Tuesday 27 March 2007

We began our study of wills and probate. We shall cover the following points:

1. Making a will, its contents and revocation.
2. The different types of gifts which may be made by will, and their effect where the beneficiary dies before the testator.
3. The types of formal papers which must be applied for by the personal representatives who sort out the deceased’s estate.
4. Things called “death–bed” gifts, more properly called “donationes mortis causa”, and the requirements for such gifts to be effective.
5. When, and by whom, a claim can be made against the estate by someone not mentioned in the will or provided for by the terms of intestacy.
6. A brief introduction to inheritance tax.

Only about one–third of persons capable of making a will do so. They may have valid reasons for not doing so, but there are lots of reasons for making a will now. You ensure that your estate passes to person(s) of your choice. If there is no will then statute – the Administrative of Estates Act 1925 – specifies who will inherit upon your death.

The law of succession deals with the ways by which property, accumulated during a lifetime, can be transferred on death. The responsibility for carrying out the transfer lies with individuals called PERSONAL REPRESENTATIVES appointed by the deceased in a will, or by statute under the terms of the ADMINISTRATION OF ESTATES ACT 1925. The law allows, with some exceptions, substantial freedom for a person to decide where his property will go after death by expressing those wishes in a will. Where an individual has not made a will the assets will be distributed to family members in accordance with certain statutory rules which we shall look at later.

A will is a document drawn up, in accordance with statute, in which a person expresses his wishes on how his assets should be distributed when he dies; this person is called the testator. The will may also include:

details of what funeral arrangements the testator requires to be made
the testator’s wishes on the donation of his organs for use in transplant surgery or general medical research
for the parents of young children it is an opportunity to express their wishes as to whom they would like to be the guardians of their children if they should die
it is also possible to make gifts of specific items like family heirlooms
for the testator to express gratitude and thanks to particular people for acts of kindness during the testator’s lifetime.

Not all of the wishes expressed in the will are binding on the personal representative, e.g. funeral arrangements, but it is a useful way of recording those views and wishes. THE WILL HAS NO LEGAL EFFECT AND IS NOT OPERATIONAL UNTIL THE DEATH OF THE PERSON MAKING IT. Any person named in a will as a beneficiary has no claim or right to the property until the testator’s death. Until that time the property can be disposed of freely by the testator.

There are many reasons why it is important to make a will; a person who dies without having made a valid will is said to die intestate, and any property he owned will be distributed according to statutory rules set out in the ADMINISTRATION OF ESTATES ACT 1925. These rules may produce effects which are contrary to the way the person would have wished the property to be distributed:

partners in a long term relationship but not married to each other could not inherit from each other unless there was a will containing the appropriate gifts made by one partner to the other. The death of one partner could therefore create serious financial problems for the other. In these circumstances unmarried couples with children need to make wills in order to protect the children and their own respective positions. A claim could be made under the INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) ACT 1975, but this may be less financially advantageous.
an unmarried mother automatically has sole parental responsibility; if she dies the father has no automatic rights with respect to the child, unless this issue has been determined before death. If the mother leaves no valid will, the children will inherit on her intestacy but this money will be kept in trust for the children until they are eighteen. The restriction on the type of investments which can be made can prevent the property being dealt with as flexibly and advantageously for the children’s benefit as would be possible under a will.
the planning and organising of a person’s affairs in a will can reduce the amount of tax due on death. Where personal circumstances change, a will can be used to reflect the new situation, i.e. provision for a new partner following the ending of a long term relationship.
Since the case of WHITE v JONES [1995] a beneficiary may bring an action against a solicitor if the solicitor is negligent in drawing up the will.

A will can be altered by executing a document called a CODICIL; this must be done with formalities similar to those surrounding the execution of a will. This is a testamentary document made subsequent to a valid will. It must state that it is made subsequent to the will and any previous codicils. It will deal with either dispositions (gifts) or formalities (appointment of executors).

