The Law of Succession

By Richard Hedlund

The law of succession is a rich and vibrant subject which has been attracting more legal and academic attention in recent years.With the introduction of the SQE, the subject, which incorporates Wills and Intestacy, Probate and Administration, and Taxation, is likely to grow further in importance and popularity amongst law students.

This textbook is designed to meet the needs of students studying on the LLB, GDL or SQE by introducing them to succession law in a clear and succinct manner, whilst at the same time highlighting the many topics which are controversial and may be in need of reform. The textbook also explains key practical points, such as will drafting, applying for a grant of probate, and calculating inheritance tax.

To aid learning, practical examples are provided, along with an in-depth look at some key cases.

This new edition of The Law of Succession has been fully revised and updated and includes:

• new and expanded sections on will formalities, duties of personal representatives and remedies for breach of duty by a personal representative
• coverage of Covid-19-specific changes to will-making
• wide-ranging procedural changes to the probate process introduced in November 2020

• Language: English
• Publisher: H&S
• Release date: May 31, 2021
• ISBN: 9781838166427

Book preview

THE LAW OF SUCCESSION

Hall and Stott Publishing Ltd

27 Witney Close

Saltford

BS31 3DX

© Richard Hedlund 2021

The moral rights of the author have been asserted

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior written permission of the copyright holder, application for which should be addressed to the publisher, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organisation.

Contains public sector information licensed under the Open Government Licence v3.0.

British Library Cataloguing in Publication Data

ISBN 978 1 9162431 9 4

Typeset by Style Photosetting Ltd, Mayfield, East Sussex

PREFACE

I’m very grateful for the positive reception given to the first edition of The Law of Succession when it was published in 2019, and it has been a great pleasure to update the book for this second edition. This edition includes a variety of new sections as well as updates to the law throughout. Amongst the many developments in succession law that have happened in the past few years are the responses to Covid-19 (Chapter 3) and the reforms to probate procedures introduced in November 2020 (Chapter 11).

Again, I want to thank Martyn Heathcote for his continued support and assistance in updating the textbook. Any errors, of course, are mine.

The law is correct as of 15 March 2021. However, Chapter 10 (Taxation) has been written based on the 2021/22 tax code, as announced in the Budget in March 2021.

Richard Hedlund

Lincoln

CONTENTS

Preface

Table of Cases

Table of Legislation

Abbreviations

1 Introduction

1.1 What is succession law?

1.2 Key terms in succession law

1.3 Key sources in English succession law

1.4 The historical development of English succession law

1.4.1 Succession of real property prior to the Wills Act 1837

1.4.2 Succession of personal property prior to the Wills Act 1837

1.4.3 Development of succession law from 1837

1.4.4 Future reform of succession law

1.5 International aspects of succession law

2 Testamentary Intention and Capacity

2.1 Age

2.2 Testamentary capacity

2.2.1 Delusions: the original test for testamentary capacity

2.2.2 Banks v Goodfellow: the current test for testamentary capacity

2.2.3 Time: when does the testator need to have testamentary capacity?

2.2.4 Burden of proof: proving testamentary capacity

2.3 The Mental Capacity Act 2005

2.4 Knowing and approving

2.5 Testamentary intention

2.5.1 Undue influence

2.5.2 Testamentary fraud

2.5.3 Forgery

2.6 Further reading

3 Formality Requirements for a Valid Will

3.1 Wills Act 1837, s 9

3.1.1 The will has to be in writing (s 9(a))

3.1.2 The testator must sign the will (s 9(a))

3.1.3 The testator must intend that their signature gives effect to the will (s 9(b))

3.1.4 The testator signs or acknowledges their signature in the presence of two or more witnesses, present at the same time (s 9(c))

3.1.5 Each witness must attest and sign the will or acknowledge their signature in the presence of the testator, but not necessarily in each other’s presence (s 9(d))

