Learning Outcomes
After reading this article, you will be able to explain the legal purpose and main functions of wills in estate planning. You will understand the statutory requirements for a valid will, the concept of testamentary capacity, and the consequences of intestacy. You will also be able to identify the practical uses of wills, including asset distribution, executor appointment, and guardianship provisions, as required for SQE1.
SQE1 Syllabus
For SQE1, you are required to understand the purpose and function of wills from both a legal and practical standpoint. In your revision, focus on:
- 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.
- What are the statutory formalities required for a valid will in England and Wales?
- What is the test for testamentary capacity, and why is it important?
- Name two main functions of a will in estate planning.
- 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.
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: 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.
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).
- 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.
Key Term: formalities The legal requirements that must be satisfied for a will to be valid, including writing, signature, and 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.
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), the person seeking to prove the will must show that the testator understood and approved its contents.
Key Term: knowledge and approval The requirement that the testator understands and agrees to the contents of the will at the time of execution.
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).
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.
Key Term: executor The person appointed in a will to administer the estate of the deceased.
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.
Tax Planning
Wills can be used to structure gifts in a way that minimises inheritance tax, for example by leaving assets to charity or using trusts.
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.
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.
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.
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.
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.
Exam Warning
For SQE1, be careful to distinguish between the formalities for a valid will and the requirements for testamentary capacity. Both must be satisfied, and a failure in either will invalidate the will.
Revision Tip
When revising, practise identifying whether a scenario describes a valid will or an intestacy situation. Focus on the statutory requirements and the consequences of failing to meet them.
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.
- The main legal functions of wills in estate planning.
- The consequences of intestacy and the operation of the intestacy rules.
- The practical uses of wills, including executor and guardian appointments.
Key Terms and Concepts
- will
- testator
- formalities
- testamentary capacity
- knowledge and approval
- executor
- intestacy