Investment of funds to provide for legacies and interest, Financial Accounting

INVESTMENT OF FUNDS TO PROVIDE FOR LEGACIES AND INTEREST ON LEGACIES

(a) Where a general legacy is given for life, the sum bequeathed shall, at or before the end of a year after the death of the testator, be invested in any authorised investment; however, when an annuity is given and no fund is charged by the will with its payment, or appropriated by the will to answer it, a sum sufficient to produce the annuity shall be invested in any authorised investment.

(b) Where a general legacy is given to be paid, at a future time, the personal representative shall invest a sum sufficient to meet it in any authorised investment.  The intermediate interest from the investment shall, unless expressly or by implication be payable to the legatee or another, form part of the residue of the testator's estate.

(c) Where a gift is contingent, the personal representatives shall not be bound to invest the amount of the legacy, but may transfer the whole residue of the estate to the residuary legatee, if any, on his giving sufficient security for the payment of the legacy if and when it becomes due.

(d) Where a testator has given any property to a person for life without any direction to invest it in any particular securities, so much thereof as is not at the time of the testator's death invested in an authorised investment, shall be converted into money and invested in such an investment.  Until conversion and investment are completed as above, the person, who would for the time being be entitled to the income of the fund when so invested, shall receive interest at 6% per annum upon the market value at the testator's death of such part of the fund as has not been so converted and invested.

(e) A contingent of future, as well as an immediate specific legacy and a residuary bequest not contingent in its terms of property, whether immovable or movable, shall carry the intermediate income of that property from the death of the testator, except so far as the income, or any part thereof, may be otherwise expressly disposed of.

(f) Where no time has been fixed for the payment of a general legacy, interest shall begin to run from the expiration of one year from the testator's death; where a time has been fixed for payment, interest shall begin to run from the time fixed.  In either case, the interest up to that period shall form part of the residue of the testator's estate.  However, interest shall run from the death of the testator where:

  • The legacy is bequeathed in satisfaction of a debt; or
  • The testator was a parent or more remote ancestor of the legatee or has put himself in the place of the parent of the legatee, and the legatee is a minor, and no specific sum is given by the will for maintenance; or
  • The legacy is bequeathed to a minor with a direction to pay for his maintenance thereout.

 

(g) No interest shall be payable on the arrears of an annuity within the first—year from the death of the testator although a period earlier than the expiration of that year may have been fixed by the will for making first payment of the annuity.

(h) Where a sum of money is directed to be invested to produce an annuity, interest shall be payable on that sum from the death of the testator until so invested.

Posted Date: 12/13/2012 4:50:59 AM | Location : United States







Related Discussions:- Investment of funds to provide for legacies and interest, Assignment Help, Ask Question on Investment of funds to provide for legacies and interest, Get Answer, Expert's Help, Investment of funds to provide for legacies and interest Discussions

Write discussion on Investment of funds to provide for legacies and interest
Your posts are moderated
Related Questions
On January 1, 2012, Osborn Company sold 12% bonds having a maturity value of $800,000 for $860,651.79, which provides the bondholders with a 10% yield. The bonds are dated January

Robin Corporation accepted credit cards for $34,200 of services performed in October 2011.The credit card company charged a 3% service fee and paid Robin as soon as it received the

Adjusting Entries Clapton Guitar Company entered into the following transactions during 2013. [The transactions were properly recorded in permanent (balance sheet) accounts unless

Select two of the following firms: Dole Foods, Campbell Soup, Hershey and Dr. Pepper Snapple. Use the 10-K, annual report and other information to answer the following questions.

Q. Explain about Tax Ramifications? i) Exercise price effects capital gains of individual and effects compensation expense used by corporation for calculating company's compens

Cashflows from financing activities Financing activities are those activities that will lead to either an increase or decrease in shareholders funds and long-term liabilities.

Q. Explain about Short-term bank loans and Overdrafts? Short-term bank loans and Overdrafts. The symptom are that Vertid is unlikely to obtain further finance from its bank alt

Illustrations of Accounting Policies A Ltd., has decided to change its policy of writing off borrowing costs to capitalizing the same. As at 31st December, 2003, the company had

A company's sales are 50% in cah and 50% on credit. 70% of the credit sales are colected in the month of the sale, 20% in the month following the sale, and 5% in the second month f

Q. Show example of Internal rate of return? IRR (Internal rate of return) is a discounted cash flow investment appraisal method that calculates the discount rate which causes th