Succession

(A) When someone dies, without having made a will, the estate must be divided according to the intestacy rules, which are detailed in the Administration of Estates Act 1925 (AEA) 1925. There are, however, some types of property, which pass independently of the existence of a will or the intestacy rules. The position if someone dies intestate will be considered, by specifically focusing on the assets that form part of Mrs Muriel’s estate, including the: (1) money in the high interest bank account; and (2) the life assurance policies. Following this, there will be a discussion of who has entitlement to Mrs Muriel’s estate and in what proportions.

(1) Any property held by more than one person as joint tenants in equity passes automatically by survivorship on the death of the joint tenant to the surviving joint tenant(s). Joint tenants are treated in law as owning the property together rather than having specific shares. It is not clear on the facts whether Mrs Muriel owned any joint property. We are told she had approximately £120,000 in a high interest bank account. If she owned this jointly, it will automatically pass to the remaining joint tenant(s). If she did not hold this money jointly, the money will form part of her estate to be divided up according to the intestacy rules discussed below.

(2) Where a person takes out a simple life assurance policy, the benefit of the policy belongs to that person. On that person’s death the policy matures and proceeds form part of the estate of the deceased. However, a life assurance policy may also be taken out for the benefit of specified individuals. This may be done in one of two ways: (i) under s.11 Married Women’s Property Act 1882, where a person may express the policy to be for the benefit of their spouse of children, creating a trust in favour of the named beneficiaries; or (ii) the policy may be expressly written on trust for named beneficiaries. In this scenario, it is not clear who has the benefit of the life assurance policies. If they were written in Mrs Muriel’s name, they will form part of her estate to be divided according to the intestacy rules. If they were expressed to be for the benefit of her children, or expressly written in trust for specified beneficiaries, the proceeds of the policy would pass to those named. Further information is required to determine this.

Where the deceased is survived by their spouse and issue, the estate is divided according to the AEA 1925. The spouse receives all personal chattels absolutely and a statutory legacy of £125,000 tax free plus interest from death until payment. If the residuary estate, other than the personal chattels, is worth less than £125,000, the spouse receives this amount, leaving the issue nothing. If there are issue and the estate is worth more than £125,000 the rest of the estate will be divided into two equal funds – one held on trust for the spouse for life, with the remainder passing to the issue on statutory trusts. The other half is held on statutory trusts. Mrs Muriel did not, however, have a spouse at the time of her death, as we are told she had been a widow for 20 years. Where a person dies without a spouse, the estate may be divided between other surviving relatives in a certain order of priority, as follows:

• issue on the ‘statutory trusts’, but if none;

• parents, equally if both alive; but if none;

• brothers and sisters of the whole blood on the ‘statutory trusts’, but if none;

• brothers and sisters of the half blood on the ‘statutory trusts’, but if none;

• grandparents, equally if more than one, but if none;

• uncles and aunts of the whole blood on the ‘statutory trusts’, but if none;

• uncles and aunts of the half bloods on the ‘statutory trusts’, but if none;

• the Crown, Duchy of Lancaster, or Duke of Cornwall (bona vacantia).

The first category with entitlement is termed issue on the ‘statutory trusts’. The term ‘issue’ includes all direct descendants of the deceased, for example children, grandchildren and great-grandchildren. The term ‘statutory trusts’ means that members of the category of person share the estate equally amongst themselves provided they have attained the age of 18 or have married earlier. Mrs Muriel left two sons, Henry and Len, who are her issue. Her only daughter, Susan, who would also have been included, died last year following a long illness. As Susan has died, her issue i.e. Mrs Muriel’s grandchild, Fiona falls within this category. We are not told how old Fiona is. In order for her to take her interest, she must have attained 18 years old or have married earlier. Therefore, Mrs Muriel’s estate would be divided equally between Henry, Len and Fiona, so they get a third each with Fiona’s entitlement being contingent on her reaching 18 or marrying earlier. As there are issue on statutory trusts, with this being the highest category, Mrs Muriel’s sisters Isabel and Clara would not be entitled to anything under the intestacy rules.

(B) This question will be considered by discussing: (1) the forms required to apply for a grant; (2) who may apply for a grant; and (3) whether an application by Henry may be challenged.

