Legal Advices Concerning Inheritance Law - Assignment Example

LAW IN ACTION Question 1: Legal advice to Juliet about her inheritance: Dear Juliet, RE: RESPONDING TO YOUR INQUIRY INTO INHERITENCE LAW This is with reference to your visit with us on 1st January, 2010. You had sought assistance from our service for issues concerning inheritance and question of will. We had a detailed meeting last time with you and from our discussion in that meeting we have defined following three scenarios upon which you were seeking our advice: 1- Who would inherit your property if you die whilst still married to Romeo? 2- Who would inherit your property if you die after divorcing Romeo and the matrimonial home has now been transferred into your sole name, whilst the flat has been transferred into Romeo’s name? 3- If anyone, may be entitled to make a claim against your estate. You have provided details that your possible heirs would be Romeo, your husband, if not divorced, Collin, your son and one child you had given up from adoption and no information about his whereabouts is currently available. Total belongings you have are one matrimonial home worth £ 250.000 with a mortgage amount £120,000 jointly owned by you and your husband. You have a flat worth £ 105,000 in your sole name without any mortgage and jewelry worth £12,000. Your earning from the flat rent is £250. Considering the scenario one where it is assumed that neither have you had a will nor you have divorced your husband, according to law of England and Wales1, your husband is entitled to all of your property if it is less than £125,000. In case it is more than this amount he will inherit up to £125,000 and on rest of property and goods and a life interest in half the remainder balance to the children. We had calculated worth of your property as under: Matrimonial home: £ 250,000 Mortgage amount: (£ 120,000). Balance: £ 130,000 Your share: 30,000/2= £ 65,000---i Jewelry: £ 12,000---ii Flat: £ 105,000---iii Total inheritance: £ 182,000 Here we find that in this case where you are still in marriage with your husband and do not have a will, on your demise, if your husband survives 28 days after your departure, he will inherit a lion’s share of £ 125,000 along with the life interest on the remainder. Rest will be inherited by your children. You have two children. One is Collin, who lives with you and is a legal claimant of your estate. About the other, we do not have any information as you have give him up for adoption. It is a well settled principle of law of adoption that a decree of adoption ends all the relationships of that child with his or her biological parents, hence, he or she does not inherits from biological parents. In your case too, we find the applicability of the same principle. Now in our opinion as a child, Collin is your only legal heir. However, if you desire to make a will in favor of your child you have given up for adoption, you have all the rights to do so. Considering the second scenario, where you are considering divorcing your husband with a deal of exchanging property. You have proposed that you wish to have your matrimonial home in your name as sole owner in lieu of flat you own. Flat is solely owned by you whereas matrimonial apartment is jointly owned by you and your husband. This matrimonial apartment has a mortgage liability of £ 120,000 right at the moment. It is not clear that whether you would like to exchange your flat with the matrimonial apartment with charge of mortgage or would like to force your husband to share this liability with you. We have, however, discussed below both the situations. With this option one where you acquire property with liability to pay off the amount of mortgage, the value of your property will be as under: Matrimonial home’s worth: £ 250,000 Mortgage: (£ 120,000). Balance: £ 130,000 Jewelry: £ 12,000 Total inheritance: £ 142,000 Now in such a case, your ex-husband will not have any claim over your inheritance and the whole inheritance will go to your children. However, if in case you both decide to share the liability of mortgage on matrimonial home equally, your total inheritance will be increased by an amount of £ 60,000 and net balance will be £ 202,000 available as inheritance to your children. Considering third scenario narrated above, if anyone else would be entitled to claim your property, your possible successors are Romeo, your husband, Collin, your son, and one child you have given up for adoption. We in above given scenarios have assumed that none else is eligible to be your successor in term of inheritance, because law of inheritance moves in a very logical way of whole blood line. In presence of spouse, first right to inherit rest in him or her and as per law of land, any estates below £ 125,000 (after paying off all the liabilities and coffin expenses) goes to the spouse. If this amount exceeds the said limit next comes the children and the entire remaining amount is to be distributed among the surviving children and in case of death of all or any, share goes to their children, that is, grand children of the deceased. It is evident in your case that in both the scenarios discussed above, you have your direct relations intact and there would no situation that anyone else could claim over your estate. Status of your child you given up for adoption has already been narrated. From: (Signature) Managing Partner, XYZ Law firm, ABC, Street, London ……………………………………………………………………………………………………………………………………………………………………… Question 2 A) Advice Imran about his legal responsibility as a retiring partner from an unlimited partnership: Answer: An unlimited partnership may be defined as, “A business partnership featuring two or more partners in which each partner is liable for any debts taken on by the business. Because the partners do not enjoy limited liability, all the partners' assets can be involved in an insolvency case against the company”2. The analysis of this definition reveals that in an unlimited partnership, all the partners are solely responsible, jointly and severely, for liabilities of the firm and even their private belongings beyond the firm’s equity can also be attached to satisfy any decree against an unlimited partnership. In other words, all partners are liable in this sort of partnership as they would be liable in case of sole proprietorship. Rather, they are even liable for acts of their partners done in good faith and as an agent of the firm. Responsibility of a retiring partner: Here comes the question of responsibility of a retiring partner. Shall a retiring partner be liable for act of partnership? Law provides that every retiring partner should give a notice of his retirement either by general public notice or by letter to his customers to that effect. 