Definition of a will: “it is a declaration, in a prescribed form, of intentions of the testator which are to take effect on the testator’s death”. Until the time of death the will can be revoked.

A will has the following characteristics:

extends to the disposition of property and other testamentary arrangements;
is a declaration of intent;
must be in a prescribed form, with some exceptions;
can always be revoked;
takes effect on death;
can dispose of assets acquired after execution.

The will is divided into three distinct sections:

1. the appointment of executors and guardians – executors are the people responsible for dealing with all your affairs after your death;
2. usually most important, deals with the distribution of the assets in accordance with the terms of the will;
3. establishes administrative provisions for the executors in order that they can carry out their duties.

See the HANDOUT of the will of the late Donald Campbell, which contains examples of the various types of gifts, along with other points which we shall cover during the lectures.

A will only operates as a declaration of intention. Whether the document is a will is usually clear from the nature of the document. Where the testator has produced a document which describes itself as a will or a codicil, and complies with all the statutory rules, this is strong evidence that the document is a will.

NICHOLAS v NICHOLAS [1814] – probate was refused on a will when evidence was adduced to show that the testator made ‘the will’ as a joke, and it was only a specimen.

Who can make a will?

Aged 18 years or over
of sound mind
acting voluntarily

provided the details of the will and its execution comply with the terms of the WILLS ACT 1837 and the ADMINISTRATION OF JUSTICE ACT 1982. There is no legal requirement to have a will drawn up by a solicitor, although it is usual to do so to ensure that the statutory requirements are complied with and hence that the will is valid.

Persons from the age of fourteen years can make a will provided they are in ACTUAL MILITARY SERVICE, s11 WILLS ACT 1837; these are called PRIVILEGED WILLS. See the handout I gave you relating to Private Harry Roberts, killed during the Great War.

When people are involved in military emergencies of war, there may be few opportunities to seek advice on the making of a will to ensure that the statutory requirements for a valid will are complied with. Sailors on a sinking ship may experience difficulty in finding two independent people to witness their signature, and soldiers could experience difficulty in obtaining the services of a solicitor; therefore the strict rules for making wills are relaxed for:

soldiers and airmen on actual military service
seamen at sea and
any members of Her Majesty’s naval or marine forces in actual military service.

Privileged wills REMAIN VALID EVEN AFTER THE EMERGENCY OR HOSTILITIES HAVE ENDED.

RE BOOTH [1926] – a privileged will made by the testator while on actual military service in 1882 was held to be valid after the testator’s death in 1924 – a gap of forty-two years!

ACTUAL MILITARY SERVICE (s11 WILLS ACT 1837) has given rise to much litigation:

Re Jones [1981] – Jones was a soldier stationed in Northern Ireland. He was shot, and on his way to hospital said, in the presence of two colleagues, “If I do not make it make sure Anne gets all my stuff”; he died a day later. He had previously made a formal will in favour of his mother. The court determined that he was on actual military service even though he was not at war, and that the will was privileged. It was a valid will and revoked an earlier will made in favour of his mother.

REQUIREMENTS FOR A VALID WILL

The prescribed formalities must be complied with for the will to be valid per s9 WILLS ACT 1837 as substituted by the ADMINISTRATION OF JUSTICE ACT 1982. A valid will must have the following characteristics:

IN WRITING – except for certain privileged wills – RE JONES [1981].

IN THE GOODS OF ADAMS [1972] – insertions in a different medium to the original, e.g. pencil alterations on a typed will, will be ignored unless there is proof that it is what the testator wishes.

SIGNED BY THE TESTATOR – or by some other person at the testator’s direction and in his presence. If the testator cannot write, it is sufficient for the testator to make a mark, e.g. a cross, a thumb print, or initials, identified as the testator’s. The will is usually signed at the end and this was a requirement of both the WILLS ACT 1837 and the WILLS ACT (AMENDMENT) ACT 1852. The ADMINISTRATION OF JUSTICE ACT 1982 amended this: “as long as the testator intends his signature to give effect to the will, then it will be valid no matter where it is signed”.