(1) When applying for probate, several forms need to be completed. The probate application form (PA1), which requests details on, amongst other things, the person who has died, surviving relatives, the personal representative and the will (if applicable), must always be filled out. If it is Henry who applies for the grant of probate, he will have to fill out this form. A form relating to the value of the estate of the deceased must also be completed. The appropriate form will depend on the value of the deceased’s estate. If the gross value of the estate is less than £263,000, form IHT205 should normally be completed. If the estate is valued over £263,000, form IHT200 should be completed. Mrs Muriel’s estate is currently valued at £238,000 (£120,000 + £56,000 + £62,000), so it would appear that Henry would need to fill out IHT205. However, it is possible that any bonuses on the insurance policy, or interest on the money in the high interest account, could push the value of the estate over £263,000, so IHT200 may need to be completed instead. Once form PA1 and IHT205 (or IHT200) have been completed, the personal representative may choose which probate registry to use. It is important that a convenient location is chosen, as if complications arise, several visits to the registry may be required. The forms should then be returned to the probate registry chosen, together with the death certificate and the fee. The total fee payable is dependent on the value of the estate.

(2) A minimum of two administrators are required if a person dies creating a ‘minority interest’, which is an interest created in favour of someone under the age of 18. As discussed above, it is unclear how old Fiona is. It is possible she has a minority interest if she is under the age of 18 and hasn’t married. There is a certain order of priority which determines who may apply for the grant, as follows:

• the surviving husband or wife;

• the children of the deceased and the issue of any deceased child who died before the deceased;

• the father and mother of the deceased;

• brothers and sisters;

• grandparents;

• uncles and aunts;

• Treasury solicitor (bona vacantia on behalf of the Crown).

Mrs Muriel had no spouse at the time of death, so the next persons entitled to take the grant are her children Henry and Len. Fiona is also included in this category as issue of Susan, who died before the deceased. However, a minor cannot apply for a grant, so Fiona will only be able to apply for the grant if she is over 18 years old.

(3) Any person who wishes to challenge the application of the grant may do so by entering a caveat in the principal probate registry or in any district probate registry or sub-registry. A caveat is a notice issued out of the principal probate registry or a district registry preventing a grant from being issued. In order to enter into a caveat, the prescribed form must be completed in the appropriate book at any registry or sub-registry, or by sending by post a notice in the prescribed form to any registry or sub-registry. In the latter case, acknowledgement of the entry of the caveat is required to be given. The caveat should contain the deceased’s name and dates of birth and death, last address, the caveator’s name and an address for service within England or Wales.

There is a central index of caveats, which is searched, on all applications for probate made at any probate office. A caveat is enforceable for six months from the date on which it was entered but it can be renewed for further six-month periods. During this time, the grant may not be sealed (other than a grant ad colligenda bona or to an administrator pending suit). Applications to enter or renew a caveat can be made by personally attending a probate registry or by post and there is a fee payable of £15 for each six-month period.

When an application for probate is made and there is an effective caveat, a warning is given by the person applying for probate to the person placing the caveat. The person warning must then explain their interest in the estate of the estate of the deceased and must require the caveator to give particulars of any contrary interest in the estate. If the person applying for probate and the person placing the caveat are disputing each other’s entitlement to a grant, a summons can be issued so that it can be determined who should take probate.(C)

[Solicitor’s Address]

Henry Muriel

[Address]

1 March 2005

Ref: Mur/ 026897-01

Dear Henry

Grant of Probate

Further to our recent meeting, I am writing to explain how to take out a grant of probate alone. There are three main stages to applying for a grant – completing the relevant forms, returning the forms and attending the interview with the Probate Registry, which will be considered in turn.

Completing the forms

When applying for probate, you need to complete number of forms. The probate application form (PA1) must always be completed. The PA1 asks details about the deceased, any surviving relatives, the personal representative and details of the will (which would clearly not be relevant in this case). The form does not have to be signed at the time it is completed.

It is also necessary to complete a form relating to the value of the estate of the deceased. If the gross value of the estate is under £263,000, Form IHT205 should be completed and if over £263,000, Form IHT200 should be completed. Mrs Muriel’s estate is presently valued at £238,000, so the enclosed form IHT205 should be completed. However, you should try to find out the full value of all items in the estate, including any bonuses that are payable on the maturity of the life policies and any interest payable on the money in the bank account. If the estate is eventually valued at over £263,000, you will need to complete form IHT200 and Form D18 (Probate Summary). Please ensure that you complete the forms fully, and tick the checklist on for PA1 to ensure that you have enclosed all the necessary paperwork and accompanying documents. Guidance notes on how to fill out Form PA1 (PA1a) and IHT205 (IHT206) should assist you in filling in these forms, and are also enclosed with this letter.

