Law of Succession - Assignment Example

?Law of Succession Table of Contents Table of Contents 2 Question 3 Question 2 7 (a) Who will be responsible for administering Janice’s e 7 (b) How will Janice’s estate be distributed? 9 References 14 Question 1 Overview of the Case A person named Mr. Roger Harbottle died at an age of 91 years, assigning a gift of ?50,000 to his solicitor, Mr. Andrew Browne and his estate to his daughter Jane Harbottle. . However, the errors present in the will have been identified to cause confusion as to the actual gains of Mr. Browne. The deceased will of Mr. Harbottle was homemade and was formulated in the year 2010 on 22nd March. Circumstantially, Mr. Browne appointed Ms. Josie Morrison, who is a professional solicitor of Morrison and Jeffries LLP with the aim of advising him with regard to certain issues with respect to the will signed by Mr. Harbottle. To be specific, in the will, the name of the executor who is Mr. Browne has been misspelled as ‘Mr. Brown’. Moreover, the address of Mr. Browne has been inscribed wrongly in the will which has again raised confusions regarding the gains of Mr. Browne from the will by Mr. Harbottle. Furthermore, as the will was roughly torn, which damaged the date of signing the will, the specifications mentioned in the same became hardly interpretable that again increased confusions. Additionally, the last two letters of the surname of the testator was also found torn wherein Mr. Browne denied any such careless act from his end and also did not depict any significant interest of the gifted amount of ?50,000 being wealthy in his own right. Sometimes back, Mr. Browne formulated his will and assigned Harriet Reid, the accountant of Mr. Browne, to be his executor. Mr. Browne further deciphered his unwillingness to accept the gift offered through the will by Mr. Harbottle in order to prevent high tax imposition. Mr. Browne has planned to provide this sum to the daughter of his gardener, Mary Stapleton for her university study. Additionally, the case scenario depicts that Mr. Browne is pleased with the service of Ms. Morrison and has therefore planned to pay her a sum of ?5000 be means of inheritance in his will. The will of Mr. Browne also specifies that if she dies before Mr. Browne, the sum will be paid to her husband. Discussion The Issues Which Are Identified In the Case Mr. Browne has observed that there are number of issues in relation to the deceased will of Mr. Harbottle. As Mr. Browne is the ultimate executor of the will, he has raised the issue that his name has been misspelled as ‘Brown’ instead of ‘Browne’ in the will. Moreover, Mr. Browne has also noticed that the address which has been mentioned in the will is inappropriate or wrong as Mr. Browne resides in a different place when the will was formed. Additionally, Mr. Browne and Late Mr. Harbottle were dweller of a same village but Mr. Browne could not remember to promise to execute the will of Harbottle owing to the absence of any deep relation with Mr. Harbottle. However, Mr. Browne is willing to carry out the will even though he is reluctant to accept the entire amount gifted due to tax implications and has thus planned to gift the amount to his gardener’s daughter if obtained [Wilson v. Beddard (1841) 12 Sim. 28]1. In this regard, Mr. Browne is seemed to be confused about the procedures which are required for the appropriate execution of the will. Contextually, it is important that the name as well as address of an executor or executors should be mentioned in detail taking into account the up-dated data for better validity of the will. Eventually, the misspelled name of the executor may restrict Mr. Browne from executing the will of Late Mr. Harbottle. Moreover, the address of Mr. Browne was also mentioned as incorrect. As per the ‘Inheritance (Provision for Family and Dependants) Act 1975’ the name and address of an executors or executors are required to be mentioned correctly for the appropriate execution of the will of a late person2 [Barrett v Bem [2012] EWCA Civ 52]3. Furthermore, an executor for a will is required to be selected from individuals who have close relationship or friendship with the late person. However, in this case, it has been identified that Mr. Browne was neither a close relative nor a friend of Late Mr. Harbottle. This can be argued as a major issue which has been recognised in this case. Based on these grounds, a probate court may ask for any previous will wherein the failure of presenting a previous will may lead the execution of inheritance as void. These facts may ascertain the will as ‘intestate’ which implies that a person is unsure about the distribution of the property after death. In this regard, the executor’s task is to perform in accordance with the ‘Intestacy Rules’ of the government4. The second issue which has been identified