Learning Outcomes
After studying this article, you will be able to identify the legal requirements for a valid will, explain the concept of testamentary capacity, and outline the main duties and powers of personal representatives in estate administration. You will also be able to apply these principles to SQE1-style problem questions and spot common pitfalls in estate planning and administration scenarios.
SQE1 Syllabus
For SQE1, you are required to understand the legal framework and practical steps involved in estate administration. Focus your revision on:
- the statutory formalities for a valid will under the Wills Act 1837
- the meaning and assessment of testamentary capacity
- the role and duties of personal representatives (executors and administrators)
- the process for collecting, managing, and distributing estate assets
- the consequences of invalid wills and intestacy
- the legal remedies and protections available in estate administration
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
- What are the four main formal requirements for a valid will under English law?
- Who can act as a personal representative, and what is the difference between an executor and an administrator?
- What is the test for testamentary capacity, and when must it be satisfied?
- What happens if a will is invalid or does not dispose of the whole estate?
Introduction
Estate administration is the legal process of managing and distributing a deceased person’s assets in accordance with their will or, if there is no valid will, under the intestacy rules. For SQE1, you must be able to identify the requirements for a valid will, understand the concept of testamentary capacity, and explain the duties and powers of personal representatives. This article provides a concise overview of these core principles and their practical application.
Validity of Wills: Formalities and Capacity
A will is only valid if it complies with the statutory formalities and the testator has the necessary capacity and intention at the relevant time.
Key Term: will A legal document by which a person (the testator) sets out how their property is to be distributed after death.
Key Term: testator The person who makes a will.
Statutory Formalities
The Wills Act 1837 sets out the requirements for a valid will:
- The will must be in writing.
- It must be signed by the testator (or by someone else in their presence and at their direction).
- The testator’s signature must be made or acknowledged in the presence of at least two witnesses present at the same time.
- Each witness must sign or acknowledge their signature in the presence of the testator.
Key Term: attestation The act of witnessing the testator’s signature and signing the will as a witness.
If any of these requirements are missing, the will is invalid and the estate will be distributed under the intestacy rules.
Testamentary Capacity
The test for testamentary capacity is set out in Banks v Goodfellow (1870). The testator must:
- understand the nature of making a will and its effects
- know the extent of their property
- appreciate the claims of those who might expect to benefit
- not be affected by any disorder of the mind that influences their decisions
Key Term: testamentary capacity The mental ability required to make a valid will, assessed at the time the will is executed.
If the testator lacks capacity at the time of execution, the will is invalid.
Intention
The testator must intend the document to be their will and must know and approve its contents. If the testator is unaware of the contents or is subject to undue influence, the will may be set aside.
Key Term: knowledge and approval The requirement that the testator understands and agrees to the contents of the will at the time of execution.
Personal Representatives and Their Duties
When a person dies, their estate must be administered by personal representatives (PRs). The PRs are responsible for collecting in the assets, paying debts and liabilities, and distributing the estate to those entitled.
Key Term: personal representative (PR) The person(s) responsible for administering a deceased person’s estate. This includes executors (appointed by will) and administrators (appointed under intestacy).
Executors and Administrators
- Executors are appointed by the will.
- Administrators are appointed by the court if there is no valid will or no executor able or willing to act.
Key Term: executor A person named in a will to carry out the instructions of the testator and administer the estate.
Key Term: administrator A person appointed by the court to administer the estate where there is no valid will or no executor able or willing to act.
Main Duties
Personal representatives must:
- identify and secure all estate assets
- obtain a grant of representation (probate or letters of administration)
- pay funeral expenses, debts, and taxes
- distribute the remaining assets to beneficiaries or heirs
They owe a fiduciary duty to act in the best interests of the estate and its beneficiaries.
Worked Example 1.1
Scenario:
Sarah dies leaving a valid will appointing her friend Tom as executor. Her estate includes a house, savings, and personal possessions. Tom collects in the assets, pays off Sarah’s credit card debts and funeral expenses, and then distributes the remaining assets to the beneficiaries named in the will.
Answer: Tom is acting as executor. He must follow the will’s instructions, pay debts and expenses, and distribute the estate. He is personally liable if he fails to carry out these duties properly.
Worked Example 1.2
Scenario:
James dies without a valid will. His wife and two adult children survive him. His wife applies for a grant of letters of administration.
Answer: As there is no valid will, James’s estate is administered under the intestacy rules. His wife becomes administrator and must distribute the estate according to the statutory order of entitlement.
The Estate Administration Process
Estate administration involves several key steps:
1. Identifying and Securing Assets
The PRs must locate and safeguard all assets belonging to the deceased, including property, bank accounts, investments, and personal belongings.
2. Obtaining the Grant of Representation
A grant of representation is usually required to prove the PRs’ authority to collect in assets and deal with third parties.
Key Term: grant of representation The legal document (probate or letters of administration) confirming the PRs’ authority to administer the estate.
3. Paying Debts and Taxes
The PRs must pay the deceased’s outstanding debts, funeral expenses, and any taxes due (including inheritance tax, income tax, and capital gains tax up to the date of death) before distributing the estate.
4. Distributing the Estate
Once debts and taxes are settled, the PRs distribute the remaining assets to the beneficiaries named in the will or, if there is no valid will, to the heirs under the intestacy rules.
Worked Example 1.3
Scenario:
Anna is named as executor in her father’s will. She discovers that her father owed significant debts. She pays the funeral expenses and debts from the estate’s bank account before distributing the remainder to the beneficiaries.
Answer: Anna must pay all debts and expenses before distributing the estate. If she distributes assets before settling debts, she may be personally liable to creditors.
Consequences of Invalid Wills and Intestacy
If a will is invalid or does not dispose of the whole estate, the intestacy rules apply. The Administration of Estates Act 1925 sets out the order of entitlement for relatives. Cohabitants and friends have no automatic right to inherit under intestacy.
Key Term: intestacy The statutory regime for distributing a deceased person’s estate when there is no valid will.
Legal Challenges and Protections
Disputes Over Will Validity
A will may be challenged on grounds such as lack of capacity, undue influence, or failure to comply with formalities. If a challenge succeeds, the will (or part of it) is set aside.
Claims Under the Inheritance (Provision for Family and Dependants) Act 1975
Certain individuals (e.g., spouses, children, dependants) can claim reasonable financial provision from the estate if the will or intestacy rules do not provide adequately for them.
Errors and Omissions
Mistakes in a will may be rectified by the court if they result from a clerical error or a failure to understand instructions, provided the testator’s true intentions can be established.
Key Point Checklist
This article has covered the following key knowledge points:
- The statutory formalities for a valid will under the Wills Act 1837.
- The test for testamentary capacity and the requirement for intention.
- The roles and duties of personal representatives (executors and administrators).
- The main steps in estate administration: collecting assets, obtaining a grant, paying debts and taxes, and distributing the estate.
- The consequences of invalid wills and intestacy.
- The remedies and protections available in estate administration.
Key Terms and Concepts
- will
- testator
- attestation
- testamentary capacity
- knowledge and approval
- personal representative (PR)
- executor
- administrator
- grant of representation
- intestacy
