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Distribution Of An Estate Notes

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Distribution of an estate 1) What assets fall outside of the estate for distribution purposes and what is their value?

a) General rule

All assets are part of the estate

b) Exceptions (assets that do not pass into estate for distribution purposes)

1) Joint property

a) Held as tenants in common Will pass into estate for distribution

b) Held as joint tenants Will not pass into estate for distribution, will pass to other tenant by survivorship

2) Insurance policies

a) Simple life insurance policy Will pass into estate for distribution

b) Insurance policy written in trust Where the benefit of the policy is written in trust for another, the proceeds will not pass into the estate for distribution

3) Pension scheme benefits

a) Non-discretionary pension Will pass into estate for distribution

b) Discretionary pension scheme If the contributor nominates the trustees to discretionarily pay the benefit of the pension to third party on the contributor's death the proceeds will not pass into the estate for distribution

4) Settlements

Settlements (trusts) If the deceased is a beneficiary under a trust, the trust will pass in accordance with the terms of the trust

Deceased is Life tenant Deceased is a life tenant, when they die, the interest will pass to Remainderman in accordance with trust

Deceased is Remainderman à May be part of the estate a) If the life tenant has died and the remainder interest has vested in the deceased, the settlement will be included

c) To whom is the asset going and why
/under which rule? (i.e. joint tenancy)

5) Donationes mortis causa (DMC) (See Undergrad Stuff)

DMCs A gift given by the deceased, conditional upon death, will not pass into the estate

6) Statutory nominations

Statutory nominations If amount in each account does not exceed £5000 it will not be part of the estate for distribution:


Friendly society


Industrial society


Provident Society Account

b) If the life tenant is still alive when the deceased dies and the interest has not vested, the settlement will not be included

2) What assets fall inside the estate for distribution purposes and what is their value?

Apply rules from above

3) Deduct the estate's debts from the value of the distribution estate

This will normally be deduced from the value of the gift of residue as this is normally expressed as 'subject to the payment of debts, funeral, testamentary expenses and legacies'

4) Analyse each provision of the will in turn à State what type of legacy it is

1) Specific legacy à Of a particular item of property

2) Pecuniary legacy à A gift of money

3) Right to occupy a house à Not giving the house to beneficiary but allowing them to live in it for a specified period

5) Analyse each provision of the will in turn à To whom are the assets within the distribution estate going?

1) The legatee has predeceased the testator

a) The gift will normally fail / adeem; or

b) There is a substitutional beneficiary; or
à The gift will pass to substitutional beneficiary

c) The predeceased legatee is the child of the testator - s.33 Wills Act 1837


The gift will pass to the legatee's children (the testator's grandchildren)

i) The gift will pass to the legatee's children (the testator's grandchildren)

ii) This is unless the testator has ousted s.33 WA by stating 'to such of my children as shall survive me' 2) There is a survivorship condition

a) Such as "gift to [x] if they survive me by 28 days"

b) If condition is not met because either the beneficiary predeceases, or survives the testator but by less than [28 days] the gift will fail and falls back into the estate

3) A beneficiary or a beneficiary's spouse / civil partner (who were married at time of execution) witnessed the will

a) The signature to witness is valid, the will is properly executed, the witness can be a executor, but the beneficiary will lose their benefit under the will - s.15 WA 1837
à The gift will fail

Exception If there are at least two other witnesses or if the will is subsequently confirmed by a duly executed codicil, the attestation by the beneficiary can be disregarded and the gift will not fail

4) The property that the testator owns has changed since making the will

a) There is a substitutional gift; or
à The beneficiary will receive the substitutional gift

b) There is no substitutional gift

The testator has disposed of the property which is gifted in the will (a guitar) and not bought another (a guitar)

a) The will normally speaks from the date of death - s.24 WA 1837
à The property is not owned, the gift will fail

b) The use of the words, 'my', 'now', or 'at present' creates an exception to s.24 WA and speaks from the creation of the will
à The property is not owned, the gift will fail

The testator has disposed of the property which is gifted in the will (a guitar) and has bought another (a guitar)

a) The will normally speaks from the date of death - s.24 WA 1837
à The original property at creation of the will is not owned, but as the will is speaking from death the new property (guitar) is owned and the legatee will receive the new property

b) The use of the words, 'my', 'now', or 'at present' creates an exception to s.24 WA and speaks from the creation of the will
à The original property at creation of the will is not owned, and as the will speaks from the creation of the will, the gift will fail

c) Where there is a Codicil it re-executes a will
à 'My' would now mean the new property owned and the legatee will receive the new property

The testator has left a gift of a collection which is capable of growing

a) The will normally speaks from the date of death in spite of any use of 'my' etc
à The gift of a collection (e.g. shares) will be a gift of the number of shares the testator held at death

b) A collection applies to any collection including:


Stamp collections;


Shares;


Personal Chattels

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