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#16662 - Content Of Will - Private Client

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CONTENT OF WILL

General Principles of Will Construction

  • When the court construes a will, it is attempting to discover T’s intention, BUT the court will only do this from the words in the will.

  • Golden rule: court will attempt to read a will so as to lead to testacy, not intestacy.

  • Words and phrases are, at first, given their ordinary grammatical meaning.

  • Certain words have more than one ordinary meaning, e.g. money – Perrin v Morgan [1943]: includes cash, money in bank, debts owed to T, stocks, etc.

  • The court cannot rewrite the will and does not guess – general rule is that only the words of the will can be considered.

  • However, in certain circumstances, extrinsic evidence from outside the will can be admitted – s.21 AJA 1982
three situations:

  1. Insofar as any part of the will is meaningless

  2. Insofar as language used is ambiguous

  3. Insofar as evidence, other than evidence of T’s intention, shows that language used is ambiguous in light of surrounding circumstances
Commencement Purpose is to identify T’s full name and address – if T uses another name, this should be included here
Revocation Clause Should be included for avoidance of doubt
Disposal of Body Direction only – not binding on executors as no property in a human body
Date Either at the commencement or at the end of the will
Attestation Clause

  • Should always be present in a professionally drawn will

  • Shows that s.9 Wills Act 1837 has been satisfied

  • Can use short form or long form

  • Need to amend if T is e.g. blind or illiterate

Appointment of Executors, Trustees and Guardians

  • Will must appoint persons to administer the estate and to act as trustees of any trust set up by the will

  • Should appoint at least but not more than four – no more than four persons can take out a grant of probate:

    • Individuals – friends and relatives have personal knowledge of T but may lack expertise (should ideally be younger than T)

    • Professionals advisers either individually or as a firm (usual choice) – have expertise but will charge for dealing with estate

    • Trust corporation – will usually instruct solicitors anyway and expensive

    • Public trustee – last resort

  • A testator/testatrix with minor children should consider appointing a guardian
Types of Disposition Examples:
Specific Gifts

  • A gift of a specific, identifiable item of property

  • S.24 WA 1837: a will speaks from death as regards property unless a contrary intention is shown – the use of the word ‘my’ or any other word/phrase indicating ownership at the date of the will shows a contrary intention

  • Doctrine of ademption: if property sold/destroyed/changed in substance, beneficiary receives nothing

  • Gift to a number of beneficiaries with power to select: include order of selection, time limit, and procedure for resolving disputes

  • Specific beneficiaries bear costs themselves in absence of any provision to the contract

  • Consider mortgages (s.35 AEA 1925), tax, and risk of ademption

  • a gift of my gold Rolex watch to A

  • a gift of my 5,000 shares in ABC plc to B

  • a gift of 10,000 to C to be paid out of my account with Barclays Bank (demonstrative)
General or Pecuniary Legacies

  • A gift of property not distinguished in any way from property of the same kind

  • S.55(1)(ix) AEA 1925: pecuniary legacy = “an annuity, a general legacy, a demonstrative legacy so far as it is not discharged out of the designated property, and any other general direction by a testator for the payment of money, including all death duties free from which any devise, bequest, or payment is made to take effect”

  • a gift of 10,000 to A

  • a gift of 5,000 shares in ABC plc to B

  • a gift of 10,000 to C to be paid out of my account with Barclays Bank (demonstrative)
Gifts of Residue

  • A residuary gift should always be included to avoid the possibility of a partial intestacy – should:

    • Provide for payment of debts and pecuniary legacies

    • Consider use of a survivorship clause

    • Consider use of substitutional gifts

  • Trust may be required

“I GIVE the sum of FIVE THOUSAND POUNDS (5,000) to each of the charities which I may name in a list to be found with my will”

A list of charities was found with the will. Are the charities named in the list entitled to the legacy mentioned in the will?

  • For a document to be effectively incorporated into a will, three conditions need to be complied with:

    1. the document must be in existence when the will is executed

    2. the document must be referred to in the will as being in existence

    3. the document must be identified by the will

  • The list of charities thus fails to be incorporated as the clause does not refer to the list as being in existence at the date of the will.
Administrative Provisions – statutory provisions contained in AEA 1925 Examples:

Common Extensions to
Powers of Personal Representatives

 Power to appropriate assets without consent of beneficiary – s.41 AEA 1925

Amending s.41:

  • Remove need for trustees to get consent
    STEP general provision 4.15 does this

  • STEP special provision 22: executors could appropriate within 3 years of death at death value

Jane’s will leaves her personal chattels to her 2 children equally. There is a diamond necklace worth 20,000 and a car worth 20,000.

  • Power of appropriation enables executors to give the car to one child and the necklace to the other

  • S.41 AEA 1925 requires the value to be assessed at the date of appropriation and needs beneficiaries to agree
Power to accept receipts on behalf of minors

  • S.42 AEA 1925: “Where an infant is absolutely entitled under the will or on the intestacy of a person … (‘the deceased’) … the personal representatives of the deceased may appoint a trust corporation or two or more individuals not exceeding four … to be the trustee or trustees … for the infant

  • S.21 LPA 1925: “A married infant shall have power to give valid receipts for all income … to which the infant may be entitled in like manner as if the infant were of full age.”

  • Infant = minor (under 18)

Gordon’s will leaves a legacy of 500 to his godchild, Miranda, who is 5. Do the PRs have to sit on the 500 until Miranda reaches the age of 18?

  • PRs have power under s.42 AEA 1925 to appoint trustees to hold legacy

  • Can confer a power to enable PRs to pay the money to a parent/guardian for child and accept their receipt
    OR pay the child if 16+
Power to carry on a business

  • Should authorise the PRs to run the business for as long as they think fit and to use business assets as they think fit

Common Extensions to

Powers of Trustees

 Power to invest

  • Wide investment powers in Part II TA 2000

    • s.4 – consider suitability and diversification

    • s.5 – take advice from a competent person “unless they decide this is inappropriate or unnecessary in the circumstances”

  • Expand investment powers

    • common to expand to enable widest possible investment, including in foreign and non-income-producing assets

    • extend power to purchase a property for investment or occupation to include power to purchase/improve property and to impose conditions regarding occupation
Power to purchase a house

  • S.8 TA 2000 – power to buy freehold/leasehold property for occupation by a beneficiary

  • Extension only needed if further powers are required
Power of advancement

S.32 TA 1925

  • Consider excluding some or all of the limitations imposed by s.32

  • Gives no power to made advancements or loans to life tenants
Power of maintenance

S.31 TA 1925

  • Consider giving trustees an unfettered discretion, and removing right for contingent beneficiary to receive income at age 18

Additional Drafting Considerations

 Charging clause

  • Only if a professional adviser is appointed

  • ss.28 & 29 TA 2000 – allows trustees to charge reasonable remuneration where:

    • they are professional trustees and not the sole trustee, AND

    • they have the written consent of all co-trustees

a trust corporation can charge reasonable fees

  • Extend charging clause:

    • perhaps extend to cover any professional or business person and/or remove the reasonableness limitation

    • “Any Trustee who is engaged in a profession or business...
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