IF THERE IS A WILL

When a person dies it is necessary for someone to wind up that person’s estate, i.e. their money, possessions, property and debts, by collecting what the deceased person owns and is due to him, paying the debts including any inheritance tax and passing anything that remains to those entitled to it.

Who is entitled to wind up the estate depends upon whether or not the deceased has left a valid will or codicil appointing an executor who is still living. A codicil is a document separate from the will but which is similarly signed and completed and which adds to or amends the will. An executor is a person to whom the will or codicil gives the task of carrying out the will.

If it is thought that the deceased left a will or a codicil but it cannot be found amongst his effects please refer to the suggested checks that might be made and the circumstances in which proof of a missing will might be obtained which are set out in the next chapter on pages 78 and 79.

If a document is found it will be necessary to consider:

• whether the deceased had the necessary legal capacity to make a will when he purported to make it;
• whether the requisite formalities were complied with when the will was made;
• whether the will remains valid or whether it has been revoked;
• to what property the will relates; and
• the legal effect of the will.

Deciding what the legal effect of a will is and what it means is dealt with in Chapter 9 pages 119 to 130.

Capacity to make a will

To make a valid will the testator must have valid testamentary capacity. This means that in addition to being over the age of 18 (unless he was seaman at sea, or in the armed forces and on active military service), he must have:

• been able to understand roughly what making a will means, i.e. the nature of the transaction he was entering into;
• been capable of having a rough idea of what he had to leave;
• been aware of those he had a moral obligation to benefit and those he was benefiting in the will; and
• understood in broad terms the effect of the will.

The testator may have had testamentary capacity and been able to make a valid will even though he was of unsound mind and suffering from delusions in some respects, as long as that insanity did not affect the above points, for example he may have good testamentary capacity even though he was convinced that the world was a cube.

The will will not be invalid if the testator became totally insane or otherwise lost his testamentary capacity after making it, as long as he had testamentary capacity at the time it was made. Even if the testator was normally mentally incapable, he would be legally able to make a valid will in any lucid period.

In making the will the testator must have been acting of his own free will and not under duress or the undue influence of any other person.

If the will is rational on the face of it there is a rebutable presumption that the testator had full testamentary capacity and was making it of his own free will.

The formalities for making a valid will

Wills made outside England and Wales

If a will was made outside England and Wales English Law will accept its validity if it is made:

• in accordance with the formalities required by the state where it was made; or
• in accordance with the formalities required by the state where, at the time the will was made or at death, the testator was domiciled or had his habitual residence or of which he was a national.

A will made on a ship or in an aircraft will be treated as validly completed if it was completed in accordance with the law of the country with which the ship or aircraft has the closest connection.

Wills which deal with foreign property

If the will deals with immoveable property such as a holiday villa, it will be recognised as valid by English law if it complies with the formalities required by the law of the state in which the property is situated.

When considering the provisions of a will in respect of any foreign property the testator may have, it is also necessary to consider the foreign law relating to the property and the making of wills, even if the will is made in the United Kingdom. Some states have restrictions in relation to who can inherit property and the tax laws relating to property differ from those of English law. The procedure and formalities for making a will that is to be recognised by the foreign country as a valid document of title to the property are also usually different from those of England and Wales.

Wills made by a member of the armed forces engaged in actual military service or a seaman at sea

If the will is made by a member of the armed forces engaged in actual military service or a seaman at sea no formalities are required to be followed to make, or indeed to revoke, a will; their wills can be made irrespective of age, do not have to be in writing and if written do not need to be witnessed.

Other wills made in England or Wales

If a will made in England or Wales (other than the will of a member of the armed forces engaged in actual military service or a seaman at sea) is to be considered to be a valid will the following formalities must have been complied with:

• the will must be in writing. Any form of writing, handwritten, typed or printed and in any language will suffice, but it must be in writing and any other expression of wishes will not be effective. Oral expressions of the testator’s wishes and wills recorded on sound-tapes or videotapes are therefore not valid wills. The will can be written on any material, on paper, parchment, linen or even carved in stone!
• the will must have been signed by the testator or by someone in his presence and at his request. The signature need not be the testator’s full name or indeed his name at all as long as a court will be satisfied that the mark which was made was intended as the testator’s signature and that it was intended to authenticate the document as his will.
• The testator’s signature on the will must have been made or acknowledged by the testator in the presence of two or more witnesses who were present at the same time.
• Each witness must have signed the will and either signed or acknowledged his signature in the testator’s presence.
• It must be apparent that the testator intended to give effect to the will by signing it. In practice the testator’s signature and those of the witnesses usually appear at the end of the will to show that they are intended to give effect as the testator’s will to all that goes before the signatures. If words appear in the will after the signatures of the testator there can be problems, in that the Probate Registry will insist upon the witnesses swearing an affidavit or making an affirmation to confirm that the words were in the will when it was signed and were not added later by the testator or by anyone else. If the words were added later of course, they would be ineffective and invalid and would not be admitted to probate.

