Chapter 2: Basic Concepts of Succession

Introduction to Basic Concepts of Succession:

It is important to realize that the laws on succession and estate taxation deal with serious matters of life and death.
Matters of life and death bring forth strong human emotions. Lawyers know from experience that no matter how strong
a human beingmay seem, when asked about the death of loved ones or friends that occurred years before, may
suddenly burst into tears. As we study these laws, we should develop a genuine compassion, empathy, and sympathy for
our fellow human beings and the matters of life and death.

Every country has laws governing their ways in which property passes on the death of the owner who dies without a will.
An "estate" is the sum total of all the property of a deceased individual. That property passes to the deceased's heirs at
law, if he without a will, or to his beneficiaries under his will.

SUCCESSION
Succession, in legal terms, encompasses the intricate process through which the rights and interests in a person's
property are transferred to others following their demise. This transfer may be guided by the individual's testamentary
intentions expressed in a will or, in the absence of such a document, by the laws of intestacy. Understanding the basic
concepts of succession is crucial for navigating the legal landscape surrounding the posthumous distribution of assets
and the transmission of ownership.

Succession comes in various forms, and its classification depends on different factors, such as the source of law
governing the transfer of assets, the presence or absence of a will, and the specific rules applied.

Here are the primary kinds of succession:

1. Testamentary Succession:

 Definition: This form of succession occurs when the transfer of assets is based on the provisions of a
valid will left by the deceased person.

 Key Points:

 The deceased individual, known as the testator or testatrix, articulates their wishes regarding the
distribution of their estate.

 The will typically names an executor who is responsible for carrying out the testator's
instructions.

2. Intestate Succession:

 Definition: Intestate succession takes place when a person dies without leaving a valid will, and the
transfer of assets is guided by the laws of intestacy.

 Key Points:

 The distribution of the deceased person's estate is determined by statutory rules that vary
depending on the jurisdiction.

 Heirs, usually close relatives, inherit the assets in a prescribed order set by the laws of intestacy.

3. Partial Intestacy:

 Definition: This occurs when a person dies with a valid will, but the will does not cover the entire estate,
or some provisions are deemed invalid.

 Key Points:
  The assets not addressed by the will are subject to intestacy rules.

 The valid portions of the will are executed, and the remaining assets are distributed according to
intestate succession laws.

4. Universal Succession:

 Definition: Universal succession is a concept where one person or entity succeeds to all the rights and
obligations of the deceased without the need for a specific transfer of individual assets.

 Key Points:

 Commonly seen in corporate law, where a company's identity and ownership continue
seamlessly despite changes in shareholders or stakeholders.

5. Legal Succession:

 Definition: Legal succession involves the transfer of assets according to the laws and regulations in place
at the time of the individual's death.

 Key Points:

 The legal system dictates the rules and procedures for the distribution of assets.

 The principles of legal succession can include both testamentary and intestate succession.

6. Voluntary Succession:

 Definition: Voluntary succession occurs when a person voluntarily transfers their assets during their
lifetime through mechanisms such as gifts or inter vivos transfers.

 Key Points:

 The individual retains control over the transfer and may choose to distribute assets while alive.

 This form of succession contrasts with the involuntary nature of succession after death.

7. Irregular Succession:

 Definition: Irregular succession refers to situations where the standard rules of succession may not
apply, often due to specific legal provisions or unique circumstances.

 Key Points:

 Examples may include special rules for particular types of assets or unique family situations that
deviate from standard succession principles.

8. Contractual Succession:

 Definition: Contractual succession involves the transfer of assets based on contractual agreements, such
as life insurance policies or specific contractual arrangements made during the individual's lifetime.

 Key Points:

 The terms of the contract dictate how assets are transferred, potentially outside the scope of
regular testamentary or intestate succession.

Understanding these kinds of succession is essential for individuals engaged in estate planning, legal professionals, and
anyone involved in the settlement of an estate. The specific kind of succession applicable depends on factors such as
legal frameworks, individual choices, and the presence or absence of a valid will.
ELEMENTS OF SUCCESSION

Succession involves the transfer of rights and obligations from a deceased person to others, and it
encompasses several essential elements.

These elements are crucial in understanding the legal and practical aspects of the succession process.

1. Deceased Person (Decedent):

 Definition: The individual who has passed away and whose assets and liabilities are subject to the
succession process.

 Role: The decedent's identity, relationships, and estate planning decisions significantly impact the
succession proceedings.

2. Heirs or Beneficiaries:

 Definition: Individuals or entities designated to receive the decedent's assets as outlined in a will or
determined by the laws of intestacy.

