When making a Will it is essential to have the legal and mental ability to understand the document and its effect. Without this, a Will is invalid and cannot be used. In the absence of any other Will, the estate would then pass under the Rules of Intestacy.
A survey of family solicitors carried out by insurer Direct Line found that lack of testamentary capacity was a common cause of a successful challenge to a Will’s validity.
We look at the legal requirements to satisfy this requirement.
The criteria for testamentary capacity
The person making the Will must firstly understand the nature of making a Will and its effects.
Secondly, they need to understand the extent of the property of which they are disposing.
Thirdly, they need to be able to understand and appreciate the moral claims that people may have on their estate, for example those who they support or those who have been promised something and who may have acted on that promise to their detriment.
Finally, they need to have no disorder of the mind that prevents them understanding what is right or stops them exercising their natural faculties.
When testamentary capacity is challenged
If testamentary capacity is challenged in court, then evidence would be needed from witnesses who could attest to the deceased’s mental capabilities as well as their ability to understand the Will and the claims others might have on their estate.
Expert witnesses could be called, such as doctors, who may have known the deceased at the time the Will was written.
The court will also look at anything the deceased may have said with regard to distribution of their estate.
Avoiding a legal challenge for lack of capacity
Court action can be lengthy and expensive for all involved. It is worth taking the time and trouble to put a valid Will in place before there are any doubts as to testamentary capacity.
If a Will is drafted professionally, then the Will writer will take the time to discuss matters thoroughly with you and make their own assessment of your capacity. They can make filenotes, to be kept at their offices in case they are ever needed, confirming their belief that you were capable of making a valid Will.
If the case ever came to court, they would be able to give evidence as an experienced Will writer that in their assessment you had testamentary capacity.
Should they believe that a case is borderline, they may also ask for a medical professional to become involved to provide additional evidence.
If you would like to talk to one of our expert Wills lawyers, call us on 01243 216900 or email us at firstname.lastname@example.org.
When the owner of a business dies, probate can be lengthy and complicated as their business assets have to be valued and transferred.
Whether business assets are sold or transferred depends on the way in which the business was owned and operated as well as the wishes of the deceased.
The estate’s executor or administrator will need to obtain a Grant of Probate or Letters of Administration enabling them to deal with the business.
Sole trading and probate
If the deceased was a sole trader, then their finances and assets are simply treated as part of the estate.
Business partnerships and probate
Where the deceased was in a partnership, there would normally be a partnership agreement giving details of each partner’s contributions and liabilities. It should also set out what is to happen in the event of the death of a partner.
The deceased’s estate will be liable for any debts or a share of partnership profits. Separating the estate from the partnership may well be complex and an executor or administrator should take independent legal advice on behalf of the estate.
Companies and probate
Where the deceased owned shares in a company, the company’s Articles of Association will govern how shares can be sold and/or transferred, for example if first refusal must be given to company directors.
The executor or administrator will need to contact the company secretary and arrange for valuation of the deceased’s shareholding.
It may be that the business will need to be sold or shut down. If there are redundancies, there may be liability to make payments.
If it is advantageous to keep the business running while a buyer is sought, then someone needs to be appointed to do that. If there are other owners or partners, then liaising with them will be essential.
As well as dealing with probate, the executor or administrator may also find themselves having to deal with questions of employment law, company law, property law and insolvency.
For this reason, it is highly recommended that when the deceased owned a business, professional legal help is sought.
If errors are made during the administration of an estate, executors or administrators may be held personally liable.
If you would like expert help in dealing with a probate matter, call us on 01243 216900 or email us at email@example.com.
The continuing rise in numbers of contested Wills is being attributed to more and more people attempting to write their own Will.
The number of cases heard by the High Court went up from 227 in 2016 to 282 in 2017 and 368 in 2018.