Has the will or any part of it been revoked?

Revocation by marriage or civil partnership.

If a testator goes through a ceremony of marriage or registration of civil partnership after the date of a will, it will revoke the will unless the will expressly states that it is made with that particular marriage or partnership in mind and is to continue in force after the marriage or partnership. For the effect of a decree of divorce or annulment of marriage or dissolution of civil partnership on a will please refer to Chapter 9 pages 121 to 122.

Revocation by destruction with intention to revoke.

A will will have been revoked if it was destroyed by the testator or by another person at his request and in his presence. In either case the testator must have intended that the will should be revoked. The formalities must have been strictly followed. It is not sufficient that the word ‘revoked’ is written on the will or that part of the will has been crossed out. If the will is only partially destroyed or obliterated e.g. by tearing a piece out of the will, unless that piece is a vital part of the will, only the piece torn out or obliterated will have been revoked and the remainder of the will will still be valid. Neither is it sufficient if the will was accidentally destroyed, or if the testator was so drunk that he did not know what he was doing when he destroyed the will or if he otherwise lacked mental capacity. Moreover, if the testator asked someone to destroy his will for him, the destruction will have been ineffective unless it was done in his presence; for this purpose presence is narrowly interpreted and it is not sufficient if the person who destroyed the will did so in another room.

Revocation of a will by a new will or by a codicil

A new will or codicil which contains a clause to revoke an earlier will in its entirety, or to revoke only some of the provisions of the existing will is effective, but the new will or codicil must be signed and the testator’s signature witnessed in accordance with the formalities for making a will or the revocation will not be effective.

Implied revocation

If there is a later will or codicil containing no revocation clause but containing provisions which are inconsistent with an earlier will, the provisions of the earlier will which are inconsistent with the later will are considered to be revoked, but the other provisions of the earlier will remain valid, as do all the provisions of the later will.

A later will or codicil containing no revocation clause or provisions which are inconsistent with an earlier will does not revoke the earlier will and both the earlier will and the later document are effective so far as they are not inconsistent. Thus it is possible that there will be more than one will valid at any given time.

The effect of obliterations, insertions or alterations in a will or codicil

Any alteration, insertion or obliteration in a will or codicil will be of no effect unless it has been signed by the testator, and his signature has been witnessed in the same way as is required for the completion of a will or codicil, or initialled first by the testator and then by the witnesses in the document near the alteration, obliteration or insertion. If the alterations are not signed or initialled in this way and the original writing is still legible, a court will give effect to the will in its unaltered form, but if the alterations are not so signed or initialled and the original wording has been obliterated and is illegible, both the original and the altered wording will be ignored and the will will take effect as if there is a blank space in the will.

To what property does the will relate?

When considering the provisions of a will which has provisions (such as the appointment of an executor) in respect of any property the testator may have which is situated abroad, it is also necessary to consider the foreign law relating to the making of wills and the property, even if the will was made in the United Kingdom. The procedure and formalities for making a will that is to be recognised by the foreign country as a valid document of title to the property are different from those of England and Wales, and a lawyer who is qualified to practise in the foreign country should be consulted. The Law Society or relevant foreign embassy will be able to put you in touch with a suitable lawyer. Some states also have restrictions in relation to who can inherit property and the tax laws relating to property differ from those of English law.

If the deceased left a valid will or codicil that is relevant to property in England or Wales, the people with the first right to deal with or administer the estate are the executors appointed by the will or by a codicil, but if the appointed sole executor is under the age of eighteen, he cannot act, although the High Court can appoint his parent, guardian or another person to act for him until he becomes of age.

Even though a person has been named in a will as an executor, he is not obliged to act as executor. He can sign a form of renunciation (obtainable from law stationers) giving up the right to the executorship, provided that he does so before he exercises any of the rights or carries out any of the duties of an executor. If one appointed executor renounces executorship, the other appointed executors may proceed to obtain a grant of probate of the will.

