the will and then consult all those affected by the will. They will then grant approval and the will needs to be signed by the one making the will


Who would act if there was an invalid will or no will?

Personal representatives will act as administrators of the estate. Role is the same as the executors.


What happens when someone dies intestate?

Personal representatives act and apply to the probate registry for the issue of grant of letters of administration which means that they can distribute the assets.


What are the rules on intestacy for Spouse/C Partner and issue?

£250000 and chattels absolutely to the spouse
Residue: 50% to spouse, 50% children ( absolute trust until 18 or on earlier marriage


What are the rules on intestacy for spouse and no issue

Spouse receives all the estate


What are intestacy rules for no spouse?

Everything to
a. children
b. if none, grandchildren
c, if none, parents,
d. if none, siblings
e. if none, grandparents


What are intestacy with no relatives?

Estate goes to the crown


What happens to joint assets on death?

These are not distributed on first death as they pass to the survivor regardless of will or intestacy


What is a disclaimer?

Where a person due to inherit from an estate can decline accepting it. (Provided that they have not already accepted it).


What are the rules around a disclaimer? (4)

It must be made in writing within 2 years of death
Person disclaiming must be 18 and sound mind
No reciprocation - the person disclaiming can not receive any compensation for what they give up
Deed needs to have the statement that it is to have an effect for IHT as though the disclaimed benefit has never been conferred.
The money returns back to the estate and the disclaimer can not decide where these assets are sent


What is a deed of variation and its rules? (6)

Like a disclaimer but more flexible. All the beneficiaries that may benefit need to sign the deed. They need to be 18 and a sound mind
If it increases the IHT on the estate then it also needs to be signed by the personal representatives
It must be registered with HMRC within 6 months of creation
If the DoV relatess to a will then it must refer to the will.


What tax needs paying on death and by who?

Personal representatives must pay any outstanding income tax, CGT and National insurance.
Any income tax made after death must be paid at the basic rate but there is no personal allowance available


Is CGT paid on death?

It is not paid where on any gains which have not been crystallised by the deceased.
However if the personal representatives need to sell any assets to pay any IHT then any chargeable gains will need to be declared and paid at either 20% or 28%. The estate will have the annual CGT exemption in that tax year and the two subsequent tax years. Base cost is on the date of death


Is CGT paid when assets on death are passed to a beneficiary?

No, CGT would only be paid if the assets are sold after death not on transfer of the ownership


Can any CGT losses be offset between PRs and the deceased?

Losses made by the personal representatives can only be offset by gains made by the PRs. They can not be offset with any gains made by the deceased.
If the deceased made any losses in the year of his death then these must firstly be offset with any gains in that tax year and then the previous 3 years.