Administration of trust / past year attempt - april 2010 part c
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Administration of trust / past year attempt - april 2010 part c

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disclaimer - this is just an attempt to answer the question for tutorial/assignment, pls double check with ur own notes for confirmation

disclaimer - this is just an attempt to answer the question for tutorial/assignment, pls double check with ur own notes for confirmation

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Administration of trust / past year attempt - april 2010 part c Administration of trust / past year attempt - april 2010 part c Document Transcript

  • ADMINISTRATION OF TRUST – LAW 556PREPARED BY AHMAD FAROUQ AMIR (2010313869)APRIL 2010 PART C – QUESTION 1 1. Introduction The law of succession is concerned with the transfer or devolution property upon death. It can be devided into two principal, namely : a) The law of intestate succession b) The law of testate succession or the law of wills In a property held in trust, if an individual holds the legal, but not the beneficial title to property, then, on his death, although the legal title will pass under his will or under the intestacy rules applicable to his estate, the beneficial title will remain vested in the person who has beneficial title. 2. Facts Robert (testator) - Died June 2009. Nicole & Margaret - Robert’s sisters which in the will stated that th house in Nilai Impian was to be given to his favourite sister. Donald - To receive a BMW but Donald died in April 2009. Sandra - Donald’s daughter. Joe - To receive RM 100,000 in CIMB saving bank account. Kevin - To receive 10,000 shares James - As the witness and to receive RM 60,000 because of his comradeship. Lucy - James’s servant and witness of the will. David - Executor named by Robert. To advise David the validity of the will and the disposition in the will. 1|Page
  • ADMINISTRATION OF TRUST – LAW 556PREPARED BY AHMAD FAROUQ AMIR (2010313869) 3. Issues 1. Whether the will made by Robert is valid. 2. Whether Nicole or Margaret is entitled to the house in Nilai Impian. 3. Whether Joe is entitled to RM 100,000. 4. Whether Kevin is entitled to 10,000 shares. 5. Whether Sandra, being Donald’s daughter is entitled to the BMW car. 6. Whether James as the witness entitled to RM 60,000. 4. Intestate/Testate Upon his death, Robert had left a will to manage his estate. Therefore, he died testate. It is the essence of testacy that there must be a legally valid and enforceable will in existence. Section 18 of Wills Act 1959 provides that a will is the intention of the testator as to how he/she wants to dispose his property and it will become a legal document upon the death of the testator. 5. First Issue - Whether the will made by Robert is valid. 5.1 The Law Section 3 of the wills act state that a person may dispose of his property by will. Section 5 of the wills act lay down the requirement of a will. Section 5(1) that the will must be in writing to become a strong evidence of testator’s wishes and to prevent fraud. Section 5(2) specifies that the will must be signed by the testator at the foot and end of the document. The signature has to be witnessed by two or more witnesses. Section 4 of the Probate and Administration Act 1959 provides that the court have the power to appoint an administrator to an estate of a testator. Literally, the statutory formalities in the making of will are witnesses, signature, acknowledgement (material) and writing (it must be written in form of pencil, printed, typed, and by computer. 2|Page
  • ADMINISTRATION OF TRUST – LAW 556PREPARED BY AHMAD FAROUQ AMIR (2010313869) 5.2 The Application The will was made, Robert wrote it on a piece of paper. Along with that, James who was there as the witness had signed the will. 10 minutes after the session, Lucy, James’s servant, arrived and it was mention in the facts that Robert had told Lucy about the will and Lucy then signed the paper which making her as the second witness. This shows that the three of them was there at the time the will was made. When the will was being prepared for probate, it was found that the will made by Robert was not dated. There is no provision in the Wills Act which mentioned that a will needs to be dated and vice versa. Moreover, in the case of Katchi Fatima it was held that a non dated will is valid. 5.3 Conclusion The will made by Robert is valid even though it had not been dated. This is by virtue of Section 3 and Section 8 of the Wills Act which lay down the requirement of a will. It is also by virtue of Section 5(2) of the Wills Act that the witnesses during the will been made must be minimum of two person. All the requirements have been fulfilled in order to consider the will as a valid will. 6. Second Issue - Whether Nicole or Margaret is entitled to the house in Nilai Impian. 6.1 The Law It has to be determined whether the house at Nilai Impian given by Robert is a specific gift or general gift. Specific Gift is a gift for a special item. It has two characteristic : a) It forms a special part of the testator’s estate at the date of his death b) That specified part of the testator’s estate can be severed from the rest of the testator’s estate. A precondition is that the beneficiaries should survive the testator in order to take the benefit, or else the gift will lapse. The exceptions to the doctrine of lapse, whereby, a gift to a predeceased person will not lapse if he/she left behind an issue. General Gift is a gift not of particular item but of something which is to be 3|Page