WOOD AND ANOTHER V SMITH AND ANOTHER [1991] – the testator made a hand-written will, two days before he died, which commenced “My will by Peter Winterborne”. It was witnessed, but the testator did not add his signature at the end. The Chancery Division Judge held that the writing of the name was a signature, but that the will was invalid as no dispositions existed at the time the signature was made, the signature being at the head of a blank piece of paper. On appeal the Court of Appeal held that, provided the signing and the writing of the subsequent disposition all formed part of the one operation, as in this case, then it would be a valid will.

Where the testator is blind or illiterate or not fluent in English, it must be clear that the will has been explained carefully and accurately to him and that he fully understands the nature and effect of the will.

TESTATOR’S SIGNATURE MUST BE WITNESSED OR ACKNOWLEDGED BY AT LEAST TWO INDEPENDENT WITNESSES – under the ADMINISTRATION OF JUSTICE ACT 1982, if only one witness is present when the testator signs, both the testator and the witness may acknowledge their signatures when the second witness adds his signature: COUSER v COUSER [1996]. If this is the case the usual attestation clause would need to be amended to reflect the actual details of the attestation.

Witnesses need not be aware of the contents of the document, but to be a competent witness the individual must appreciate that they are witnessing the testator’s signature. A competent witness could be under seventeen-years or could be an illiterate, provided it could be shown that there was understanding of the signature. A blind person however could not be a competent witness because he could not observe the signature being made.

There must be at least two independent witnesses, i.e. witnesses who are not gaining a benefit under the will.

RE BRAVDA [1968] – if the witness is a beneficiary of the will, the will is not invalid but the gift to the witness would be void

FORFEITURE RULE

Public policy determines that no one who unlawfully kills another should be able to benefit from the will or intestacy of the deceased: RE SIGSWORTH [1935].

As a matter of public policy the common law does not allow a criminal to benefit from his criminal activity , so a person who unlawfully kills another is stopped from benefiting from that person’s death either under the rules of intestacy or under the victim’s will. The rule affects not only the person convicted, but also anyone claiming through him, therefore his issue will also be unable to take unless they are entitled in their own right.

RE GILES [1972] –a wife who killed her husband was found guilty of manslaughter on the grounds of diminished responsibility.

The effect of the FORFEITURE ACT 1982 is to allow certain people found guilty of unlawful killing to obtain relief from forfeiture.

A person wishing to make a claim must do so within three months of the date of the conviction. The court will only make an order where the interests of justice require it, e.g. where the killing was a mercy killing by a carer.

Application under the Act for benefit must also be made within three months from the date of the conviction.

TESTAMENTARY GIFTS FOR CHILDREN

CONTINGENT – a pre-condition, e.g. “on attaining the age of eighteen years”. Should the child die at sixteen the gift will fail and fall into the residue.

VESTED – there is no condition, but the gift is held in trust until eighteen years of age. Should the child die at sixteen the gift is valid and forms a part of the estate.

TESTAMENTARY GIFTS GENERALLY

A will is only effective when the testator dies; until that time the beneficiaries have no interest in the property, so if the beneficiary dies before the testator, that beneficiary will gain no benefit under the will. In these circumstances the gift is said to LAPSE. The gift can be saved where the beneficiary named in the will has children living at the date of the testator’s death, as the children can be competent to take the gift; if there is more than one child, then they take the gift in equal shares: s33 WILLS ACT 1837. This applies unless there is a contrary intention expressed in the will.

The assets which are subject to disposition in the will are those assets belonging to the testator at the date of death. These assets can include assets acquired after the date the will was executed, e.g. “a gift of all my paintings to David” in the will made in 1989 would include paintings acquired in 1991.

A gift in the will of freehold land is called a “devise” ; a gift of personal property (leaseholds, cars, jewellery etc.) is called a “bequest” or a “legacy”. There are different types of legacy and it is important to be able to distinguish between them:

GENERAL LEGACY: a gift of property which is not distinguished from other property of the same type, e.g. £1,000, or “A horse for James”. If at the date of the testator’s death there is no horse for James the personal representatives will have to buy one.