in this case is that the will of Late Mr. Harbottle has been torn though Mr. Browne has firmly denied any responsibility owing to the damage. As a consequence for the damage, the last two letters of the surname of the testator and the end of the date on which the will was signed was found torn. In accordance with the Will, Mr. Browne was offered with a gift of ?50,000 while the estate was left to Mr. Harbottle’s daughter, Jane Harbottle. In this respect, the will formulated by Late Mr. Harbottle may be considered as invalid for the damages and therefore, the will may not be executed in an appropriate manner. In this context, a photocopy of the will is required to be produced before the Court for asserting its validity with the intention of executing the will in accordance with the interest of Late Mr. Harbottle [Fulton v Kee [1961] NI 1]5. It has also been identified from the case that an executrix named Ms. Reid has been selected by Mr. Browne to perform as his executor. Mr. Browne perceived that Ms. Morrison who is his solicitor will modify or alter the will which he has formulated sometime back with respect to the gift of a sum of ?50,000 offered through the will of Mr. Harbottle following the execution of the will. However, Mr. Browne also noted that if gained, the sum of ?50,000 will be affecting his tax position and thus he has planned to decline the inheritance offered as a gift to him, to be a malpractice for availing tax benefits. Moreover, another issue can be identified in this case in relation to the presence of witnesses while signing the will. It has been determined that in order to ascertain the validity of the will, a testator is required to sign the will with the attendance of two witnesses at least. Additionally, the signature of the two witnesses should be present as an acknowledgement for the legitimacy of the will. The absence of the signatures of the two witnesses hereby reveals that the will of Mr. Harbottle is void or invalid2. Question 2 Janice Waterlow formulated a will in the year 1996 on 18th December. In the year, 2012 she died. During execution, the validity of her will was ascertained on the basis of the Wills Act 1837 under section 9. However, until her death, circumstances were observed to have changed dramatically, wherein the execution of her will became subjected to certain questions and scrutiny. (a) Who will be responsible for administering Janice’s estate? There are certain formalities which are required to be adhered in order to ensure the validity of the will. In this regard, the will should be executed in a written format and the testator is required to duly sign the will for its validity in the presence of two witnesses wherein the witnesses with their signatures should concede the appropriateness or validity of the will. On the basis of such concerns, Janice had elected two individuals as her executor, which was deemed to be an ideal number as on the death of one executor, the other one will be performing the executor activities. An executor can be noted as the family members, friends or some professionals having close relationship based on trust with the deceased. The major activities of an executor are to collect the assets of the deceased person and pay off debts which are due. At last, an executor plays the vital role to distribute the balance of assets to the beneficiaries successfully6 [Wightman v Rynette-James [1976] 1 WLR 161, 168B]7. In accordance with the will of Janice, it has been identified that her husband, Mr. Thomas Waterlow and her close friend, Elizabeth Freemantle were elected as executors of the details which were mentioned in the will. In this case, there are two executors who were chosen by Janice. In this respect, husband as well as friend of deceased Janice, are required to conduct administrative operations on behalf of the tasks as mentioned in the will. The administrative tasks can be performed by one executor on behalf of the other one. Moreover, the executors are required to discuss about the procedure in accordance with which the wills of Janice will be performed. However, the decisions which are made in relation to the activities to be performed in accordance with the will should be noted and must be signed by both her husband and friend8. It can be comprehended that both husband as well as friend of Janice are eligible for conducting the tasks which are mentioned in the Will. After the death of Janice it has been recognised that she and her husband were divorced in the year 1998. In this respect, it can be comprehended that her husband is ineligible to perform as an executor for the will having no trust based relationship with Janice in the year 2012. Stating precisely, the basic rule is that in case of divorce the former partners are not eligible to act as an executor. Moreover, the former partners are also