3.1.6 Specific amendments to s 9 brought in during the Covid-19 pandemic

3.2 The presumption of due execution

3.3 Reform of s 9 of the Wills Act 1837

3.3.1 Dispensing power

3.3.2 Electronic wills

3.4 Exceptions to the formality requirements

3.4.1 Privileged wills (Wills Act 1837, s 11)

3.4.2 Donatio mortis causa

3.4.3 Secret trusts

3.4.4 Implied trusts and proprietary estoppel

3.5 Further reading

4 Example of a Will

4.1 Example will

4.2 Discussion of the will clauses

4.2.1 Preamble

4.2.2 Clause 1

4.2.3 Clause 2

4.2.4 Clause 3

4.2.5 Clause 4

4.2.6 Clause 5

4.2.7 Clause 6

4.2.8 Clause 7

4.2.9 Clause 8

4.2.10 Attestation clause

4.3 Further reading

5 Rectification and Construction of a Will

5.1 Rectification

5.1.1 Clerical error

5.1.2 Failure to understand instructions

5.1.3 Construction instead of rectification

5.2 Construction

5.2.1 Basic principles of construction

5.2.2 Dual interpretations

5.2.3 Interpretation of specific words

5.2.4 Class gifts and the class-closing rules

5.2.5 Absolute gifts, contingent gifts or life interests

5.2.6 The date a will speaks from

5.2.7 AJA 1982, s 21

5.2.8 Drawing construction and rectification together

5.3 Further reading

6 Amending Wills, Revoking Wills, Reviving Wills and the Failure of Gifts

6.1 Amending a will

6.1.1 How to make changes

6.1.2 Example of a will with changes included

6.1.3 Changes made before a will is executed

6.2 Revoking a will

6.2.1 Revocation by a later will

6.2.2 Revocation by a document executed in accordance with s 9

6.2.3 Revocation by intentional destruction

6.2.4 Conditional revocation

6.3 Revocation by marriage

6.4 Revival

6.5 Failure of gifts

6.5.1 Failure under s 15 of the Wills Act 1837

6.5.2 Failure due to divorce or dissolution of a civil partnership

6.5.3 Lapse

6.5.4 Failure of a gift – no entitlement to dispose of property through a will

6.5.5 Ademption

6.5.6 Abatement

6.5.7 Void for uncertainty

6.5.8 Void for breaching the perpetuity rule

6.5.9 Forfeiture Act 1982

6.5.10 Void for being a capricious gift

6.6 Further reading

7 Mutual Wills

7.1 The requirements for a mutual will

7.1.1 There has to be an agreement between the testators

7.1.2 The parties have to intend the agreement to be binding

7.1.3 The effect of the first testator’s death

7.2 Problems with mutual wills

7.3 Further reading

8 Intestacy

8.1 Definitions: total and partial intestacy

8.2 Administration of intestate estates

8.3 The statutory beneficiaries

8.3.1 The rights of a surviving spouse or civil partner

8.3.2 Entitlement on intestacy if the deceased does not leave a spouse or civil partner

8.4 Further reading

9 Personal Representatives

9.1 Two types of personal representatives

9.2 Executors

9.2.1 Appointment

9.2.2 Eligibility to be an executor

9.2.3 Accepting the office of executor after the testator has died

9.3 Administrators

9.3.1 Order of priority for letters of administration with the will annexed

9.3.2 Disputes over the order of priority for administration with the will annexed

9.3.3 Order of priority for simple administration

9.4 Chain of executors and administration de bonis non

9.5 Passing over a PR

9.6 Further reading

10 Taxation

10.1 Tax and the PR’s duty to pay it

10.2 Income tax

10.2.1 The general income tax rates

10.2.2 Income tax on savings

10.2.3 Income tax on dividends

10.2.4 Relevance to a PR

10.2.5 Relevance to a trustee

10.3 Capital gains tax

10.3.1 Relevance to a PR

10.4 Inheritance tax

10.4.1 Step one: value the estate

10.4.2 Steps two and three: deduct any exemptions and reliefs from the value

10.4.3 Step four: calculate the cumulative total by considering PETs and LCTs

10.4.4 Step five: calculate IHT

10.5 Paying IHT

10.6 Further reading

11 Administration I – The Grant

11.1 Events following death

11.2 Estates exempt from a grant of probate or administration

11.3 Grant of probate or letters of administration

11.3.1 Types of grant

11.3.2 Applying for a grant

11.3.3 Authority to make a grant

11.3.4 Common form and solemn form probate

11.3.5 General and limited grants

