Administering the Estate: Obtaining Grant of Probate & Rights of beneficiaries/liabilities of personal representatives Flashcards
(135 cards)
1
Q
What is the role of personal representatives (PRs) after a person’s death?
A
To wind up the estate and gain control of the deceased’s assets to pay debts and pecuniary legacies.
PRs may be the deceased’s executors or family members.
2
Q
What document must PRs obtain to confirm their authority to act?
A
A grant of representation.
This document is necessary for asset holders to release funds.
3
Q
What is the purpose of the grant of representation?
A
It confirms the PRs’ authority and title to the deceased’s assets.
Applications for grants are made to HMCTS.
4
Q
What is IHT, and when may it be payable?
A
Inheritance Tax (IHT) may be payable on larger estates.
A solicitor can advise on IHT liabilities and filing requirements.
5
Q
What forms are associated with applying for grants?
A
Forms PA1P and PA1A.
PA1P is used for grants of probate; PA1A is for simple letters of administration.
6
Q
What is required to identify the personal representatives?
A
Determine if the deceased left a valid will appointing executors or if administrators are needed.
Executors obtain a grant of probate; administrators obtain letters of administration.
7
Q
What authority do executors have before obtaining a grant?
A
Executors have full power to act from the time of death but require the grant for certain transactions.
The grant provides conclusive evidence of their authority.
8
Q
What must solicitors verify regarding the deceased’s will?
A
The will must be valid, not revoked, and executed according to the Wills Act 1837.
An attestation clause is necessary for presumption of due execution.
9
Q
What are the assets that can be accessed without a grant?
A
Assets may include:
* Small payments under the Administration of Estates (Small Payments) Act 1965
* Chattels
* Cash found in the deceased’s possession
These assets do not require a grant for access.
10
Q
What happens to joint property upon the death of one owner?
A
It passes by survivorship to the surviving joint tenant.
No grant is needed for the survivor to claim joint property.
11
Q
What is the process for assessing the IHT position of an estate?
A
Gather details of all assets, attribute value, and determine if an IHT account needs to be submitted.
This assessment informs whether IHT is payable before the grant.
12
Q
What is the fee for applying for a grant if the estate exceeds £5,000?
A
The fee is currently £273.
The fee is expected to rise to £300 in May 2024.
13
Q
What additional documents may be required by HMCTS for the grant application?
A
The deceased’s will and any codicil, plus potential further evidence of validity.
Evidence may include affidavits or witness statements.
14
Q
What may be required if there is doubt about the execution of the will?
A
Evidence from an attesting witness or an affidavit from a doctor regarding the testator’s mental capacity.
This is to ensure that the will was properly executed.
15
Q
What is required to establish that a will has been properly executed?
A
Evidence from an attesting witness
This is necessary when there are doubts about the execution of the will.
16
Q
What may be necessary if there is doubt about the mental capacity of the testator?
A
An affidavit from a doctor
This is helpful if the doctor examined the testator at the time the will was made.
17
Q
What indicates that a testator may not have been aware of the contents of the will?
A
Illiteracy, frailty, or suspicious circumstances
For example, if someone who prepared the will benefits from its terms.
18
Q
What should be included in the attestation clause if the will was read over to the testator?
A
Indication that the will was read or explained to the testator
This helps in proving the testator’s knowledge and approval.
19
Q
What is required if witnesses were not physically present during the signing of the will?
A
Evidence in the form of an affidavit or witness statement
This applies to remote witnessing situations.
20
Q
What should be provided if the state of the will suggests it has been interfered with?
A
Further evidence by way of explanation
This may include an affidavit of plight and condition.
21
Q
What presumption arises when a will known to be in the testator’s possession cannot be found after death?
A
Presumed to have been destroyed with the intention of revoking it
This presumption can be rebutted.
22
Q
What is the IHT 400 required for?
A
To report the estate’s value and calculate inheritance tax payable
It is necessary for non-excepted estates.
23
Q
What must be sent to HMCTS when applying for a grant?
