Introduction to wills and estate planning - Purpose and func...

Learning Outcomes

This article explains the purpose and function of wills in estate planning for the SQE1 FLK2 exam, including:

• the statutory requirements for formal validity under the Wills Act 1837 and how they are applied in practice
• the Banks v Goodfellow test for testamentary capacity and how it differs from the Mental Capacity Act 2005 test
• the separate requirement of knowledge and approval, the presumption that it is satisfied, and circumstances that rebut that presumption
• the main legal functions of wills in estate planning, such as asset distribution, executor and guardian appointments, and trusts
• how wills can express funeral wishes, interact with tax‑efficient structuring, and coordinate with assets passing outside the estate
• the operation of the intestacy rules where no valid will exists and why they often produce unintended results
• typical exam‑focused problem areas, including gifts to witnesses or their spouses, partial intestacy, cohabitants and stepchildren, and suspicious circumstances around execution.

SQE1 Syllabus

For SQE1, you are required to understand the purpose and function of wills in estate planning, with a focus on the following syllabus points:

• the statutory requirements for a valid will in England and Wales
• the meaning and assessment of testamentary capacity
• the main legal functions of wills in estate planning
• the consequences of intestacy and the default rules for estate distribution
• the practical uses of wills, including executor and guardian appointments

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.

1. What are the statutory formalities required for a valid will in England and Wales?
2. What is the test for testamentary capacity, and why is it important?
3. Name two main functions of a will in estate planning.
4. What happens to a person’s estate if they die without a valid will?

Introduction

A will is a legal document that sets out how a person’s assets are to be distributed after their death. Wills are a central tool in estate planning, allowing individuals to control the destination of their property, appoint executors, and make arrangements for dependants. For SQE1, you must understand both the legal requirements for a valid will and the practical reasons why making a will is important.

Key Term: will
A legal document that sets out how a person’s property is to be distributed after their death.

Key Term: testator
The person who makes a will.

Statutory Requirements for a Valid Will

A will must comply with strict statutory formalities to be valid in England and Wales. These requirements are designed to protect testators and ensure that their true intentions are carried out.

Key Term: formalities
The legal requirements that must be satisfied for a will to be valid, including writing, signature, and witnessing.

Formalities

The Wills Act 1837 sets out the minimum requirements for a valid will:

• The testator must be at least 18 years old.
• The will must be in writing.
• The testator must sign the will (or direct someone else to sign in their presence and at their direction).
• It must appear that the testator intended by their signature to give effect to the will.
• The signature must be made or acknowledged in the presence of two or more witnesses present at the same time.
• Each witness must sign the will in the presence of the testator.

Practical points often tested:

• Witnesses do not need to know the contents of the will or that they are witnessing a will; they must witness the visible act of signing or its acknowledgment. A blind person cannot act as a witness because they cannot witness the visible act.
• A witness may be an executor. However, if a beneficiary (or the beneficiary’s spouse or civil partner) witnesses the will, the gift to that beneficiary fails, but the will itself remains valid (Wills Act 1837, s15).
• The attestation process is simplified by an attestation clause. If present, it raises a presumption of due execution; if absent or defective, the Probate Registry may require affidavit evidence from a witness (Non‑Contentious Probate Rules 1987, r12).

Key Term: attestation clause
A clause reciting that the s9 Wills Act formalities were complied with; it raises a presumption of due execution.

Incorporation by reference is permissible. A will may identify another existing document that becomes part of the will if the document exists at the date of the will and is clearly referred to as so existing; future-intended documents cannot be incorporated.

Note on remote witnessing: Temporary pandemic measures permitted “presence” by video-link for certain periods. Those measures have now expired, so physical presence is again required for valid witnessing.

Testamentary Capacity

A valid will requires the testator to have mental capacity at the time of making the will. The classic test is set out in Banks v Goodfellow (1870):

• The testator must understand they are making a will and its effects.
• The testator must know the extent of their property.
• The testator must appreciate the claims of those who might expect to benefit.
• The testator must not be affected by any mental disorder that influences their decisions.

Capacity is judged at the material time—usually at execution. There is a rebuttable presumption of capacity where a rational will is prepared by an experienced, independent solicitor and properly executed. The statutory Mental Capacity Act 2005 test is not the governing test for wills; Banks v Goodfellow remains the authority.

Solicitors should consider the “golden rule” in borderline cases: obtain contemporaneous medical evidence of capacity (and ideally have the doctor witness the execution), and keep a detailed attendance note. This is good practice and assists if the will is later challenged.

Key Term: testamentary capacity
The mental ability required to make a valid will, including understanding the nature and effect of the will, the extent of property, and the claims of potential beneficiaries.