SPECIFIC LEGACY: a gift of a particular thing which is identified, e.g. MY Constable painting, MY diamond ring. If the legacy does not exist at the date of the testator’s death the beneficiary receives nothing. The gift is said to ADEEM.

DEMONSTRATIVE LEGACY: a gift of a general type payable out of a particular fund, e.g. £1,000 from my Co–operative Bank account, or one hundred of my holding of ICI shares. Should there be less than the legacy at the date of the testator’s death the beneficiary will receive what there is, the remainder may be paid from the general assets if there is sufficient.

PECUNIARY LEGACY: a form of general legacy which is a gift of money out of the general estate, e.g. £1,000 to Bert.

RESIDUARY LEGACY: that part of the estate which is left, once all the debts have been paid and all other gifts have been distributed.

These distinctions between the different types of gift are important because the classification of the gift determines what happens to legacies when the estate has insufficient assets in it to pay all the testator’s debts and fulfil all the gifts made in the will. This process is called ABATEMENT. Where the estate is insufficient to meet the demands of all the creditors and beneficiaries, the creditors take priority and must be paid in full before the beneficiaries receive anything. Creditors are paid in accordance with strict statutory rules in order to prevent competition between them. If the creditors cannot be paid in full there will be nothing to distribute to the beneficiaries:

Funeral and testamentary expenses are paid first from the estate,
followed by secured debts;
assets are then applied to pay preferential debts, e.g. money owed to the Inland Revenue, arrears of National Insurance contributions;
any remaining assets go to pay ordinary debts, e.g. utilities bills.

Under the ADMINISTRATION OF ESTATES ACT 1925, gifts under a will where the estate is insolvent cease to have effect, i.e. abate, in the following order:

1. any property not disposed of by the will (subject to keeping back a pecuniary fund to meet general or demonstrative legacies);
2. property not specifically devised or bequeathed but included in the residuary estate (subject to keeping back a fund to meet pecuniary legacies);
3. property specifically set aside for the payment of debts; (the will does not state what happens to the surplus)
4. property charged with the payment of debts; (the will states what happens to the surplus)
5. pecuniary legacy fund ;
6. specific property;

You should be able to see from this that liabilities are first met from the residue. Beneficiaries higher on the list are more likely to lose their ‘gifts’ than those lower down on the list. No distinction is drawn between real or personal property.

REVOCATION OF A WILL

The testator always has the ability to revoke a will before his death, provided he is of sound mind. It is usual for a will to start with a declaration that this will revokes all previous wills made by the testator – the revocation clause. It is for the person who alleges that the will is revoked to prove it.

Wills can be revoked by:

a declaration in a later will or codicil;
marriage or re–marriage and divorce of the testator;
destruction;
a properly executed declaration by the testator.

MARRIAGE: under s18 WILLS ACT 1837, amended by the LAW OF PROPERTY ACT 1925, the general rule is that a will is revoked by a later marriage, unless it can be shown that the will was made in contemplation of [that] marriage: s177 LAW OF PROPERTY ACT 1925. The marriage must be a valid marriage to have the effect of revoking the will. A general intention expressed in the will would be insufficient to save the will.

SALLIS v JONES [1936] – the testator stated that “this will is made in contemplation of marriage”. This was insufficient to save the will from revocation by a later marriage.

contrast

PILOT v GAINFORT [1931] – a testator who was, at the time he made the will, living with the woman later to be his wife, made a will in which he gave to “Diane Featherstone Pilot my wife all my worldly goods”. The will was valid because it was made expressly in contemplation of the testator’s subsequent marriage.

Previously, the position was that when the testator’s marriage ended in divorce or nullity, gifts in the will to the former spouse would ‘lapse’. The will also took effect as if the appointment of the former spouse as an executor and trustee of the will were omitted. This provision was made in s18A (1) of the WILLS ACT 1837 which was an addition provided for by the ADMINISTRATION OF JUSTICE ACT 1982.