A
The deceased’s will, additional evidence, and probate fee
This applies to the grant application process.
24
Q
What is the threshold for a ‘small’ excepted estate?
A
Gross value does not exceed the nil rate threshold
The current nil rate threshold is £325,000.
25
What must the gross value of an estate be for it to qualify as Category 1 excepted estate?
Must not exceed £325,000 plus specified transfers
## Footnote
This applies to estates where the deceased was UK domiciled.
26
What are 'specified transfers' for excepted estates?
Chargeable transfers made in the seven years before death
## Footnote
This includes cash, personal chattels, and other tangible property.
27
What defines a 'non-domiciled' estate?
Deceased was never domiciled in the UK and owned limited UK assets
## Footnote
This affects the inheritance tax treatment.
28
What is required if an estate is not an excepted estate?
Prepare an IHT400 and supporting schedules
## Footnote
This includes reporting lifetime gifts and other relevant details.
29
True or False: If a will is lost, probate can still be obtained from a copy.
True
## Footnote
A reconstruction or a copy kept in a solicitor’s file may be used.
30
What is the deadline for delivering the IHT400 after the death?
Within 12 months of the end of the month in which the death occurred
## Footnote
PRs aim to deliver within six months to avoid interest.
31
What is Category 2 excepted estate?
Estates where the bulk attracts spouse or charity exemption
## Footnote
Must not exceed £3 million in gross value.
32
What happens if an estate initially appears excepted but is later found not to be?
The PRs must submit the IHT400 within six months of discovery
## Footnote
This ensures compliance with tax regulations.
33
What is the net qualifying value of the estate?
The net value of the estate for IHT less any spouse, civil partner, or charity exemptions.
## Footnote
This value is used to determine the inheritance tax liability.
34
What must be used whenever the deceased dies domiciled in the UK and the estate is not an ‘excepted’ estate?
IHT400 form.
## Footnote
The IHT400 is essential for calculating any IHT payable.
35
How long do HM Courts and Tribunals Service have to pass information to HMRC?
One month.
## Footnote
This is part of the process following the death of an individual.
36
When is inheritance tax (IHT) generally due?
Six months after the end of the month in which the deceased died.
## Footnote
For example, if a person dies on January 10, IHT is due by July 31.
37
What is the due date for IHT on non-instalment option property?
Within six months of the end of the month in which the death occurred.
## Footnote
Late payments attract interest.
38
What happens if PRs elect to pay IHT on property by instalments?
The first instalment is due within 6 months of the end of the month of death, with remaining instalments due annually.
## Footnote
This option applies to certain types of property.
39
What is the tax rate for the balance of an estate exceeding £325,000?
40%.
## Footnote
The first £325,000 is taxed at 0%.
40
What is the formula to calculate IHT on non-instalment option property?
IHT on non-instalment option property = (Value of non-instalment property) x (Total IHT) / (Chargeable estate).
## Footnote
This is used to determine how much IHT is payable before the grant.
41
What options are available for funding IHT payable before the grant?
Options include:
* Direct payment scheme
* Life assurance
* Assets realisable without production of the grant
* Loans from beneficiaries
* Bank borrowing
* National Savings and Government stock
* Heritage property in lieu of tax
* Obtaining a grant on credit.
## Footnote
Various methods exist to manage IHT payments prior to obtaining the grant.
42
What forms are required for paper applications for a grant?
Forms PA1P and PA1A.
## Footnote
PA1P is for valid wills, while PA1A is for intestate cases.
43
What must be included in the application forms regarding the deceased?
Name, address, date of birth, date of death, marital status, and domicile at the date of death.
## Footnote
All names must be included if assets were held in another name.
44
What is the difference between gross probate value and net probate value?
Gross probate value is the total value before deducting debts, while net probate value is after deducting debts and funeral expenses.
## Footnote
This distinction is important for the administration of the estate.
45
What is the maximum value of an asset that may be realised without production of a grant under the Administration of Estates (Small Payments) Act 1965?