Knowledge and Approval

The testator must know and approve the contents of the will. If the will is read over to the testator and they execute it, knowledge and approval are usually presumed. However, if there are suspicious circumstances (such as a major beneficiary drafting the will or a vulnerable testator), the person seeking to prove the will must dispel the suspicion by showing that the testator understood and approved its contents.

Examples of situations where extra care is needed:

• Testator blind or illiterate; a special attestation clause (stating the will was read over and understood) is prudent, and the Probate Registry may require affidavit evidence (NCPR rr13, 16).
• Beneficiary involvement in drafting (Wintle v Nye) or unusual dispositions by a person with significant anxiety or dependence (Gill v Woodall) may displace the presumption; clear evidence of knowledge and approval will be required.

Key Term: knowledge and approval
The requirement that the testator understands and agrees to the contents of the will at the time of execution.

Separate but related grounds that can invalidate a will (or a gift) include duress, fraud, and undue influence. Undue influence in the wills context means coercion such that the testator’s free will is overborne; mere persuasion is not enough. Where alleged, the burden falls on the challenger to prove it.

Main Functions of Wills

Wills serve several important legal and practical functions in estate planning.

Asset Distribution

A will allows the testator to decide who will receive their property after death. This includes specific gifts (such as jewellery or cash), as well as the residue of the estate (everything left after debts and other gifts are paid).

Key Term: residue
The remainder of the estate after payment of debts, expenses, taxes, and specific/general gifts.

Distribution planning can address:

• Specific legacies (e.g. “my grandfather’s watch to N”).
• Pecuniary legacies (cash sums), which may be general or demonstrative (e.g. “£5,000 from my ABC Bank account”).
• Residuary dispositions (e.g. “the rest to X”), often the largest gift.
• Substitutional provisions (e.g. “to X, but if X predeceases me, to Y”) and survivorship clauses (e.g. “provided a beneficiary survives me by 28 days”).
• Class gifts (e.g. “to my children equally”) and section 33 Wills Act 1837, which can save gifts to issue (children or remoter descendants) from lapse by passing them down to living issue unless a contrary intention appears.

Appointment of Executors

The testator can appoint one or more executors to administer the estate. Executors are responsible for collecting assets, paying debts and taxes, and distributing the estate according to the will. Up to four executors may take a grant for the same property, and a substitute can be named. A minor may be appointed, but cannot take a grant until 18; in the meantime, the person entitled to residue typically administers.

Key Term: executor
The person appointed in a will to administer the estate of the deceased.

Wills frequently appoint the same individuals as executors and trustees, so that any trust arising under the will continues seamlessly after administration. Including suitable administrative and investment powers can streamline estate and trust management.

Appointment of Guardians

A will can appoint guardians for minor children. This ensures that, if both parents die, the testator’s chosen person will have legal responsibility for the children. Practical drafting may also include directions or letters of wishes to guide guardians, although the appointment itself is the key legal act.

Tax Planning

Wills can be used to structure gifts in a way that minimises inheritance tax, for example by leaving assets to charity (which may trigger the reduced IHT rate if sufficient proportion passes to charity) or using trusts in appropriate circumstances. Although many tax rules operate independently of wills (and some assets pass outside the will), testamentary dispositions remain critical for overall tax efficiency.

Avoiding Intestacy

If a person dies without a valid will, their estate is distributed according to the intestacy rules. These rules may not reflect the testator’s wishes and can result in unintended outcomes, such as excluding unmarried partners or stepchildren.

Key Term: intestacy
The situation where a person dies without a valid will, so their estate is distributed according to statutory rules.

Other common uses and inclusions:

• Funeral preferences (e.g. burial or cremation). These are not legally binding directions; they guide personal representatives.
• Business continuity (e.g. specific legacies of sole-trader businesses and express powers for PRs to run or sell a business).
• Trusts for minors or vulnerable beneficiaries (e.g. life interests, discretionary trusts) and express powers (maintenance and advancement) suited to those trusts.

Consequences of Intestacy

If a person dies intestate, the law sets out a strict order of priority for who inherits the estate. This can lead to outcomes that the deceased would not have chosen, such as distant relatives inheriting instead of close friends or partners.

Headline points under the Administration of Estates Act 1925:

• A surviving spouse or civil partner and issue (children or remoter descendants) share the residuary estate in a split that prioritises the spouse/civil partner:
  • The spouse/civil partner takes all personal chattels absolutely, a fixed “statutory legacy” (currently £322,000 for deaths on or after 26 July 2023), plus one-half of the residue over that sum.
  • The other half of the residue passes on statutory trusts for the issue (typically in equal shares per stirpes).
• If there is a surviving spouse/civil partner and no issue, the spouse/civil partner takes all.
• If there is no surviving spouse/civil partner, relatives inherit in a set order (issue, parents, whole-blood siblings and their issue, half-blood siblings and their issue, grandparents, whole-blood uncles/aunts and their issue, half-blood uncles/aunts and their issue). If none exist, the estate passes as bona vacantia to the Crown.
• Cohabitants and stepchildren are not included under intestacy (unless legally adopted).
• Adopted children and children whose parents were not married are included as “issue”.