Drafting a Will
Drawing up a valid Will can be a complicated undertaking. Matters to be considered include whether to leave beneficiaries lump sum gifts or a percentage of the estate, who will inherit first if your estate is smaller than expected, how to ensure first and second families are both provided for, even if you die before your new spouse and how to minimise Inheritance Tax liabilities.
A small error made in drafting a Will can mean that it is invalid. If this happens, then there is a risk that the estate will pass under the rules of intestacy. This details which relatives will receive the estate and in what proportions. Unmarried partners and stepchildren do not inherit anything under the rules.
Why a Will might be challenged
If the wording of a Will is ambiguous or the wrong terminology is used, there may be an opportunity for someone to challenge it in court. Even the incorrect execution of a Will by the signatory and witnesses can mean that a Will is invalid. Mistakes are easy to make in this complicated area, with the risk that will result in a long and expensive court case.
What happens if a Will is challenged
Dealing with a death can be difficult and when family members feel that they have not been left what they felt they were entitled to, problems can arise. When emotions run high, if there is ambiguity or an error in the Will, then they may take the opportunity to bring a legal case. These can take years to resolve and are likely to be expensive. Saving a few pounds now by drafting your own Will can result in the loss of thousands later on if the Will is proved to be invalid or ambiguous.
Why a professionally drafted Will is always recommended
Speaking to an expert Will writer allows you the opportunity to explain exactly what you would like to happen to your estate. If, for example, you have remarried and you would like your spouse to live in your home after your death, but ultimately want it to pass to your children, a professional will be able to explain to you how this can be done and draw up a Will that you can have confidence in.
They will be able to help you avoid pitfalls, such as leaving cash gifts that might reduce your residuary estate far lower than you anticipate and will be able to translate your wishes into a legally binding Will. When a Will has been clearly thought out and well drafted, it significantly reduces the risk that your family will start to wonder if it was exactly what you meant to do.
To speak to one of our expert Wills lawyers, call us on 01243 216900 or email us at firstname.lastname@example.org.
When someone dies leaving a Will that creates a Trust, it can have implications for the person dealing with the administration of the estate.
A Will may leave property or assets to a Trust so that an individual may benefit from them during their lifetime without actually owning them. For example, the deceased may have wanted their partner to be able to continue to live in their home, but might want it to pass eventually to children. Or they may want to leave money to children for their maintenance and education.
Estate administration and Will Trusts
The need to set up a Will Trust doesn’t alter the need for an executor to obtain probate. In some cases, where the assets fall below a certain threshold, probate might not be required.
Setting up a Will Trust
The executor is responsible for creating the Will Trust. They will ensure that assets are properly transferred to the trust and that the trustees named in the Will have access to them and are aware of their obligations under the terms of the Will.
Once the assets have been transferred, the trustees will be responsible for looking after them and distributing them to the beneficiaries as specified.
Types of Will Trust
A Life Interest Trust gives a beneficiary the right to benefit from an asset during their lifetime. This could include maintenance payments or living in a property. Once the beneficiary has died, the assets pass in accordance with the terms of the original Will.
A Discretionary Trust gives the trustees the right to distribute funds to named beneficiaries as they see fit. For example, there may be a request to fund education or provide a lump sum towards the purchase of a home.
Money held in Trust for a Minor will be looked after by the trustees until the child reaches the age specified in the Will. This doesn’t have to be 18 – it may be 21 or 25 or even older if the deceased wished.
A Nil Rate Band Trust may have been included in a Will as part of Inheritance Tax (IHT) planning. While it is no longer a requirement, older Wills may still contain this type of trust, which transfers assets amounting to the maximum sum the deceased could give under a Will without being liable for IHT.
Help with Will drafting and administration
Creating a valid Will that does exactly what you want and makes the best use of assets in the light of IHT and other considerations can be complicated.
Dealing with the administration of a Will and setting up of a Will Trust may also have tax implications. Obtaining professional advice means that you can be sure that assets are maximised.
To speak to one of our expert probate lawyers at legalmatters, call us on 01243 216900 or email us at email@example.com.