 Role: Heirs may be family members, friends, organizations, or others named in the will or identified
through statutory rules.

3. Assets and Liabilities (Estate):

 Definition: The collective term for all the property, possessions, and debts left by the decedent.

 Role: The estate is the subject of distribution among heirs, and liabilities may need to be settled during
the succession process.

4. Will or Testament:

 Definition: A legal document in which the decedent expresses their wishes regarding the distribution of
their assets after death.

 Role: A will guides the succession process, naming heirs, appointing an executor, and specifying the
terms of asset distribution.

5. Executor or Administrator:

 Definition: An individual appointed to manage the estate and oversee the distribution of assets, either
named in the will (executor) or appointed by the court (administrator) in cases of intestacy.

 Role: The executor or administrator ensures the decedent's wishes are carried out, debts are settled,
and assets are distributed appropriately.

6. Probate Court:

 Definition: A court with jurisdiction over the validation of wills, appointment of executors, and
supervision of the distribution of assets.

 Role: The probate court oversees the legal aspects of the succession process, ensuring the validity of the
will and the proper administration of the estate.

7. Laws of Intestacy:

 Definition: Legal rules that govern the distribution of a decedent's assets when there is no valid will.
  Role: In the absence of a will, these laws determine the hierarchy of heirs and the manner in which
assets are distributed.

8. Inheritance Tax and Estate Tax:

 Definition: Taxes imposed on the transfer of assets either to heirs (inheritance tax) or on the estate itself
before distribution (estate tax).

 Role: These taxes can impact the overall value of the estate and the amount received by heirs.

9. Legal Formalities and Procedures:

 Definition: Specific legal requirements and procedures that must be followed during the succession
process, such as the validation of the will, submission of legal documents, and court proceedings.

 Role: Compliance with legal formalities ensures the validity of the succession process and protects the
rights of heirs.

10. Living Will and Advance Healthcare Directive:

 Definition: Legal documents specifying the decedent's preferences regarding medical treatment and
appointing someone to make healthcare decisions in case of incapacitation.

 Role: These documents provide guidance on healthcare decisions and may impact the overall succession
process.

11. Creditor Claims:

 Definition: Claims made by creditors to recover debts owed by the decedent from the estate.

 Role: The estate's assets may be used to settle legitimate creditor claims before distribution to heirs.

Understanding these elements is essential for individuals engaged in estate planning, legal professionals overseeing the
succession process, and heirs navigating the complexities of settling an estate. Each element plays a crucial role in
shaping the legal and financial landscape of succession.

EXECUTORS AND ADMINISTRATORS

In taxation, executors and administrators play significant roles in managing the financial affairs of a deceased person's
estate. Their responsibilities include handling tax matters, filing returns, and ensuring compliance with relevant tax laws.

Here's an overview of the roles of executors and administrators in taxation:

1. Executor:

 Definition: An executor is an individual appointed by the deceased person in their will to administer the
estate after their death. The executor's role includes managing assets, paying debts, and distributing
remaining assets to beneficiaries.

 Tax Responsibilities:

 Filing Tax Returns: The executor is typically responsible for filing the final income tax return
(Form 1040) on behalf of the deceased for the tax year of their death.

 Estate Tax Return: If the estate's value exceeds the applicable threshold, the executor may need
to file an estate tax return (Form 706) to report and pay any estate taxes owed.

2. Administrator:
  Definition: An administrator is an individual appointed by the court to administer the estate when there
is no valid will (intestate succession) or when the appointed executor is unable or unwilling to serve.

 Tax Responsibilities:

 Similar to Executor: Administrators have similar tax responsibilities as executors, including filing
the final income tax return and, if applicable, an estate tax return.

TESTAMENTARY SUCCESSION
Testamentary succession refers to the legal process through which a person's assets and properties are
distributed after their death according to the terms specified in their will. This type of succession is guided by
the deceased individual's last will and testament, which outlines their wishes regarding the distribution of their
estate, appointment of an executor, and other relevant matters.

Testamentary succession provides individuals with the opportunity to express their wishes regarding the
distribution of their assets, ensuring that their estate is managed and distributed according to their desires after
their death. It is a fundamental component of estate planning and involves legal processes to safeguard the
rights of beneficiaries and uphold the intentions of the testator.

Here are key aspects of testamentary succession:

1. Will and Testament:

 Definition: A will is a legal document that expresses an individual's intentions and instructions
for the distribution of their assets upon their death.

 Content: The will typically includes provisions naming heirs or beneficiaries, appointing an
executor, specifying the distribution of assets, and addressing other relevant matters.

2. Testator/Testatrix:

 Definition: The person who creates and executes the will is known as the testator (if male) or
testatrix (if female).