Section 18A (1) also provided that these effects would not take place if a contrary intention expressly appeared in the will. However, problems arose in relation to the use of the word ‘lapse’ when applied to gifts made to the former spouse. This meant that the gift failed and fell into the residue. If the will provided for a GIFT OVER in the event of the spouse failing to survive the testator, the gift over would not take effect.

RE SINCLAIR [1985] – the will left property to the testator’s wife with a proviso that if she failed to survive him by one month, it was to pass to the Imperial Cancer Research Fund. It was held that on the death of the testator following his divorce, the gift to the Imperial Cancer Research Fund failed and the property passed as on his intestacy.

This is now radically altered by s3 of the LAW REFORM (SUCCESSION) ACT 1995 which amends s18A (1) so that in relation to a will made by a person DYING on or after 1st January 1996, any property, or an interest in property, which is devised or bequeathed to the former spouse will pass as if the former spouse had died on the date on which the marriage was dissolved or annulled. This means that only the former spouse, and not any other beneficiary, will be deprived of the benefit. There is a similar provision regarding the appointment of a spouse as an executor or trustee.

JUDICIAL SEPARATION

WILL: a decree of judicial separation has no effect on a will and the spouse can take any benefit from it.

INTESTACY: when a decree of judicial separation is in force, the surviving spouse is treated as if he/she were already dead and will take no beneficial interest from the intestacy: s18(2) MATRIMONIAL CAUSES ACT 1973. The testator can (if he or she so wishes) make a gift to a former spouse in a new will, once the relationship has ended.


DESTRUCTION: the testator destroys the will or directs someone else to destroy the will; the testator must intend that the will is destroyed.

Destruction is defined in the s19 WILLS ACT 1837:

“... burning, tearing or otherwise destroying” the will.

CHEESE v LOVEJOY [1777] – the testator made his will and executed several codicils to it and then, several years later, drew a line across each page and wrote on the back ‘revoked’. He called in his maid and told her that he had revoked his will; he then threw the crumpled papers into a wastepaper basket. The maid retrieved the papers. The court held that the testator’s acts were not sufficient to revoke his will!

Destruction of the will must be by the testator or by someone who has the testator’s authority to act, but the DESTRUCTION MUST BE IN THE TESTATOR’S PRESENCE:

RE KREMER [1965] – a telephone call to a solicitor instructed the solicitor to destroy the will and gave instructions for a new will. The will was not revoked because the destruction was not in the testator’s presence

ANOTHER WILL: a will drawn up by a solicitor will generally always include an express revocation clause. The clause can revoke the whole of a previous will, or only part of a previous will:

WRITTEN DECLARATION: a will may also be revoked by executing a written declaration to that effect: s20 WILLS ACT 1837.

RE SPRAKLANS [1938] – the testator wrote a letter to her bank manager, who had her will in his possession, requiring him to “destroy the will already made out”.

COMPARE

RE KREMER [1965] – mentioned earlier, the instruction to destroy the will was verbal only.
ADMINISTRATION OF THE DECEASED’S PROPERTY

The deceased’s estate is administered in accordance with the rules contained in the ADMINISTRATION OF ESTATES ACT 1925. Individuals who have the responsibility for administering the estate are called PERSONAL REPRESENTATIVES. Their duties are:

collection of the deceased’s assets
payment of creditors in full
distribution of testamentary gifts in accordance with the will, or,
if there is no will, in accordance with the rules of intestacy.

Personal representatives are in a position similar to that of trustees, in that they control the deceased’s assets and must act in accordance with any valid instructions left by the deceased and with statutory rules. They do not have the title to the assets in their names. They incur no personal liability when administering the estate, so long as they act in accordance with their statutory powers.

