Beneficiaries of a will
When a loved one dies, practicalities are often the last thing on the mind of relatives. However from a legal perspective, one of the first matters that needs to be attended to is ascertaining the provisions of the will, if one has been made by the deceased. This document will set out who the executors of the will are, so that they can deal appropriately if the will has been validly made.
There are certain rules to be complied with, for example, the will must be in writing and the signature must have at least two witnesses, neither of whom can be beneficiaries under the will. Furthermore, the document cannot be damaged and the deceased cannot have married after the date of the will (unless the will anticipated this). The will should set how who is to receive what under the will who will be the beneficiaries and entitled to a portion of the estate. However, if it transpires that there is a problem with the will, for example if some beneficiaries had already died before the deceased, then there may be an issue of ‘intestacy’ or ‘partial intestacy’. This means that certain legal rules apply to determine what happens to the assets and estate of the deceased in the absence of a will (or partially effective will).
Assuming in the first instance that all is well and the will is valid, beneficiaries named in the will should inherit property, possession or money. One of the main considerations of the beneficiary from a fiscal perspective will be the tax liability which this inheritance attracts and such a beneficiary would be well-advised to take legal and financial advice on the situation to ensure that all formalities and taxes are appropriately paid. The liability to pay income tax may depend on what form the inheritance takes. A legacy (such as the designated lump sum or asset a beneficiary inherits) may not incur income tax liability, but any income from the residue of the estate may attract a tax liability. Similarly, issues of capital gains tax need to be considered as this tax may have implications on future dealings with an asset.
What happens, however, if the will was not valid and the rules of intestacy apply? First, an administrator will be appointed by a Grant of Representation to deal with matters. This administrator is issued from the Probate Registry of the High Court. The law deems that there is a ‘hierarchy’ of beneficiaries and they will inherit in a certain order of priority, depending on the family links of the deceased. For example, according to the rules of intestacy, if the deceased was married but had no children, then everything goes to the spouse. However, if there is a remaining civil partner and also children, then the estate is divided between them all and so on. In all cases, the inheritance is calculated once everything the deceased owes has been deducted. Sometimes the identity of the beneficiary is difficult to ascertain under the rules of intestacy and there are some specialist companies who can help in locating and identifying missing beneficiaries.
Some categories of property are treated slightly differently however. If the deceased (who died intestate) owned property with another person in a certain legal capacity called ‘joint tenants’, then the other person would inherit all the property irrespective of the rules of intestacy. However, if the property was owned jointly as ‘tenants in common’, the deceased share in the property would form part of the estate. This share can be any percentage and this needs to be determined before any transfer of property can be made.
Various categories of people are not recognised as beneficiaries under the rules of intestacy, such as unmarried heterosexual partners and homosexual partners who are not part of a civil partnership. There is also an option to apply to the court for a contribution from the estate under the rules of intestacy if there is an appropriate argument that an individual has a right an inheritance.
What happens if someone contents the provisions of a will and argues that there is something amiss? In these circumstances, it is best to seek legal advice so that the merits of the claim can be assessed. It is often difficult to prove that a will was created under undue influence, for example, but a challenger can often be successful in dragging out a case. Each case turns on its own merits and the best solution is to seek professional advice.
There is a trend for tenants of council housing to use human rights arguments to defend eviction claims. Local Authority claims are commonly defended even where the tenant is a nuisance tenant and/or not paying rent using the right of respect for a home ! This issue is likely to become even more prominent under the UK Government’s new rules whereby council tenant rents may well be significantly increased in the near future, so it will be interesting to see how this situation plays out.