£5,000.
## Footnote
This allows for some flexibility in accessing funds without the grant.
46
What must applicants specify regarding the IHT form and probate estate?
Whether an IHT400 was completed and the unique code and estate values provided by HMRC.
## Footnote
This is crucial for determining the probate fee payable.
47
True or False: All applications for letters of administration must be made online.
False.
## Footnote
Certain exceptions allow for paper applications.
48
Fill in the blank: The first instalment of IHT on property must be paid within _______.
6 months of the end of the month of death.
49
What happens if PRs do not elect for instalments on IHT?
IHT must be paid before the grant or within 6 months of the end of the month of death, if earlier.
## Footnote
This is crucial for the grant application process.
50
What is the role of the personal representatives (PRs) in relation to IHT?
PRs calculate the amount of IHT payable and pay any IHT due before the grant.
## Footnote
They are responsible for the administration of the estate.
51
What must applicants confirm in the statement of truth?
They will administer the deceased’s estate in accordance to law and that the content of the form is truthful.
52
What form do executors apply for a grant of probate?
Form PA1P
53
What must be sent to HMCTS when applying for probate?
The original will and any codicils
54
What happens if executors are appointed by a valid will?
They have the best right to take a grant which will be a grant of probate.
55
Can one executor obtain a grant and act alone?
Yes
56
What happens if the only executor lacks capacity to act?
The other executors will take the grant.
57
What is required for a person to renounce their right to take the grant?
They must not have intermeddled in the estate.
58
What form is used to renounce the right to a grant?
Form PA15
59
What is 'power reserved' in the context of executors?
It allows other executors to take out a grant in the future if a vacancy arises.
60
What is the appropriate grant if there is a valid will but no executor able to act?
Letters of administration with will annexed
61
What governs the order of priority for a grant of letters of administration with will annexed?
NCPR 1987, r 20
62
Who has the best right to a grant according to NCPR 1987, r 20?
The executor appointed in the will
63
What must applicants explain when applying for a grant under a lower-ranked category?
They must explain why nobody in a higher category is applying.
64
What can a personal representative of a deceased residuary legatee or devisee apply for?
A grant of letters of administration with will annexed
65
What example illustrates a residuary legatee holding in trust?
Brian and Claire holding residue on trust for Debbie
66
What happens if a partial intestacy arises?
Those entitled to the residue by intestacy rules may apply for a grant.
67
What is the significance of intermeddling for executors?
It means they have accepted their appointment.
68
What happens if an executor is a minor?
Probate can be granted to the adult executor(s) with power reserved to the minor.
69
What is a grant of letters of administration with will annexed used for?
When no executor is able and willing to act.
70
What must an applicant explain to establish entitlement to the residue on intestacy?
Their relationship to the deceased and the absence of a surviving spouse, civil partner, or issue.
71
What is required if the minor is the only executor appointed by the will?
Someone must take the grant on behalf of the minor.
72
What must be stated when clearing off higher categories in Rule 22 in Form PA1A?
The applicant must state that there were no relatives in the higher categories
## Footnote
This is essential to establish entitlement to the grant.
73
Who is entitled to apply for a grant of administration if the deceased died intestate?
The order of entitlement is:
* Surviving spouse or civil partner
* Children and issue of deceased child
* Parents
* Full siblings and their issue
* Half siblings and their issue
* Grandparents
* Whole blood uncles and aunts and their issue
* Half blood uncles and aunts and their issue
## Footnote
This follows the order set out in NCPR 1987, r 22.
74
True or False: Minors can act as administrators.
False
## Footnote
Minors cannot act as administrators or apply for a grant.
75
What happens if there are multiple people entitled to act as administrators?
A grant can be made on the application of any one of them without notice to the others
## Footnote
This applies as long as they are in the same degree of entitlement.
76
Fill in the blank: Where there is a life interest, the court generally requires a minimum of _______ administrators.
two
## Footnote
This is to ensure proper administration, especially when there are minor beneficiaries.
