Who Can Benefit From An Estate?

Children conceived by artificial insemination or in vitro fertilisation

When distributing to those known to have been conceived by artificial insemination or by in vitro fertilisation the following rules should be kept in mind.

Except for inheritance of titles, and land which devolves with titles, if a child is artificially conceived (that is, as a result of artificial insemination or in vitro fertilisation):

In the case of a couple who are married and not judicially separated, the husband is considered to be the father unless it is proved that he did not consent to the conception;

In the case of treatment provided for a man and woman together, the man is considered to be the father irrespective of whether or not his sperm was used;

The mother is the woman who has carried the child as the result of the placing in her of an embryo or of an egg or sperm.

Although the Human Fertilisation and Embryology (Deceased Fathers) Act 2003 permits a deceased husband or partner to be registered as the father of a child conceived after his death by the use of his sperm, the registration does not give the child any rights of inheritance. (The reason for the rule is to avoid delay in winding up of estates.)

Underage beneficiaries

Unless permitted to do so by the will, neither a person under the age of 18 nor that person’s parent or guardian can give a valid receipt for the capital of a bequest (as opposed to the income it produces) and consequently neither can give a valid discharge for any capital payment made to him. A valid receipt for income produced by a bequest to a person who is under the age of 18 can only be given by that person, or his parent or guardian, if the beneficiary is married or in a registered civil partnership. Accordingly a personal representative should not make any capital payment to a minor, or any income payment to an unmarried minor who is not registered in a civil partnership, unless authorised by the will and should either retain the sum due in the personal representative’s name on behalf of the underage beneficiary until the beneficiary becomes of age, or arrange for it to be paid into court.

If the bequest is retained in the personal representative’s name, it should be invested in authorised investments and designated as in respect of the beneficiary to avoid the possibility of the investments being confused with the personal investments of the personal representative.

Authorised investments are those authorised by the will or other document creating the trust and in addition those permitted by Part II (Sections 3-7) of the Trustee Act 2000. The Act gives trustees and personal representatives (who will for the purpose of conciseness both be referred to as the ‘trustee’) the same powers to invest money as they would have if they owned the monies themselves, but also proved that:

Any restrictions or other provisions contained in the will or other document creating the trust, if dated after 3rd of August 1961, must be complied with

The trustee has a duty to use such skill and care in the choice of investments and advisers as is reasonable, bearing in mind any special knowledge, experience and professional skill of the trustee and the nature and purpose of the trust

In the choice of investments a trustee must bear in mind the need for diversification, that is, he must not put all his investments into a single type

The investments should be kept under review with a view to deciding whether or not they should be varied

Unless it is so appropriate that they should obtain and consider proper advice as to how the power of investment should be exercised and the sustainability of the investments to the trust. It might not be appropriate to take advice if, for example, the trustee himself has the necessary investment skills and knowledge, or if the cost of the advice would be out of proportion to the value of the investments.

Bankrupts

Payment should not be made to a beneficiary who is bankrupt. Before distributing assets check that the creditors and beneficiaries are not bankrupt by making  a search against their names at the Land Charges Registry on Land Registry form K16.

Persons of unsound mind

Similarly, if a bequest has been made to a person who is not believed to be of sound mind, the bequest should not be paid to that person personally but to his deputy appointed by the Court of Protection or to his attorney appointed by an Enduring Power of Attorney made by him before 1st of October 2007 or a Lasting Power of Attorney. In the case of both types of powers of attorney the power must have been registered with the Public Guardian and made before the beneficiary lost his sanity.