5. Administration: Dealing with the Assets

Question 1

What is the length of the administration period?

Answer 1

Commences at the moment immediately following the death and end when the PRs are in a position to vest the residue of the estate in the beneficiaries, or the trustees if a trust arises under the will or the intestacy rules.

Question 2

What is the term of office for PRs in the context of managing assets and liabilities?

Answer 2

PRs hold office for life

Even if additional assets or liabilities are discovered after the residue has been transferred, the PRs are still required to deal with them.

Question 3

What is the primary duty imposed on PRs as found in s 25 AEA 1925?

Answer 3

PRs must ‘collect and get in the real and personal estate of the deceased and administer it according to the law’.

Question 4

Are PRs liable for losses to thee estate?

Answer 4

A PR who accepts office is personally liable for the loss to the estate resulting from any breach of duty they commit.

Question 5

What is a PR breach of duty known as?

Answer 5

Devastavit - wasted

Question 6

What is the test for PR liability?

Answer 6

Whether there has been a loss caused by a breach of duty, not whether the PR is culpable.

Question 7

Can a PR be relieved from liability for breach of duty?

Answer 7

The court may exercise its discretion if satisfied that the PR ‘has acted honestly and reasonably and ought fairly to be excused for the breach’

Question 8

Apart from the court’s discretionary power to relieve PRs from liability, what can an executor rely on?

Answer 8

A clause in the will providing protection from liability for mistakes made in good faith.

Question 9

Who will a PR be liable to if they fail to administer the estate correctly?

Answer 9

If PRs fail to pay someone who is entitled, they will be personally liable to that person.

Question 10

What are three potential issues that PRs may face in handling an estate?

Answer 10

1. creditors or unknown relatives, such as children born outside marriage whose existence has been kept secret.
2. may not know the whereabouts of some beneficiaries who may have lost contact with the deceased’s family.
3. could be a successful claim against the estate under the Inheritance (Provision for Family and Dependants) Act 1975.

Question 11

What are the duties of a PR before a grant of probate or letters of administration?

Answer 11

1. Duty to provide information for IHT purposes
2. Duty to dispose of the deceased’s body

Question 12

What is the disadvantage of applying for a Benjamin order?

Answer 12

it is expensive - a lot of due diligence required and no guarantee of success.