11.3.6 When property vests – liability for acts done before a grant is issued

11.4 Obtaining the grant

11.4.1 Caveats

11.4.2 When can a grant be applied for?

11.4.3 The probate application form

11.4.4 The old statement of truth (oath)

11.4.5 Additional documents

11.4.6 Removing words from the will

11.4.7 Fees

11.5 Revoking a grant

11.5.1 The legal position of third parties where a grant is revoked

11.6 Further reading

12 Administration II – Calling in and Managing the Estate

12.1 Obtaining legal title

12.1.1 The estate devolves on the PR

12.1.2 Property that does not devolve on the PR

12.1.3 Other rights and entitlements that devolve on the PR

12.2 Collecting in the estate

12.2.1 Collecting in assets

12.2.2 Calling in debts

12.3 Realising the estate

12.4 Managing the estate

12.4.1 Obtaining legal title and administering the estate assets

12.4.2 Duty to inventory the estate

12.4.3 Duty to account

13 Administration III – Paying Debts

13.1 Debts

13.2 Solvent and insolvent estates

13.3 Assets

13.4 The PR’s duty to pay debts

13.5 Administrative debts

13.5.1 Funeral costs

13.5.2 Administration costs

13.6 Payment of debts in solvent estates

13.6.1 Property subject to a charge

13.6.2 Marshalling

13.7 Payment of debts in insolvent estates

13.7.1 Insolvency administration order

13.7.2 Order of payment in an insolvent estate

13.7.3 Funeral costs and administration expenses

13.7.4 Secured debts

13.7.5 Specially preferred debts

13.7.6 Preferential debts

13.7.7 Ordinary debts

13.7.8 Interest on preferential and ordinary debts

13.7.9 Deferred debts

13.7.10 Duty to follow the statutory order of payment

14 Administration IV – Distribution

14.1 Distribution

14.2 Assents

14.3 Types of gifts

14.3.1 Specific gifts

14.3.2 General gifts

14.3.3 Pecuniary gifts

14.3.4 Demonstrative legacies

14.3.5 Ademption and abatement

14.3.6 Residue

14.4 When does the PR become a testamentary trustee?

15 The Family Provision Rule

15.1 Testamentary freedom

15.2 The Inheritance Act

15.2.1 The deceased’s domicile

15.2.2 Who can make an Inheritance Act application?

15.2.3 What court should the application be made in?

15.2.4 What is meant by reasonable financial provision?

15.2.5 How do the courts determine whether to make an award?

15.2.6 Time limits for making an application

15.2.7 What orders can the court make?

15.2.8 What property is available for an order?

15.3 Inheritance Act process

15.4 Inheritance Act case law

15.5 Further reading

16 Remedies

16.1 Duties of solicitors and will-drafters

16.1.1 Duty to act within a reasonable time

16.1.2 Duty to ensure the will reflects the client’s instructions

16.1.3 Duty to give advice on execution

16.1.4 Duty to provide information

16.2 Non-contentious probate

16.3 Contentious probate – challenges to a will

16.4 Contentious probate – administration claims

16.4.1 PR or trustee?

16.4.2 Right to seek guidance from the court

16.4.3 Removing and replacing a PR under the AJA 1985, s 50 or the inherent jurisdiction

16.4.4 Devastavit

16.5 Defences available to the PR

16.5.1 Section 27 notice

16.5.2 Benjamin orders

16.5.3 Missing beneficiary insurance

16.5.4 Trustee Act 1925, s 61

16.5.5 Trustee Act 1925, s 62

16.5.6 Limitation Act 1980, s 22

16.5.7 Limitation Act 1980, s 21(3)

16.5.8 Administration complete

16.6 Executor de son tort

16.7 Criminal liability for fraud

16.8 Further reading

Index

TABLE OF CASES

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

R

S

T

U

V

W

Y

TABLE OF LEGISLATION

Administration of Estates Act 1925 2, 3, 7, 9, 136, 231, 237

s 1 202

s 5 151

s 7 156

s 7(3) 157

s 9 201

s 9(1)–(3) 190

s 25 196, 206, 226

s 25(a) 206

s 25(b) 206, 209

s 25(c) 206

s 27(1) 200

s 27(2) 199

s 28 272

s 32(1) 214

s 33 205, 232

s 33(1) 134, 231

s 33(2) 134, 231, 232, 233, 234

s 33(7) 232

s 34(3) 121, 219, 221, 232, 233, 234, 235

s 35(1) 221

s 36 205, 228

s 36(1) 227

s 36(4) 228

s 36(6) 228

s 37 199, 200

s 39 205

s 41 138, 139

s 44 227, 268

s 46 133, 134, 135, 138, 139, 140, 141, 144, 145, 152, 193

s 46(1)(i)(1) 136