WILL = executor
INTESTACY = administrators

APPLYING FOR THE GRANT

Whether for probate or letters of administration, it will be necessary for him to submit an OATH, contained in an affidavit sworn/affirmed by him. It includes the following information:

DEATH OF THE DECEASED. Swears to the death of the deceased, stating the date of death if known.

DOMICILE AT DEATH. The oath states where the deceased died domiciled and this is noted in the grant.

WILL OR INTESTACY. Swears that “the paper writing now produced to and marked by me to contain the true and original last will and testament” of the deceased (on an application for probate or administration with the will annexed ), or that the deceased died intestate (on an application for simple administration).

TITLE OF APPLICANT FOR GRANT. The applicant shows his title to the grant for which he is applying, e.g. that he is the sole executor of the will (on an application for probate), the residuary legatee and devisee named in the will (on an application for administration with the will annexed ), or the surviving spouse or eldest child and one of the persons entitled to share in the estate (on an application for simple administration). On any application for administration, the oath must state in what manner all persons having a prior right to the grant have been ‘cleared off’.

SETTLED LAND. Whether, to the best of the applicant’s knowledge, information and belief, there was land vested in the deceased which was vested previous to his death and not by his will and which remained settled land notwithstanding his death.

DUTIES OF THE PERSONAL REPRESENTATIVES. A statement as to the duties of the personal representative, which are to collect in and administer the estate according to law and to provide a full inventory of the estate and render an account of the administration of the estate to the court. The applicant swears that he will carry out these duties as set out in the oath.

VALUE OF THE ESTATE. The gross value and net value of the estate passing under the grant to the best of his knowledge, information and belief.

Normally on an application for probate or administration with will annexed, the applicant lodges the original will in the registry, where a photocopy of it is made and annexed to the grant. If the original will is not available a duly authorised copy of the will may be admitted to proof. However, even if there is a will the registrar may require further proof as to its authenticity or validity. He may require either evidence of due execution or evidence as to its plight and condition which matters are contained in Rules 12 to 15 of the NON–CONTENTIOUS PROBATE RULES 1987 (NON–CONTENTIOUS PROBATE RULES).

DUE EXECUTION. A properly drawn up attestation clause raises a presumption that the will was duly executed. If the will contains no attestation clause or the clause is insufficient, or if it appears to the registrar that there is some doubt about the due execution of the will, he must, under Rule 12 require an affidavit as to its due execution before admitting the will to probate in common form. For instance:

the signature of the testator appears after the signatures of the witnesses, or
the signatures of the witnesses seem to have been added at different times,

the registrar may consider that there is some doubt about the execution of the will despite the presence of an attestation clause. The affidavit of due execution must then be sought from one or more of the attesting witnesses, or if not available, from someone else present when the will was executed. If none of those persons can be traced, or they are dead, the registrar may then accept evidence on affidavit from other persons to show that the signature on the will is that of the deceased, or any other matter which may raise a presumption in favour of due execution.

If a will appears to have been signed by a blind or illiterate testator, or by another person at the testator’s direction, or for any other reason gives rise to doubt as to the testator having had knowledge of the contents of the will at the time of its execution, then the registrar must satisfy himself that the testator had such knowledge before admitting the will to proof and may, under Rule 13 require affidavit evidence for this purpose.

PLIGHT AND CONDITION. By Rule 14 where there is any “obliteration, interlineation or other alteration” which has not been validated by the testator and the witnesses by proper attestation, then the registrar will require evidence to sh 7 7465ow that the amendments were present at the time the will was executed. There is a rebuttable presumption that an unattested alteration was made after the execution of the will.

If there are any marks on the will, e.g. pin or staple holes, then the reasons for these marks must be explained to the registrar: for example, is there a missing document and if so what is it and where is it?

Under Rule 15 any appearance of attempted revocation of a will by burning, tearing or otherwise must be accounted for to the registrar’s satisfaction. For example, was the will torn up by mistake or was it singed in an accidental fire?

Such affidavits of plight and condition will usually be required from the person finding the will or having knowledge of the reason for the state of the will.