4. Administration: Obtaining the Grant Flashcards
(42 cards)
What is a grant of representation?
official document confirming PR’s authority to administer estate + their title to the deceased’s assets.
How can a PR apply for a grant of representation?
to HMCTS and can instruct a solicitor to do it
In larger estates, what role can a solicitor play regarding Inheritance Tax (IHT)?
grant of representation
A solicitor can advise on
* whether IHT is payable in larger estates
* whether it is necessary to send an account (IHT400) to HMRC, and
* whether some of the IHT has to be paid before the grant is obtained
What are the 6 steps to the initial assessment of obtaining a grant of representation for PRs?
- Identify PRs
- Identify beneficiaries
- Obtain details of estate debts/expenses
- Determine which assets will not require a grant
- Assess IHT on estate
- Prepare the application for the grant
What are the two types of a personal representative?
Step 1 of initial assessment
- Executors
- Intended administrators
What grant is obtained for a valid will which appoints executors and who obtains it?
Step 1 of initial assessment
Grant of probate obtained by the executors
What grant is obtained for a valid will with no executors and who obtains it?
Step 1 of initial assessment
Grant of letters of administration with the will annexed, obtained by the administrators.
Administrators: usually residuary beneficiary
What grant is obtained when no valid will left and who obtains it?
Step 1 of initial assessment
Grant of simple letters of administration, obtained by the administrators.
Administrators: main beneficiaries on intestacy
Can one PR obtain a grant and act alone?
Step 1 of initial assessment
Yes
What is one key difference between executors and administrators concerning the requirement for multiple individuals to act?
Step 1 of initial assessment
Executors can act alone in cases where a beneficiary is an infant or has a life interest, while administratorsmrequire two individuals to act in such situations.
What is the effect of a grant of probate?
Step 1 of initial assessment
Confirms executors authority to administer the estate and is proof of entitlement to act.
What is the effect of a grant of letter of administration?
Step 1 of initial assessment
Vests the deceased’s property in the administrators.
What are the necessary requirements for a will to be valid and not raise intestacy and a grant of simple letters of administration?
Step 2 of initial assessment
- the will is the last will of the testator;
- that it has not been validly revoked;
- that it is executed in accordance with the Wills Act 1837, s 9; and
- that it contains an attestation clause
If there is a will, what must the solicitor establish with regards to the beneficiaries?
Step 2 of initial assessment
- the identity of the beneficiaries
- the nature and extent of their entitlements
- if any gifts failed (lapse/ademption)
If the deceased is intestate, what must the solicitor establish with regards to the beneficiaries?
Step 2 of initial assessment
- which members survived
- advise on distribution accordingly
To comply with data protection rules what must the solicitor do with regards to beneficiaries?
Step 2 of initial assessment
inform the beneficiaries:
* that they hold personal date on them
* the use of purpose for data
* their rights as data subjects
What role does a solicitor play in gathering information about the deceased’s property and debts?
Step 3 of initial assessment
The solicitor will request details of the deceased’s assets from the PRs and collect relevant documents like building society passbooks and share certificates.
How can you obtain the balances of a deceased person’s bank and building society accounts and the amount due on life policies?
Step 3 of initial assessment
by writing to the respective asset holders.
When dealing with a deceased person’s assets, where can you obtain valuations for different types of property?
Step 3 of initial assessment
Residence and household contents: Consult an estate agent or auctioneer.
Unquoted shares: Seek a valuation from an accountant.
What assets may pass to the PRs without a grant?
Step 4 of initial assessment
- Small Payments Act - cannot exceed £5000 + discretionary (if refused PR must apply for grant)
- Chattels - can be sold without a grant
- Cash - found in deceased’s possesion (not in bank, ie at home)
What assets do not pass to the PRs at all and their effect on a grant?
Step 4 of initial assessment - Give examples
Assets that don’t pass under will/intestacy and do not vest PRs, so grant is irrelevant
Examples:
* Joint property (survivorship applies)
* Insurance policies assigned/writen in trust (beneficiary can claim with death certificate no grant required)
* Pension benefits (death certificate only)
What steps follow the gathering of details and valuations of a deceased person’s assets?
Step 5 of initial assessment
Once all the deceased’s assets are documented and valued, the next steps include:
* Calculating any IHT payable on the estate.
* Determining whether it’s necessary to submit an IHT account to HMRC or if it qualifies as an excepted estate.
What is the process for paying Inheritance Tax (IHT) when it’s due before the grant of probate is obtained?
Step 5 of initial assessment
If IHT is payable before the grant is obtained, the process involves:
1. PRs sending the IHT account (IHT400/IHT401) and paying any IHT due to HMRC.
1. HMRC emailing a receipt (IHT421) to HMCTS.
1. Informing the PRs or their solicitor that the payment has been completed.
What is the difference between IHT400 and IHT401?
Step 5 of initial assessment
IHT400 for a person domiciled in the UK
IHT401 is for a person domiciled outside the UK