Key Term: statutory legacy
The fixed sum a surviving spouse/civil partner receives on intestacy when the deceased also leaves issue (currently £322,000, subject to periodic review).

Other important statutory rules:

• Section 184 Law of Property Act 1925 (commorientes): where order of deaths cannot be proved, the older is deemed to have died first.
• Intestacy operates subject to property passing outside the estate (e.g. beneficial joint tenancies by survivorship, life policies written in trust, certain pension death benefits, and nominated property).

Worked Example 1.1

Aisha dies without a will. She is survived by her long-term partner (not married or in a civil partnership) and her two siblings. Who will inherit her estate?

Answer:
Under the intestacy rules, the partner will not inherit anything. The estate will be divided equally between the siblings.

Worked Example 1.2

Ben wants to leave his business to his daughter, provide a cash gift to his nephew, and ensure his partner can live in their home for life. How can he achieve this?

Answer:
Ben can use his will to make a specific gift of the business to his daughter, a pecuniary legacy to his nephew, and a life interest trust of the house for his partner.

Worked Example 1.3

Dev dies intestate leaving a spouse, Maya, and two adult children. His estate (excluding jointly owned property passing by survivorship) is £700,000 and includes personal chattels of modest value. How is the residuary estate distributed?

Answer:
Maya takes all personal chattels absolutely, the statutory legacy (£322,000), and one-half of the balance of residue after that sum is set aside. The children take the other half of the residue on the statutory trusts. Jointly owned assets passing by survivorship are outside intestacy.

Worked Example 1.4

Priya signs her will before two witnesses. One witness is her friend; the other is her friend’s husband, Liam. Priya leaves a £10,000 gift to her friend. What is the effect of Liam witnessing the will?

Answer:
The will remains valid, but the £10,000 gift to the friend fails because a beneficiary’s spouse witnessed the will (Wills Act 1837, s15). Liam’s witnessing does not invalidate the will.

Practical Applications of Wills

Wills are not just legal documents—they have real practical effects:

• They allow for tailored gifts to individuals or charities.
• They can provide for dependants who might otherwise be excluded.
• They can prevent disputes by making the testator’s wishes clear.
• They can be used to set up trusts for vulnerable beneficiaries or for tax planning.
• They can integrate with other estate structures (e.g. nominations, life policies in trust) and reflect assets passing outside the estate so the overall plan remains coherent.

Further practice-focused points:

• A well-drafted residuary gift avoids partial intestacy and ensures unwanted default rules do not apply to any unallocated portion of the estate.
• Clear identification of beneficiaries and substitution provisions reduce the risk of lapses and class-definition disputes.
• Including a special attestation clause where needed (e.g. blind or illiterate testators) reduces procedural hurdles at the Probate Registry.

Exam Warning

• Distinguish clearly between formalities under s9 Wills Act (writing, signature, intention to give effect, witnessing) and testamentary capacity (Banks v Goodfellow) and knowledge and approval; they are separate requirements. A failure in any one will invalidate the will or the affected gift.
• Remember s15 Wills Act: if a beneficiary (or their spouse/civil partner) acts as a witness, the gift to that beneficiary fails; the will itself remains valid.
• Do not overlook property passing outside the will (e.g. beneficial joint tenancies, life policies in trust, some pension death benefits); intestacy and wills only govern the death estate.

Revision Tip

When analysing a scenario, map assets to categories:

• property passing outside the estate by survivorship or under trusts/nomination
• property within the estate governed by a will
• property within the estate governed by intestacy.

Check formal validity (s9), capacity (Banks v Goodfellow), and knowledge and approval separately. If intestacy applies, identify whether there is a spouse/civil partner and issue, apply personal chattels, statutory legacy, residue split, and consider commorientes.

Key Point Checklist

This article has covered the following key knowledge points:

• The statutory formalities for a valid will in England and Wales.
• The meaning and assessment of testamentary capacity and the separate requirement of knowledge and approval.
• The main legal functions of wills in estate planning (distribution, executors, guardians, trusts, tax‑aware structuring).
• The consequences of intestacy, including the statutory legacy, personal chattels, and residue split; the commorientes rule; and exclusions of cohabitants and stepchildren.
• Practical uses of wills, including executor and guardian appointments, and coordination with property passing outside the estate.
• The effect of s15 Wills Act where a beneficiary or their spouse/civil partner witnesses the will (gift fails but will remains valid).
• The role of attestation clauses and incorporation by reference in reducing proof and procedural issues.

Key Terms and Concepts

• will
• testator
• formalities
• attestation clause
• testamentary capacity
• knowledge and approval
• executor
• residue
• intestacy
• statutory legacy