Returning the forms

When you return the PA1 and IHT205, you should also ensure you send the following to the Probate Registry:

• An original copy of the death certificate of your mother, issued by the Registrar of Births, Deaths and Marriages or a Coroner’s certificate. A copy document is not acceptable.

• A cheque for the fee made payable to H.M. Paymaster General for the correct amount due, including the cost of the number of official copy grants you require. Please refer to the enclosed fee list (PA3).

• Any other documents specifically requested in form PA1.

Please note, however, that you should not send any correspondence to any of the local probate interview venues as they are operated on an appointment only basis and opening times do vary. You can choose to be interviewed at either a controlling Probate Registry or at one of the other interview venues.

Attending the appointment for interview

Once your application has been received, the Probate Registry will consider it and contact you if they require any further information. If there are no problems, the Registry will contact you within about 10 working days from the date of receipt of the application by letter detailing a date of the appointment for interview at the venue you have chosen. If you would like an acknowledgment of the application, please do not hesitate to send a stamped addressed envelope. You should then attend your interview on the date and time given, in order to confirm the details completed on the forms and to answer any further questions the Probate Registry may have. Further details of the interview will be included together with the appointment letter. During the interview you will be asked to sign a form of oath and to swear or affirm before the interviewer that the information you have given is true to the best of your knowledge. Please ensure that you take proof of identification to the interview.

Following the interview, the grant will be prepared by the Probate Registry and sent to you by post with any copies you have ordered. When you attend the Probate Registry, they should be able to give you an idea of how long it will take to have this prepared. Once you receive the grant, you can present it to any person or organisation holding your mother’s property, in order to deal with the property. For example, in order to transfer the money from your mother’s account you will need to provide a copy of the grant.

I hope that this has clarified matters for you but please do not hesitate to contact me if you require any further assistance.

Yours sincerely

Solicitor

Encs

Form PA1

PA1a guidance notes on PA1

Form IHT205

IHT206 guidance notes on IHT205

PA3 fee list

(D) Before the letters of administration are issued, the administrator has few powers. This is because the administrator’s authority stems from the grant, which is not retrospective to the date of death. However, there are three situations where assets may pass to the administrator without the letters of administration, as follows:

(1) Under the Administration of Estate (Small Payments) Act 1965, payments may be made under various statutes to persons who appear to be beneficially entitled to the assets, without requiring formal proof of title. The asset value must not, however, exceed £5,000 and payments are to be made at the discretion of the institutions concerned. Payments can be made for example in respect of National Savings products such as premium bonds and money in building societies and friendly societies.

(2) Chattels including property such as furniture, clothing and cars can usually be sold without having to prove formally to the buyer that they are entitled to sell such items.

(3) Normally, letters of administration will not be required where the estate is composed of any cash found in the deceased’s possession.

(E) The following information will be required in order to complete the papers and apply for the grant:

• The exact age of Fiona, in order to determine whether there is a minority interest. If Fiona is under 18, two administrators will be required to take the grant, unless otherwise directed by the registrar.

• Mrs Muriel’s full name and whether any assets were held in an alias name requiring other names to appear in the grant. The name needs to be checked against the death certificate.

• Mrs Muriel’s dates of birth and death and age at death need to be ascertained for the oath.

• The last full permanent address of Mrs Muriel.

• The applicant’s full name, address and occupation, if any, to include in the oath.

• The gross and net values of the estate should be determined and whether an Inland Revenue Account (IHT200) needs to be delivered. In order to do this, the value of the insurance policies on Mrs Muriel’s death and the exact amount of money in the high interest bank account need to be ascertained.

• The fee payable to the probate registry needs to be calculated on the net estate passing under the grant and the number of copies of the grant required.

Bibliography

Bamford K, Bramley S., Cartledge A., Halberstadt R., King L., Morgan A., Norris M., Pooley S., Pervasive and Core Topics, Jordans: 2004

Borkowski A., Textbook on Succession, Oxford University Press: 2002

King. L, Probate Practitioner’s Handbook, The Law Society: 2003

Parry D.H., Kerridge R., Clark J.B., Parry and Clark: The Law of Succession, Sweet and Maxwell: 2002

Butterworths: Halsbury’s Laws Direct

http://www.courtservice.gov.uk

http://www.inlandrevenue.gov.uk