 Role: The testator's wishes, as outlined in the will, serve as the guiding document for the
testamentary succession process.

3. Executor:

 Definition: The executor is an individual named in the will by the testator to carry out the
instructions specified in the will.

 Role: The executor manages the estate, pays debts and taxes, and oversees the distribution of
assets to beneficiaries in accordance with the will.

4. Beneficiaries:

 Definition: Beneficiaries are individuals, organizations, or entities named in the will to receive
specific assets or a share of the estate.

 Role: Beneficiaries inherit the assets according to the terms outlined in the will.

5. Probate Process:
  Definition: The probate process is the legal procedure through which the court validates the
authenticity of the will and ensures that the deceased person's wishes are carried out.

 Role: During probate, the court appoints the executor, verifies the validity of the will, and
oversees the distribution of assets. CAPACITY AND INTENT TO MAKE A WILL

CAPACITY AND INTENT TO MAKE A WILL

The capacity and intent to make a will are critical factors in determining the validity of a
testamentary document. For a will to be legally binding, the person creating it (the testator or
testatrix) must possess the mental capacity to understand the consequences of making a will
and must do so with the genuine intent to express their wishes regarding the distribution of
their assets.

Here are key considerations regarding capacity and intent to make a will:

A. Capacity to Make a Will:

Definition: Capacity refers to the mental and legal ability of an individual to make decisions, especially
those related to a will.

Requirements:

 Understanding Nature and Extent: The testator must understand the nature and extent of
their assets and the act of making a will.

 Comprehending Relationships: The testator should comprehend the relationships with family
members and the potential beneficiaries.

 Being Free of Undue Influence: The testator must be free from undue influence or coercion
when making decisions about the will.

B. Legal Presumption of Capacity:

 Default Presumption: There is a legal presumption that individuals have the capacity to make a
will unless proven otherwise.

 Challenges to Capacity: Challenges to the capacity often arise in cases of advanced age, mental
illness, or other impairments.

C. Medical and Legal Assessments:

 Medical Evaluation: In some cases, a medical professional may be involved to assess the mental
capacity of the testator.

 Legal Assessment: Legal professionals may also assess the testator's capacity, and their
opinions may be considered in legal proceedings.

D. Intent to Make a Will:

 Definition: The testator must have a genuine intent to create a will and express their wishes
regarding the distribution of their assets.

 Voluntariness: The testator should make decisions freely, without being coerced or unduly
influenced by others.
  Specific Instructions: The will should contain specific instructions reflecting the testator's
wishes.

E. Knowledge of Assets and Beneficiaries:

 Asset Awareness: The testator should be aware of the nature and extent of their assets,
including property, possessions, and financial resources.

 Understanding Beneficiaries: The testator must understand who the potential beneficiaries are
and their relationships with them.

F. Free Will and Voluntariness:

 Expression of Free Will: Making a will should be an expression of the testator's free will and
personal wishes.

 Absence of Coercion: The testator should not be under duress or subject to coercion when
creating the will.

G. Undue Influence and Fraud:

 Undue Influence: If a person is coerced or unduly influenced by someone to make changes to

the will, it may render the will invalid.

 Fraudulent Activity: Fraudulent activities, such as misrepresentation, can also impact the
validity of the will.

H. Revocation and Changes:

 Revocation: The testator has the right to revoke or cancel a will at any time before their death.

 Changes and Amendments: If the testator wishes to make changes, they can do so through the
execution of a new will or a codicil.

I. Legal Assistance:

 Professional Guidance: Legal professionals, such as attorneys, play a crucial role in ensuring
that the testator understands the legal implications of their decisions.

 Witnesses and Formalities: Legal professionals can guide the testator in adhering to
formalities, including the presence of witnesses and the proper execution of the will.

Ensuring that a testator has both the capacity and genuine intent to make a will is essential for upholding the
validity and legality of the testamentary document. Legal challenges may arise if there are concerns regarding
the testator's mental state, voluntariness, or the presence of undue influence. Legal professionals and witnesses
play significant roles in verifying and safeguarding the capacity and intent aspects of the testamentary process.

CAPACITY TO SUCCESS BY WILL OR BY INTESTACY

The capacity to succeed by will or intestacy refers to an individual's legal and mental ability to inherit property
or assets either through a valid will or, in the absence of a will, through the laws of intestacy. This capacity
involves understanding the legal implications of inheritance and complying with the requirements set forth in
the applicable legal framework.
Ensuring that an individual has the capacity to succeed by will or intestacy involves legal and mental
considerations. Legal professionals play a crucial role in guiding individuals through the process, ensuring
compliance with legal requirements, and safeguarding the individual's rights and choices in the context of
succession.