3 It is provided that a retiring partner is liable of all acts done during his term of partnership for a period of six months after retirement. It is important to notice that the retiring partner is liable for only those acts which were done during his partnership, meaning he is no more responsible for any ant of firm after his retirement. Here comes the question of liability incurred by the firm. It is stated that remaining partners of the firm accrued the said liability three months ago, that is, three months after the retirement of Imran. If Imran is sued by the company claiming its dues from the firm on the basis of that letter paid used by the remaining partners containing Imran’s name as a partner, the company is eligible in its action to make Imran as one of the defendant in the suit4, however, we have to see whether he has any liability or not, and if he has no liability, what plea should be taken as defense? Plea by a retiring partner in case of liability accrued after his retirement: Imran in our opinion has no liability to pay for any liability incurred after his retirement if there is a due notice of retirement by him and shall take the same plea in his defense. He has nothing to do with any active or non active business of the firm, so he should not be proceeded against. B) Whether conviction for driving while drunk of Mike is a valid ground for his removal from firm or not? Answer: Removal of a partner from a firm is not a sweet will of other partners but is being governed by legal dictums. A partner may be removed from the partner ship, if he is guilty of any of the acts narrated below: 1- Bankruptcy 2- Conviction in felony or confession thereof 3- Commitment of fraud, willful misconduct, breach of fiduciary relationship or negligence in his duties under agreement of partnership 4- Made personal use of partnership property and assets and breached the trust 5- Failed to provide all documents and record in relationship of partnership, he is required to provide.5 In the case of Mike who is convicted for driving whilst under the influences of alcohol does not seem to be a cogent reason to remove him from the partnership. C) Whether a partner can pursue his own business with the firm? Are there any circumstances in which Carl as a partner would be legally entitled to retain the profits he made from the sale of the fruit boxes? Answer: Carl, being one of the partner is given the responsibility to act as designated buyer of fruit growing related supplies on behalf of the firm and during this course he entered into an agreement to sell fruit storage boxes to the firm, where rest of the partners were unaware of the fact that Carl is acting for his own behind the scene. Carl has secured a lot of profit in this deal, too. Carl being a partner to the firm is responsible toward the firm to render true accounts to the firm. Similarly, unless otherwise provided in the contract of partnership, partners are liable to pay back all benefits and profits earned by using property of the firm, business connection or transactions of the firm’s business6. In case of this partnership, we know that there is no written agreement and in absence of the same all standard provisions of law and rules are applicable to this partnership. Hence, Carl in our opinion has acted against his fiduciary duties against the firm and is liable to refund all the profit so earned to the firm. So far as the conditions under which a partner can be allowed to take profit of a proceed on behalf of the firm is concerned, Carl in this case can be allowed to retain the profit of the sale only, if agreed by all the other partners to it. It is already described that there is another situation when a partner can use partnership for his personal benefit if it is expressly agreed in agreement of partnership by all the partners. Right now, for Carl, there is only one possibility which is waiver by rest of the partners to this effect; otherwise, Carl has to refund all the profit to the firm. D) Possible legal effects of carrying on a business as an unlimited partnership without the aid of a written partnership agreement. Answer: Partnership is a legal agreement between two or more people to carry on business for profit. It might be written or unwritten. In business, parties use to go for written agreements in all their deals including creation of a partnership in order to ensure clarity in their relationship and codification of their intents. This written agreement becomes the reference in all future deals, business and conflicts. As stated earlier, there is no bar on unwritten partnerships but a written partnership has certain advantages which this firm may not enjoy. In a written agreement, partners can spell out their share of duties and responsibilities. In absence of a written contract in case of a firm, law presumes that all the partners are sharing equal responsibility in conducting the affair of the firm whereas in actual this might be a different arrangement. Similarly, there might be an unequal distribution of profits based on actual understanding of the partners which may be disputed. Law assumes that all partners, in absence of any contract to contrary, shall share equal profits. Now, this understanding would be difficult to prove in absence of a written agreement. Likewise, by making a written partnership agreement, partners can spell out authority, management and control of the business, capital contributions and methods of funding the business, profit and loss allocation, salaries of partners, buyouts, and admissions of new partners. Partners are not entitled to salaries in a partnership, but partners in agreement may decide otherwise. Competing business may also be given protection under written agreement. Brian, Dennis, Carl and Al are therefore advised to have their partnership agreement in writing as soon as possible by incorporating all their intents in black and white. Although, this is not a legal requirement but in course of business it is seen that proper agreement secures the parties from many unseen complications and even in case of litigation it establishes the right much easier than to establish a verbal commitment. Bibliography: Administration of Estate Act 1925 General Partnership-definition, retrieved from http://www.investorwords.com/5895/general_partnership.html Scheifflin v. Stevens, 1 Wins. 106. See also Zollar v. Janvrin, 47 N. H. 324. Theophilus Parsons,1893, The Law Of Contracts, University Press: John Wilson And Son, Cambridge, U.S.A, section XI James Robert Brown & Herbert B. Max, 2002, Raising Capital: Private Placement forms & techniques, Edn 3rd vol 1 Partnership Act 1890, section 29(1) Read More