  • ADMINISTRATION OF TRUST – LAW 556PREPARED BY AHMAD FAROUQ AMIR (2010313869) provided out of the testator’s general estate. It need not form part of the testator’s property at the time of his death. When there is ambiguity in determining the beneficiaries in the will, then the equivocation principle will be applied. This principle is also called latent ambiguity and it arises if a description of the object or the subject matter of the gift is applicable to two or more persons or things. In the uncertainty of subject matter or object is illustrated in the case of Charter v Charter, the testator, T, by his will appointed ‘my son, Forster Charter’ as his executor and gave him residuary estate. He also directed him to pay annuity and allow maintenance to his mother ‘so long as they reside together in the same house’. T had a son named Forster Charter, but this son had died some years before the testator made his will and he could not be the son referred to. At the time the will was made, T had two sons, William Forster Charter and Charles Charter. Probate was granted to William Forster Charter. Charles applied for revocation on the ground that he, Charles, was the person named in the will. The judge admitted evidence of the surrounding circumstances when T made his will. The court found out that Charles was living at home with his parents and working on T’s farm, that William had lived away from home for some years and seldom visited T, and that T did not call him ‘Forster’ but always ‘Wiliam’ or ‘Willie’. The judge decided in favour of Charles. William appealed to the House of Lords. The four members were evenly divided. Lord Chelmsford and Lord Hatherly thought the will was not uncertain or ambiguous. But Lord Cairns and Lord Selborne upheld the decision of the judge. They considered that the provision in the will under which the executor was directed to pay the annuity and follow for maintenance to T’s widow – so long as they reside together in the same house, did not apply to William and so there was uncertainty or ambiguity. Once uncertainty or ambiguity was established, evidence of surrounding circumstances of the testator at the time he made the will could be admitted under the armchair principle and this evidence pointed clearly to Charles and Charles won. 4|Page
  • ADMINISTRATION OF TRUST – LAW 556PREPARED BY AHMAD FAROUQ AMIR (2010313869) 6.2 The Application The gift to Robert’s sister is a house at Nilai Impian. And it was to be given to his favourite sister. Robert had two sisters, Nicole and Margaret. From the facts given, Margaret has been residing in Australia for the last ten years and Nicole lives nearby Robert’s house. In order to advise David of the disposition of the estate in the will, here, uncertainty or ambiguity appear in determining who is the beneficiary of the will. By applying the armchair principle and evidence of circumstances, together with the case of Charter v Charter, obviously Margaret was out of Robert sights for the last ten years and it is hard to see from the eye of a reasonable person how Margaret could be Robert favourite sister for she was way out of bound and distanced from Robert. While Nicole, lives nearby Robert’s house and the words ‘favourite sister’ may fall on her because she is the person whom nearer to Robert than Margaret. 6.3 Conclusion Therefore, to conclude, the house in Nilai Impian should be given to Nicole after evidence of surrounding circumstances been apply by the virtue of the Armchair Principle in the case of Charter v Charter. 7. Third Issue - Whether Joe is entitled to RM 100,000 in Robert’s CIMB account. 7.1 The Law A specifies legacy or specific devise fails by ademption if its subject matter has ceased to exist as part of the testator’s property at his death. However, neither demonstrative nor general legacies fail by ademption. Specific legacy is a gift by will or specified personal estate. General legacy is a gift not of any particular thing, but of something which is to be provided out of the testator’s general estate. Its subject matter may or may not form part of the testator’s property at his death. 5|Page
  • ADMINISTRATION OF TRUST – LAW 556PREPARED BY AHMAD FAROUQ AMIR (2010313869) Demonstrative legacy is a hybrid between specific and general legacy. It is a gift which is general in nature but which is directed to be satisfied primarily out of a specified fund or specified part of the testator’s property. In the case of Ashburner v Macguire where the bequest was of the interest to his sister for life and the principal of the said bond, on the deceased of his sister to her four daughters. The debtor became bankrupt and the testator received a small dividend in his lifetime. There were other dividend paid to the creditors after the testator’s death. There was also in the case a bequest in these words. ‘ I bequeath to Mr Wm, Beauses, my capital stock of 1000 in the India’s Company Stock.’ The testator had exactly 1000 stock at the time of making his will and no more but sold out the whole of it before his death. No legacy arose as to his legacy of the stock. The Lord Chancellor aid no claim countenanced that claim. The legacy was gone. The bequest was considered to be specific of the stock, not pecuniary with reference to a fund. 7.2 The Application In his will, Robert had left RM 100,000 in his CIMB Bank account to his brother, Joe. This is a demonstrative legacy since it is to be satisfied out of the testator’s fund which is Robert’s CIMB saving’s account. However by the virtue of Ashburner v Macguire, since the bequest is specific in nature, that is, Robert’s CIMB savings account. 7.3 Conclusion Joe is only entitled to RM 50,000 not RM 100,000 as specified in the will. This is because, the balance in the CIMB bank account is only RM 50,000. Thus it is not sufficient to pay to Joe the specified amount of the will. This is by the virtue of Ashburner v Macguire and Demonstrative Legacy. 6|Page