An executor who wishes to renounce his right to probate, but cannot find his co-executor or the next person in line to prove the will or entitled to letters of administration of the estate, can discharge himself and obtain a receipt by lodging the renunciation document, together with the will or codicil at any District Probate Registry.

A further possibility is for an appointed executor to ask the Probate Registry to allow the other executors to go ahead and prove the will without him, without finally giving up his right to act as executor at a later stage should he later wish to do so. This is known as reserving power to prove a will and is particularly useful to cover the possibility that one of two executors might obtain probate alone but die before completing the winding up of the estate. The executor to whom probate has been reserved can then apply to the Probate Registry for authority to take over and finalise the administration and the winding up of the estate.

If all the executors are unable or unwilling to take on the work, or the will or codicil has not given anyone the position of executor, members of the following groups of people are entitled to apply for a grant of representation:

• 1.The person, or people, to whom the deceased has left the entirety of his estate.
• 2.The person entitled to that part of the estate which remains after taking out any specific gifts or legacies made by the will, or if they survived the testator but died without taking out a grant of representation, their personal representatives.
• 3.Specific legatees or creditors of the estate.
• 4.The Crown.

Only when there is no member of a group who is willing to take out a grant will a member of the next group be considered.

IF THERE IS IS NO VALID WILL

If there is no valid will, the following are entitled to wind up the estate, and again only when there is no member of a group who is willing to take out a grant will a member of the next group be considered:

• 1.Husband or wife or registered civil partner.
• 2.Sons or daughters, or their descendants if the son or daughter died before the deceased.
• 3.Parents.
• 4.Brothers or sisters of the whole blood, or their descendants if the brother or sister died before the deceased.
• 5.Brothers or sisters of the half blood, or their descendants if the brother or sister died before the deceased.
• 6.Grandparents.
• 7.Uncles or aunts of the whole blood, or their descendants if the uncle or aunt died before the deceased.
• 8.Uncles or aunts of the half blood, or their descendants if the uncle or aunt died before the deceased.
• 9.The crown.
• 10.Creditors of the deceased.

All those within each group are equally entitled, but only blood and adoptive relationships count, not step relations. Adoption severs the relationship between parent and child for this purpose but illegitimacy is ignored, and legitimate and illegitimate claimants have equal rights.

If the beneficiaries include someone entitled to a life interest or beneficiary under the age of eighteen, at least two people from the above categories must jointly obtain the right to wind up the estate from the probate registry.

THE GRANT OF REPRESENTATION

To prove a right to wind up an estate one obtains, i.e. ‘takes out’ from a probate registry, a document called probate if one is an executor appointed by the will or codicil or letters of administration of the estate in any other case. Both probate and letters of administration are sometimes referred to as the grant of representation and those to whom they are granted are sometimes referred to as Personal Representatives.

Except where a minimum of two are required as specified above, any number up to four of the people within each group specified above or any four executors may take out the grant together, but people from different groups may not be mixed. If the applicant is proposing to take out the grant on behalf of someone who is out of the country, or if the beneficiaries include an infant or beneficiary lacking legal mental capacity, a guarantee from a bank or insurance company is required.

To have entitlement to wind up an estate a person must also be of full age, not bankrupt and of sound mind.

SHOULD ONE EMPLOY A SOLICITOR OR DEAL WITH THE ESTATE ONESELF?

Each course has its advantages and disadvantages.

The main advantages of employing a solicitor are:

• If the terms of the will are contentious or not clear, the solicitor who is trained in the law and experienced in these matters should be able to give sound guidance.
• In the event of a mistake being made as a result of his negligence, the solicitor will be insured to cover any claims by the executor or the beneficiaries including the cost of properly pursuing the claims.
• In the event of unsatisfactory work or overcharging by solicitors complaints may be made to The Law Society Consumer Complaints Service. However, its idea of what constitutes fair and reasonable fees or unsatisfactory work might not be the same as the complainant’s and the process is laborious and slow.
• Much of the burden of the routine work involved will be taken over by the solicitor, although it will still be necessary for the personal representative to spend a great deal of time having meetings with, telephoning and writing letters to the solicitor, searching out documents, signing authorities, receipts, transfer documents and withdrawal forms.
• If the personal representative is a close friend or relative of the deceased, everything the personal representative does in relation to the estate will be a reminder and perhaps prove upsetting.