not eligible to acquire any gift or asset left by the deceased in his/her will9. On the other hand, it has been identified that her friend Elizabeth Freemantle has moved to Bolivia and is also determined not to act as an executrix of deceased Janice as they had lost contact since the year 2004. In accordance with the Wills Act 1834, an executor is required to be a resident of the UK in order to conduct the activities of an executor on behalf of Janice. In this respect, Freemantle is residing in Bolivia since the year 2004 and has also refused to act as an executrix. Freemantle is determined to be a non-resident of the UK and in this regard she is ineligible as an executrix. In this context, the will of Janice can be determined as invalid. In this case, without any appropriate executors, the ‘Non-Contentious Probate Rules 1987’ will offer ‘order of priority’ to individuals to appear before the Court in relation to acquire authority in order to administer the estate of deceased Janice. The person who will be appointed will therefore be recognised as an administrator10. (b) How will Janice’s estate be distributed? The appointed administrator will be assigned with the task of performing the will of deceased Janice in accordance with her interest. The appointed administrator is required to acquire ‘letters of administrations’ which will provide a legal assurance to perform the will. Accordingly, the administrator at first is required to scrutinise all the paperwork which are deemed to be important in order to ascertain the appropriateness of the value of assets of Janice. The administrator will also seek through Janice’s financial statements, income sources, insurances policies, ‘HM Revenue and Customs’ (HMRC) and loans as well as credits among others to obtain a rational underpinning of Janice’s interests. The administrator, once determined, the finances of Janice, is required to ascertain the Inheritance Tax (IHT) which is to be paid to the government. In this regard, the assets of Janice are required to be valued in relation to bank balances and other financial assets such as shares as well as bonds. Moreover, other substantial financial assets such as property owned by Janice should also be valued. Additionally, gifts or payments which are offered to the charity trust in the last seven years prior to the death of Janice must also be scrutinised and re-valued to be distributed to Janice’s decedents11. On ascertaining the valuation of the assets, an appropriate form should be submitted to HMRC and if the amount exceeds ?325,000, IHT is required to be paid. Once the IHT has been paid, only then the administrator or executor will be liable to perform the will of Janice. The balance which is left after the payment of IHT should then be distributed among the beneficiaries. With respect to the IHT regime, if the valuation of assets is valued as over ?325,000, the rate of IHT is 40% on the excess amount. The IHT rate may be charged at a reduced rate of 36% if the over 10% of the assets are offered to any other charity if not the Ocean Rescue Charity which ceased its operations prior to Janice’s death12. In accordance with the will of Janice, she intended to offer her friend Louis a sketch painting of the Yorkshire Dales. Moreover, she also proposed to offer her Holland & Holland side by side shotgun to Louis. In this regard, it has been observed from the case that the Holland & Holland side by side shotgun was auctioned and sold by Janice about five years back from her death. The valuation of assets owned by Janice will therefore be reduced with this property as it was sold. In this respect, Janice’s friend Louis will not receive any compensation for the Holland & Holland side by side shotgun. Louis will only receive the sketch painting of the Yorkshire Dales as per the will. According to the will, Janice has intended to offer a sum of ?200,000 each to her children Linda Waterlow and Munro Waterlow. After the death of Janice it was noted that Linda Waterlow died in a motor cycle accident which took place in the year 2011. However, Linda Waterlow had two children named Annabelle who is 26 years of age and Sam who is 16 years of age. In this respect, with the death of Linda Waterlow, her two children are eligible to have an equal share from the amount of ?200,000 which was intended to be offered to Linda Waterlow, as Linda Waterlow died in a year prior to the death of Janice. To be noted, Sam will not immediately receive the legacy amount being a minor at the age of 16 years. Hence, the legacy amount will be offered to Sam at the age of 18 years but for the while, this amount will be managed by trustees13. On the other hand, Munro Waterlow is observed to be residing in Edinburgh, but as Munro Waterlow is an adult and of sound mind, he is eligible of receiving the amount of ?100,000 (an equal