Appropriation of property in place of another legacy
Appropriation of property
If a person is entitled to a legacy under someone's will, it may be that they would prefer to have something else instead. They might rather have some other asset belonging to the deceased transferred to them either in full or partial satisfaction of the legacy. This is known as appropriation of property. It most commonly happens when people receive an asset instead of a cash gift. For example:
- someone due to inherit £1,000 wishes instead to receive a painting worth £1,000;
- a person who is left £5,000 in the will may wish to accept a car worth £3,000 together with £2,000 cash; or
- a beneficiary entitled to £2,500 might receive instead shares worth the same amount.
However, it is also possible for an asset to be appropriated when the original legacy was not a monetary one:
- a person receiving a painting worth £1,000 might receive a cash sum instead,
and so on.
The decision to appropriate the property lies with the personal representatives, who:
- cannot appropriate an asset which has been specifically left to another beneficiary, and
- should try to follow the wishes of the testator.
So if they are aware that the testator had particular wishes which might affect the proposed appropriation, for example in a letter of wishes, they would probably honour those wishes. But the best course for you to make any particular stipulations in the will.
Valuation of assets for appropriation
The valuation of the assets is very important, because an appropriation must not result in the beneficiary receiving more than the correct share of the estate.
The personal representatives must use the value of the asset at the time of the appropriation, rather than the value when the testator died. Once the appropriation is made at that value, the beneficiary cannot complain if the asset’s value subsequently changes.
What form does an appropriation take?
There are usually no formal requirements for an appropriation. It is an arrangement between the beneficiary and the personal representatives. However, it is advisable for it to be in writing in case anyone questions it in the future. A deed of appropriation (or memorandum of appropriation) is a suitable way to record such an arrangement.
It is usual for the beneficiary receiving the appropriated property to give their consent, and this should be recorded in the appropriation document. If any of the personal representatives are also beneficiaries of the will, consent of the other beneficiaries should be obtained.