s 46(1)(i)(2) 136

s 46(1)(i)(2)(A) 136

s 46(1)(i)(2)(B), (C) 137

s 46(1)(ii) 140

s 46(1)(iii), (iv) 143

s 46(1)(v) 143, 144

s 46(1)(vi) 144

s 46(2A) 139, 155

s 46A 126

s 47 140

s 47(1)(iv) 141

s 49 134

s 55 199

s 55(1)(x) 136

Sch 1, Pt II 121, 219, 232, 233, 234, 235

Sch 1A 137

Administration of Estates Act 1925 (Fixed Net Sum) Order 2020 136, 137

Administration of Estates Act 1971

s 10(2) 226

Administration of Estates (Small Payments) Act 1965 185

Administration of Insolvent Estates of Deceased Persons Order 1986 121, 222, 223

Administration of Justice Act 1982 7, 40, 42, 111

s 20 77, 78, 81, 97

s 20(1) 78, 79

s 20(2), (3) 78

s 21 77, 82, 84, 85, 89, 90, 95, 97, 231

s 21(1)(b) 96, 97

s 21(1)(c) 95

s 21(2) 96

s 22 93

Administration of Justice Act 1985

s 48 265

s 50 149, 264, 265

s 50(1) 265

s 50(4) 265

Adoption and Children Act 2002

s 67 88, 141

s 67(6)(a) 88

Births and Deaths Registration Act 1953 143

s 16 184

s 17 184

Civil Partnership Act 2004

s 49 135

s 50 135

Civil Procedure Rules 1998

r 57.7(1) 188, 263

r 57.15 243

Companies Act 2006

s 385 172

Contracts (Rights of Third Parties) Act 1999 203

Coroners and Justice Act 2009 184

Court of Probate Act 1857 8, 9

Courts and Legal Services Act 1990

s 58A(6) 251

Enterprise Act 2002 225

Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Act 2011 126

European Convention on Human Rights

Article 8 140

Article 14 140

Family Law Reform Act 1987

s 18 141

s 18(2) 143

s 18(2ZA) 143

s 19 88

Forfeiture Act 1982 114, 124, 126, 254

s 1 124

s 2 124

s 2(2) 124

s 2(3) 124, 254

s 3 254

s 5 124

Fraud Act 2006

s 1–4 37, 272

Friendly Societies Act 1974

s 59 224

Human Fertilisation and Embryology Act 1990 88, 141

Human Fertilisation and Embryology Act 2008 88, 141

s 33 88, 141

Income Tax Act 2007 163

s 6 163

s 10 163

s 491 165

Income Tax (Earnings and Pensions) Act 2003

s 62 163

Income Tax (Trading and Other Income) Act 2005

s 649ff 165

Inheritance and Trustees’ Powers Act 2014 136, 137

Inheritance (Family Provision) Act 1938 239

Inheritance (Provision for Family and Dependants) Act 1975 72, 96, 140, 144, 188, 239, 241, 253, 254

s 1 242, 249

s 1(1)(a)–(e) 242

s 1(1A) 243, 244

s 1(1B) 243, 244

s 1(2) 245

s 1(2)(a)–(b) 244

s 1(3) 242

s 2 249, 250, 251

s 2(1) 250

s 3 245, 246, 247, 249, 257

s 3(1) 246

s 3(1)(a), (b) 246

s 3(1)(c) 246, 256

s 3(1)(d)–(g) 246

s 3(2) 246, 247

s 3(2A) 246

s 3(3)–(6) 247

s 4 248, 249

s 5 249

s 8 251

s 9 252

s 9(1A) 252

s 20 248

s 25(1) 251

Inheritance Tax Act 1984 169

s 7 176

s 8A 177

s 8D 176

s 18 172

s 19 173

s 20 173

s 21 173

s 22 174

s 22(2) 174

s 23 174

s 24 172

s 25 172

s 104 172

s 116 172

s 154 172

s 160 170, 171

s 161 170, 171

s 162 171

s 172 171

Sch 1 176

Sch 1A 176

Sch 3 172

Insolvency Act 1986

s 231 121

s 264 222

s 264(1)(c) 224

ss 265–271 222

s 276 224

s 285(4) 224

s 322 223

s 328(1B) 225

s 328(3) 225

s 328(4), (5) 226

s 329 226

s 339 223

s 341 223

s 342 223

s 382 223

s 386 225

s 421A 223

s 421A(3) 223

ss 423–425 215

Sch 6 224

Sch 6, paras 15BA, 15BB 225

Sch 6, para 15D 225

Insolvency Proceedings (Monetary Limits) Order 1986

art 4 225

Intestates’ Estates Act 1952 138

Sch 2, para 1 138

Sch 2, para 1(2) 138

Sch 2, para 2 138

Sch 2, para 3(2) 138

Judgments Act 1938

s 17 226

Law of Property Act 1925 9

s 1 229

s 1(1) 138

s 1(6) 16, 118

s 36(2) 119

s 53(1) 60

s 177 111

s 184 86

s 204(1) 199

s 205 200

Law of Property (Miscellaneous Provisions) Act 1989

s 2(1) 129

Law Reform (Miscellaneous Provisions) Act 1934

s 1 202

Law Reform (Succession) Act 1995 116

s 1 139

Limitation Act 1980

s 5 266

s 6 266

s 21(3) 270

s 22 270

s 22(1), (2) 270

Matrimonial Causes Act 1973

s 11 110, 135

s 12 110, 135

Mental Capacity Act 2005 18, 30, 31, 32, 38, 120, 150, 193, 194

s 1(2) 31

s 2 30

s 3 30, 31

s 3(4) 31, 32

Non-Contentious Probate Fees Order 2004

Sch 1, para 1 197

Non-Contentious Probate Rules 1987 7, 44, 157

r 4 192

r 5 193

r 5ZA 193

r 6 192

r 8

r 10 45

r 12 196

r 12(1) 44

r 12(2)