77
What is required in an application if the legacy involves a minor?
At least two administrators must apply for the grant
## Footnote
This is to protect the interests of the minor beneficiary.
78
What is the significance of vested versus contingent interests in applications to the court?
The court prefers applications by beneficiaries with vested interests over those with contingent interests
## Footnote
This ensures that those with more certain claims are prioritized.
79
What is the maximum number of administrators that can be granted letters of administration?
Four
## Footnote
If there are more than four entitled individuals, the grant will not issue to more than four.
80
What must an administrator do if they wish to renounce their right to the grant?
They must use Form PA16 to renounce
## Footnote
Renunciation does not affect their beneficial entitlement.
81
Who can apply for a grant if all persons entitled under the intestacy rules have been cleared off?
A creditor of the deceased or any person who may have a beneficial interest if there is an accretion
## Footnote
This is provided in the intestacy rules.
82
In the case of intestacy, what is the status of step-children regarding entitlement to property?
Step-children are not entitled to any property on intestacy
## Footnote
They cannot take a grant.
83
What is the role of the Treasury Solicitor in intestacy cases?
The Treasury Solicitor can claim bona vacantia on behalf of the Crown if no one has a beneficial interest
## Footnote
This occurs in cases where no relatives are entitled.
84
Example: Who can apply for a grant if David dies intestate survived by his wife Eve and adult son Fred?
Eve and Fred can apply for the grant
## Footnote
They share the estate under the intestacy rules.
85
What must be done if an administrator has predeceased the deceased?
The grant must be applied for by other eligible beneficiaries
## Footnote
This ensures that the estate is still administered properly.
86
87
What are the main duties of personal representatives (PRs)?
To obtain a grant of representation, collect and manage the assets of the estate, ascertain and pay debts and liabilities, and distribute remaining cash and assets according to the will or intestacy rules.
88
What is a caveat in the context of estate administration?
A caveat is a legal notice preventing the issue of a grant until the caveat is removed or ceases to be effective.
89
What is the role of a 'caveator'?
The person lodging or entering a caveat.
90
What is a citation in estate administration?
A citation is a method of forcing a party with a right to the grant to act.
91
What is the purpose of a citation to take probate?
To compel an executor who has lost the right to renounce probate to apply for a grant of probate.
92
What is the executor’s year?
The period of one year from the date of the deceased’s death during which personal representatives are not bound to distribute the estate.
93
What does 'devastavit' mean?
A wasting of assets due to a breach of duty by a personal representative.
94
What must personal representatives account for?
Any unauthorized profit they make from the estate.
95
True or False: Beneficiaries of an unadministered estate have equitable interests in the deceased’s property.
False
96
What can beneficiaries request throughout the administration of an estate?
They can ask to inspect accounts and request information about the administration.
97
What is a general administration order?
An order where the court supervises the PRs, and they cannot exercise their powers without court permission.
98
What is one of the main defenses to a claim for devastavit?
The court's discretion to relieve a PR of personal liability if they acted honestly and reasonably.
99
Fill in the blank: A PR may be liable for _______ if they delay paying debts of the estate, causing additional interest.
maladministration
100
What is the time limit for an unpaid beneficiary to bring a claim to recover a share in an estate?
12 years from the date on which the right to receive the estate accrued.
101
What happens if a PR distributes the estate without knowing of the existence of a beneficiary?
They may be personally liable if the omitted beneficiary later brings a claim, unless they followed proper procedures under s 27 Trustee Act 1925.
102
What is the significance of section 61 of the Trustee Act 1925?
It allows the court to relieve a PR from personal liability if they acted honestly and reasonably.
103
What is required for personal representatives to retain commission from transactions?
Authorization by the deceased’s will, a court order, or consent from all adult beneficiaries.
104
What must PRs provide to beneficiaries before the final distribution of the estate?
Estate accounts showing all the assets, income, and payments made.
105
What is the consequence of a PR intermeddling in the estate?