share of ?200,000) as proposed in the will. As Munro Waterlow is a non-resident of the UK, it is required to discuss the taxes which are implied thereon11. It has been observed in the case that 1926 35B Bugatti race car was intended to be offered to Janice’s cousin, Andrew Lamont. After the death of Janice, it has been recognised that the 1926 35B Bugatti race car was sold in the year 2009 by Janice. The amount which has been acquired from the sale proceeds had been used to purchase a Mercedes E Class Cabriolet car. In this respect, the proposed interest of Janice is perceived to be violated. Thus, Andrew Larmont the cousin of Janice will not be entitled to receive the gift of 1926 35B Bugatti race car as it is already sold. It can be further assumed in such circumstances that gifts which are not properly identified, described or existed after the death of an individual, may be lost for relative or friends to whom the gifts were proposed to be offered on the basis of the will14. It is mentioned in the will that an amount of ?25,000 will be offered to the Ocean Rescue Charity with the objective of saving the lives of sea. After the death of Janice, it has also been conceived that the Ocean Rescue Charity which was recognised as a registered charity has ceased its operations just prior to the death of Janice. With regard to this incident, the sum of ?25,000 which was proposed to be offered to this charity institution will be deemed as void. In this regard, an investigation is required to be conducted with the objective of ascertaining that whether the Ocean Rescue Charity has been acquired by some other charitable institutions. If it has been recognised that the charity is undertaken by other charitable institution then the sum of the legacy will be offered to the charity. On the other hand, as it was recognised that Janice wished to offer an amount to a charity which is associated towards the development of sea lives, if the registration of the Ocean Rescue Charity has been struck off from the ‘Register of Companies’ then the legacy amount can be offered to some other charity institution with an identical notion of developing sea lives15. It has also been identified from the will of Janice that the remaining of the estate after the distribution of the aforementioned interests will be offered to her husband, Mr. Thomas Waterlow. After the death of Janice, it was further observed that Janice and Thomas Waterlow had divorced in the year 1998. In this respect, Thomas Waterlow will not be entitled to receive any legacy amount or gift in compliance with Janice’s will. It has also been observed that Thomas Waterlow had a child named Charles before marrying Janice. Janice and Charles were again identified to possess a healthy relationship amid them. In this respect, Charles is also entitled to have an inheritance of the estate of Janice. In this regard, the residual amount, after the distribution made in accordance with the will of Janice, will be distributed among her children, Charles and Munro as well as her grandchildren, Annabelle and Sam (at the age of 18)16. References Barlow, John S, Anthony G King and Lesley C King, Wills, Administration and Taxation: A Practical Guide. (Taylor & Francis, 1990). Borkowski, Andrew, Textbook on succession. (Blackstone Press, 1997). Central Law Training, ‘Wills and Probate’ [2011] (Uploads) accessed 12 May 2013. Citizens Advice, ‘Who Can Inherit If There Is No Will – The Rules of Intestacy’ [2013] (Uploads) accessed 12 May 2013. Crown, ‘Inheritance (Provision for Family and Dependants) Act 1975’ [1975] (Uploads) accessed 12 May 2013. Crown, ‘Inheritance Tax’ [2013] (Uploads) accessed 12 May 2013. Dunn, Virginia and Veronica Lachkovic, Family Law in Practice. (Oxford University Press, 2012). Epoq Group Ltd., ‘Losing a Gift’ [2013] (Uploads) < http://www.mylawyer.co.uk/losing-a-gift-a-A76045D77068/> accessed 12 May 2013. Holdsworth, William Searle and Charles William Vickers, The Law Of Succession: Testamentary And Intestate. (The Lawbook Exchange, Ltd., 2004). Kerridge, Roger, Parry and Kerridge: The Law of Succession. (Sweet & Maxwell, 2009). Knight, Julia, Wills, Probate, & Inheritance Tax For Dummies. (John Wiley & Sons, 2011) Lawpack Publishing Limited, ‘How to obtain Grant of probate and Administer an Estate’ [2011] (Uploads) accessed 12 May 2013. Law Society, ‘Barrett v Bem [2012] EWCA Civ 52’ [2012] (Upload) accessed 12 May 2013. Law Society, ‘Fulton v Kee [1961] NI 1’ [2012] (Upload) accessed 12 May 2013. St John's Chambers , ‘Wightman v Rynette-James [1976] 1 WLR 161, 168B’ [2012] (Upload) < http://www.stjohnschambers.co.uk/wp-content/uploads/2012/10/When-will-rectification-save-a-will-that-is-otherwise-invalid.pdf> accessed 12 May 2013. Sydney Mitchell LLP, ‘When A Gift Cannot Be Made, What Happens?’ [2013] (Uploads) accessed 12 May 2013. Read More