  • ADMINISTRATION OF TRUST – LAW 556PREPARED BY AHMAD FAROUQ AMIR (2010313869) 8. Fourth Issue - Whether Kevin is entitled to 10,000 shares. 8.1 The Law It has to be determined whether the shares given by Robert is a specific gift or general gift. Specific Gift is a gift for a special item. It has two characteristic : a) It forms a special part of the testator’s estate at the date of his death b) That specified part of the testator’s estate can be served from the rest of the testator’s estate. A precondition is that the beneficiary should survived the testator in order to take the benefit, or else the gift will lapse. The exeptions to the Doctrine of Lapse, whereby, a gift to a predeceased person will not lapse if he/she left behind an issue. General Gift is a gift not of particular item but of something which is to be provided out of the testator’s general estate. It need not form part of the testator’s property at the time of his death. Section 18 of the Wills Act specifies that wills should be construed to speak from the death of the testator. It is to take effect as it has been executed immediately after the testator death unless a contrary shall appear by the will. 8.2 The Application The 10,000 shares bequeathed to Robert’s brother, Kevin is a general gift since it did not specify the details of share to be given to Kevin. By the virtue of Section 18, Kevin is entitled to the shares since it was Robert’s intention to bequeath the shares irrespective of which ever share. He did not make other intention in his will. 8.3 Conclusion The fact stated that originally Robert had 10,000 shares when he made the will. However he had sold 5000 of the shares in Sime Darby Bhd during his lifetime. Then Robert bought 5000 shares in Nestle thus leaving a remainder of 10,000 shares after his death. Kevin is entitled to this remaining 10,000 shares since 7|Page
  • ADMINISTRATION OF TRUST – LAW 556PREPARED BY AHMAD FAROUQ AMIR (2010313869) Robert did not specify the type of shares to be bequeathed and also by the virtue of it being a general gift and authority from Section 18 of Wills Act. 9. Fifth Issue - Whether Sandra, being Donald’s daughter is entitled to the BMW car. 9.1 The Law It has to be determined whether the shares given by Robert is a specific gift or general gift. Specific Gift is a gift for a special item. It has two characteristic : c) It forms a special part of the testator’s estate at the date of his death d) That specified part of the testator’s estate can be served from the rest of the testator’s estate. A precondition is that the beneficiary should survived the testator in order to take the benefit, or else the gift will lapse. The exeptions to the Doctrine of Lapse, whereby, a gift to a predeceased person will not lapse if he/she left behind an issue. General Gift is a gift not of particular item but of something which is to be provided out of the testator’s general estate. It need not form part of the testator’s property at the time of his death. Section 19 of Wills Act stated that lapse refers to the failure of testamentary gift arising during the death of the devisee or legatee in the testator’s lifetime. Exception to Section 19, is that by the virtue of Section 25 of the Wills Act the gift to the beneficiary who predeceased the testator will not lapse if he leaves behind an issue who will then be the donee of the gift. 9.2 The Application The gift to Donald is a BMW car. Since it is a valuable and form a specific part of Robert’s estate at the date of his death. Since Donald died in April 2009 before Robert who died in June 2009, the Doctrine of Lapse is applicable. Since Sandra is Donald’s daughter, she should be able to receive the gift. 8|Page
  • ADMINISTRATION OF TRUST – LAW 556PREPARED BY AHMAD FAROUQ AMIR (2010313869) However, since Donald is merely a friend and not related to Robert in any way as provided for in Section 25 of the Wills Act, the exception where a gift to a predeceased person shall not lapse if he/she had left behind an issue is not applicable. 9.3 Conclusion Sandra is not entitled to the BMW car bequeathed to Donald even though she is Donald’s daughter. This is because the exception in the Doctrine of Lapse is not applicable by the virtue of Section 25 of the Wills Act since Sandra is Donald’s daughter and Donald died before Robert’s death and Donald did not leave any issue of instrument nor instruction on inheritance. 10. Sixth Issue - Whether James as the witness entitled to RM 60,000. 10.1 The Law There is no strict requirement in terms of the capacity of the witness for a wills for as long as the witness is in mentally sound adult states. Attestation is the term used to describe the act of witnessing o document or will. According to Section 9 of Wills Act, it stated that gifts to an attesting witness or to wife or husband of attesting witness shall be void. In the case of Ross v Caunters, the plaintiff sued the solicitor for professional negligence because he failed to tell him that he cannot be a witness because his wife is a beneficiary. Therefore she received nothing and the solicitor was held negligent. 10.1 The Application James is Robert’s best friend. Due to their friendship Robert bequeathed 9|Page
  • ADMINISTRATION OF TRUST – LAW 556PREPARED BY AHMAD FAROUQ AMIR (2010313869) RM 60,000 to James. By applying the authority from Section 9 of Wills Act, James, as one of the witness the time the will made by Robert, may not be the beneficiary of the estate because he will become a bias witness. Moreover, Judge Russel obiter’s in the case of The Estate of Bravda said that the rule is necessary to assure reliable, unbiased witness. In this case the spouse attested to the will and therefore the will failed to be admitted to probate, so the property will be distributed according to the Distribution Act 1958. 10.2 Conclusion James is not entitled to RM 60,000 even though it was stated in the will because he is also the witness of the will and this is contrary for the principle of capacity of witness which laid in Section 9 of Wills Act and by the virtue of Ross v Caunters. 10 | P a g e
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