The main advantage of the DIY approach is:

• Cost saving – solicitors’ businesses are expensive to run and, as most people will know, their fees are not cheap, although few who have not experienced employing a solicitor in a probate matter will realise how expensive this can be.

Let me explain by way of an example.

The usual practice in probate matters is for a solicitor to charge a fee based on the time spent in carrying out the work, the fee being known as the hourly rate (i.e. charge per hour). In addition, a solicitor will frequently charge fees based on a percentage of the value of the gross estate.

The hourly rate depends upon the individual solicitor’s proportion of the cost of running the practice and the seniority of the person doing the work. Typical hourly rates at the present time might be between £85 and £200.

The percentage charge is usually between 1 per cent and 2 per cent.

Even more might be charged if unusually complex legal points arise.

In 2003 The Court of Appeal reviewed the basis upon which solicitors should be allowed to decide upon charges in probate matters in the case of Jemma Trust Co v Liptrott and Others, and confirmed that solicitors employed in the administration of an estate are entitled to charge both on the basis of an hourly rate and in addition a percentage of the value of the estate, as long as the total bill is ‘fair and reasonable remuneration taking all relevant factors into account’, and as long as the value element was not also taken into account in the calculation of the hourly rate and charged twice.

The following bands and rates for the value element were considered as likely to be reasonable:

• (a)up to £1 million – 1½ per cent (one and a half per cent) of the gross estate
• (b)£1 million–£4 million – ½ per cent of the gross estate
• (c)£4 million–£8 million – 1/6 per cent of the gross estate
• (d)£8 million–£12 million – 1/12 per cent of the gross estate.

The bands were only to be used as a guideline and were not to be regarded as sacrosanct. The Court also suggested that at the end of the work, if solicitors seek to charge in part on a value element, it might be helpful also to calculate the number of hours that would notionally be taken to achieve the separate charge to determine whether the overall remuneration was fair and reasonable.

The court considered that an hourly rate calculated on the basis of the expense rate (i.e. the cost to the solicitor of running his share of his practice) plus 25–33 per cent of that cost was too low if a value element was not also included.

Suppose someone dies leaving an estate consisting of, say:

• a freehold house valued at £180,000;
• furniture and personal effects of £15,000;
• life insurance policies £10,000;
• balance at the bank £300;
• savings with two building societies totalling £8,000;
• an ISA value £12,000;
• Premium Bonds £700;
• Pensioners Bonds £2,000;
• cash £100;
• shares made up of four different holdings totalling £5,900.

Suppose also there are three beneficiaries and two non-professional executors. A solicitor’s fee for the work to be done would probably be calculated as follows:

1 ½ per cent of the value of the gross estate	£3,510.00
Hourly rate charge: 14 hours at £100 per hour	£1,400.00
Total fee exclusive of VAT	£4,910.00
Add VAT at 17.5 per cent of £4,910	£859.25 _________
Total bill saved on this estate if no solicitor is employed	£5,769.25

In the Jemma Trust case the court suggested solicitors should obtain the prior agreement of the executors and the residuary beneficiaries as to what the basis of their charges would be. In order to make future charges transparent the Law Society requires solicitors to enter into a written ‘Client Agreement’ with the client; this sets out at the beginning of the transaction the basis upon which the charge for the work to be done shall be calculated.

If pressed, most solicitors will reluctantly agree a fixed fee for probate transactions at the outset rather than lose the business.

• The personal representative is much more in control of the pace at which the winding up of the estate progresses and is fully aware of the situation at all times. Most solicitors work under great pressure and do not find the time to chase up a tardy reply. Unless carried out by someone who does no other work than probate work, the probate files tend to get put on one side and take second priority to court work and conveyancing where there are strict time limits with disastrous consequences if the time limits are not met. Moreover, most solicitors are notoriously bad at keeping the client informed of progress or lack of progress.

A solicitor should be consulted immediately if:

• the estate looks as though it is likely to be too small to pay all the debts and legacies; or
• claims are made against the estate or the personal representative’s handling of it; or
• the personal representative is unsure about any point; or
• trusts or foreign property are involved; or
• the inheritance tax bill is large and there might be the possibility of reducing it by claiming reliefs such as business relief, agricultural property relief or woodland relief or rearranging the entitlements to the estate by means of a deed of family arrangement.

A solicitor will be able to give advice on a specific point or on the administration of the estate generally.