They may lose the right to renounce probate.
106
What is necessary for a citation to propound a will?
To authenticate the will by obtaining a grant of probate.
107
True or False: Beneficiaries have an automatic entitlement to disclosure of the PRs’ decisions.
False
108
What must PRs do if they refuse a request for accounts?
Anyone interested can apply to the court for an order compelling the PRs to provide an inventory and accounts.
109
What happens if beneficiaries acquiesce to a PR's breach of duty?
They cannot succeed in a claim against the PR.
110
What is the time limit for an unpaid or underpaid beneficiary to bring a claim to recover a share in an estate?
12 years from the date on which the right to receive the estate accrued
111
Is there a time limit for actions for fraudulent breaches of duty by a personal representative (PR)?
No time limit exists for fraudulent breaches of duty or when the PR has taken property for personal use
112
What happens if a PR distributes assets to someone who is not entitled?
The beneficiary may follow the assets into the hands of the recipient
113
What must PRs do before distributing the estate to protect against unknown creditors?
Follow the procedure set out in s 27 Trustee Act 1925
114
What is the limitation period for claims against the deceased's PRs?
Generally six years
115
What is 'devastavit' in the context of PRs?
Loss of assets caused by a breach of their duties
116
What must PRs do regarding the deceased's debts and liabilities?
PRs take on all debts and must perform the deceased's contracts
117
What is the discretion that the court has regarding the removal of PRs?
The court can remove or substitute a PR under s 50 Administration of Justice Act 1985
118
How can PRs be personally liable to creditors?
For devastavit and loss of assets caused by breach of duties
119
What occurs when a testator creates a trust in their will?
It is common to appoint the same people as PRs and trustees
120
What is one key difference between the roles of PRs and trustees?
Trustees can retire; PRs cannot without a court order
121
What marks the transition of PRs to trustees regarding real estate?
Executing an assent to themselves as trustees
122
What occurs when PRs finish the administration of the estate?
They become trustees after paying debts and distributing assets
123
124
What is required for an estate to qualify as an excepted estate?
It must satisfy all conditions stipulated in the Inheritance Tax (delivery of accounts) (excepted estates) regulations 2004.
125
What is the first condition for an estate to be considered an excepted estate?
The deceased died domiciled in the UK.
126
What types of property can be included in an excepted estate?
Only property that passes under the deceased's will, intestacy rules, statutory nomination, survivorship, or a single settlement in which the deceased had a life interest in trust property.
127
What is the maximum value of the fund in a single settlement for it to qualify as part of an excepted estate?
The value must not exceed £150,000.
128
What is the maximum value of non-UK assets that can be included in an excepted estate?
The value must not exceed £100,000.
129
What lifetime chargeable transfers are allowed for an estate to be excepted?
No lifetime chargeable transfers in the seven years before death, other than gifts of cash, quoted shares, personal chattels, or a freehold/leasehold interest in land gifted to an individual.
130
What is the total gross value limit for gifts to qualify under the excepted estate rules?
The total gross value must not exceed £150,000.
131
What is the current tax-free allowance (Nil Rate Band) amount for an estate to qualify as an excepted estate?
The current tax-free allowance is £1,000,000.
## Footnote
Increased to 3M for deaths after 1 January 2022
132
What conditions must be met regarding the net chargeable estate for it to be considered an excepted estate?
The net chargeable estate, after deductions, must not exceed the current Nil Rate Band.
133
Fill in the blank: An excepted estate must not include any lifetime chargeable transfers other than gifts of cash, quoted shares, personal chattels, or a _______.
freehold/leasehold interest in land.
134
True or False: An estate can qualify as an excepted estate if the deceased made chargeable transfers in the seven years before death.
False.
135
What is the exception to the general rule regarding dying domiciled in the UK?
If the deceased was living permanently outside the UK when they died, and the value of relevant UK assets is under 150,000, the estate may still be excepted.
## Footnote
This exception applies specifically to the valuation of UK assets and their impact on the estate's tax obligations.