Here are key considerations regarding the capacity to succeed by will or intestacy:

1. Capacity to Succeed by Will:

 Testamentary Capacity: To succeed by will, an individual must have testamentary capacity, also
known as the capacity to make a valid will.

 Requirements:

 Understanding: The person must understand the nature and extent of their property.

 Understanding Relationships: They should comprehend the relationships with family

members and potential beneficiaries.

 Free from Undue Influence: The individual must make decisions freely, without undue
influence or coercion.

2. Requirements for a Valid Will:

 Legal Formalities: The will must be executed in accordance with legal formalities, including the
presence of witnesses and compliance with jurisdiction-specific requirements.

 Sound Mind: The testator must be of sound mind when creating the will, ensuring that they
have the mental capacity to make decisions.

3. Medical and Legal Assessments:

 Medical Evaluation: In some cases, a medical professional may assess the mental capacity of
the individual to create a will.

 Legal Assessment: Legal professionals may also evaluate the individual's capacity, especially if
there are concerns or challenges.

4. Capacity to Succeed by Intestacy:

 Intestacy Laws: In the absence of a valid will, an individual's estate is distributed according to
the laws of intestacy.

 Automatic Heirship: Intestacy laws designate automatic heirs, typically based on familial
relationships such as spouses, children, parents, and siblings.

FORMS OF WILLS

Wills are legal documents that express an individual's wishes regarding the distribution of their assets and the
handling of their affairs after death. There are various forms of wills, each serving specific purposes and
meeting different needs.

Here are common forms of wills:

1. Simple Will:
  Definition: A straightforward document that outlines the distribution of assets, appoints an
executor, and may designate guardians for minor children.

 Applicability: Suitable for individuals with relatively uncomplicated estates and straightforward
wishes.

2. Testamentary Trust Will:

 Definition: Includes provisions for the creation of one or more trusts upon the testator's death,
allowing for more complex asset distribution.

 Applicability: Beneficial for those with substantial assets, complex family situations, or specific
wishes for ongoing management of assets.

3. Joint Will:

 Definition: A single will created by two individuals, typically spouses, outlining how their assets
will be distributed after both of their deaths.

 Applicability: Less common today due to potential complications and restrictions on the
surviving spouse's ability to change the terms.

4. Living Will (Advance Healthcare Directive):

 Definition: Addresses healthcare decisions in the event the individual becomes incapacitated,
specifying medical treatments and end-of-life preferences.

 Applicability: Focuses on healthcare rather than asset distribution; important for individuals
wishing to convey medical wishes.

5. Pour-Over Will:

 Definition: Coordinates with a living trust, directing that any assets not already in the trust be
transferred to it upon the testator's death.

 Applicability: Often used in conjunction with a revocable living trust for efficient estate
planning.

6. Holographic Will:

 Definition: A handwritten will, entirely created, dated, and signed by the testator, which may or
may not require witnesses.

 Applicability: May be accepted in some jurisdictions, but the legality depends on the specific
requirements of each jurisdiction.

7. Nuncupative Will (Oral Will):

 Definition: A verbal will declared orally in front of witnesses and typically limited to specific
situations, such as imminent peril of death.

 Applicability: Often subject to strict conditions and may not be recognized in all jurisdictions.

8. Conditional Will:
  Definition: Takes effect only under specific conditions outlined in the will, such as the
occurrence of a certain event.

 Applicability: Suitable for individuals with specific concerns or contingencies that may impact
the distribution of assets.

9. Mirror Will:

 Definition: A pair of nearly identical wills made by two individuals, usually spouses, leaving their
assets to each other and, ultimately, to the same beneficiaries.

 Applicability: Commonly used by couples with similar estate planning goals.

10. Mutual Will:

 Definition: A pair of wills created by two individuals (usually spouses) containing agreements
not to revoke or change the terms without the other's consent.

 Applicability: Provides assurance and agreement between the parties to maintain consistent
terms.

11. Statutory Will:

 Definition: A will created using a pre-approved form provided by statute, often used when an
individual cannot create a conventional will due to physical or mental limitations.

 Applicability: Useful for individuals facing challenges in expressing their wishes in traditional
ways.

12. Ethical Will (Legacy Letter):

 Definition: A document expressing values, beliefs, life lessons, and personal wishes rather than
specific distribution of assets.

 Applicability: Focuses on passing down non-material aspects of the individual's legacy.

Choosing the appropriate form of a will depends on individual circumstances, preferences, and the complexity
of the estate. Legal advice is essential to ensure that the chosen form complies with applicable laws and
effectively reflects the testator's wishes.