Administration Flashcards
1
Q
What is a personal representative?
A
A person permitted by law to administer Ds estate
2
Q
A PR appointed by a will is?
A
An executor
3
Q
A PR appointed by statute is?
A
An administrator
4
Q
If a person dies intestate, who deals with their estate?
A
An administrator
5
Q
What are the female forms of executor and administrator?
A
Executrix and administratrix
6
Q
What is the court order called that confirms a PRs authority to act?
A
A grant of representation
7
Q
What does a grant of representation confirm?
A
- authority to act
- validity of Ds will, or that they died intestate
8
Q
What does a PR usually need to collect and realise assets?
A
A grant of representation
9
Q
What are the powers conferred by a grant limited to?
A
The assets passing under a will or by intestacy
10
Q
When does an executor have power to act?
A
As an executors power derives from a will, they can act from the date of death
11
Q
Does an executor need to wait for a grant before having power to act?
A
No - an executor can act from the date of death as their power derives from the will
the grant just confirms their authority to act
12
Q
Does an administrator have authority to act without a grant?
A
No - their power derives from the grant so they do not have authority to act without it
13
Q
Even though executors have power from a will, do they usually need a grant?
A
Yes having a grant is usually required for practical reasons - most asset holders require sight of a grant before release
14
Q
What does S25 AEA say about a PRs role?
A
A PR must collect and get in the real and personal estate of the deceased and administer it in accordance to the law - s25 AEA 1925
15
Q
What is a PRs role?
A
To administer the estate of D
16
Q
What statutory duties do PRs have?
A
- the duty to collect assets
- ensure debts are paid
-meet tax liabilities
-distribute assets to beneficiaries
17
Q
Is the role of a PR fiduciary in nature?
A
Yes - all duties of a PR must be performed in accordance with their duty of care
18
Q
How can a person act as a PR?
A
Either though appointment by will or by operation of statutory rules (NCPR 1987)
19
Q
Before transferring a legal title into the name of PRs, do land registry need to see a grant?
A
yes
20
Q
Is a PR automatically a trustee?
A
No but they may be appointed as a trustee, or be a trustee where a statutory trust arises in an intestacy
21
Q
What are the three ways that a solicitor becomes involves in the administration of an estate?
A
- instructed by PRs for advice
- appointed to act as executor
- acting on behalf of a party in a contentious probate matter
22
Q
If a solicitor is advising a PR, who is the solicitors client?
A
The PR is the client, not the estates beneficiaries
23
Q
Who is a professional PR?
A
A solicitor appointed by will to act as executor - their duties are to the beneficiaries and creditors
24
Q
Will a solicitor charge for their services to the estate?
A
Yes
25
What types of contentious matters will solicitors advise on?
-will validity claims
-IPFDA claims for disappointed beneficiaries
26
Are PRs personally liable?
Yes
27
Do PRs have a duty to act within the scope of their power?
Yes
28
What are the duties of a PR before a grant is issued?
1. to dispose of Ds body
2. provide information to HMRC and pay IHT
29
Will a grant be issued before IHT is paid?
No
30
Must PRs notify HRMC about the assets and liabilities in an estate?
Yes
31
What form is used to notify HRMC about the assets and liabilities in an estate?
IHT400
32
What funds can PRs use to pay IHT due?
The estate funds - they are not expected to use their own personal funds
33
What are a PRs duties under a grant?
1. collect and get in the real and personal assets of the deceased and administer the estate according to law
2. provide an inventory and account of the estate assets
34
What are the statutory powers of a PR?
-sell, exchange or lease
-appropriate
-insure
-invest
-charge for PR services
-delegate powers
-appoint trustees
35
Explain a PRs powers to sell exchange or lease
PRs have the power to sell, exchange or lease estate assets
36
Explain a PRs powers to appropriate
PRs can decide which assets to use in satisfaction of a beneficiaries entitlement provided that
1. a specific beneficiary must not be prejudiced
2. consent of the recipient beneficiary is required
3. the value of the asset must be considered at the date of death
37
Explain PRs power to insure
A PR has the power to take out insurance to insure the estate assets comprehensively and for full value - insurance can be paid from estate income or capital
38
Explain PRs power to invest
If PRs hold assets for a period of time, they have a duty to preserve the estate and actively invest
39
Explain PRs power to charge for services
A professional PR (eg solicitor) can charge for services to the estate provided that
1. they are not acting alone
2. co-PRs give consent in writing
When acting alone, a PR would require a charging clause in order to charge for services
40
Can all PRs reimburse themselves for services?
Yes they can reimburse themselves for expenses properly incurred when acting on behalf of the estate - this is not the same as charging for professional services (i.e if they had to turn down work)
41
PRs power to delegate
A PR has a power to delegate work to professionals i.e accountants for tax advice, solicitor
42
Do PRs have power to accept receipt from a minor's parent?
Yes
43
Do PRs have power to run a business?
Yes but limited power (to sell business as a going concern within a year of death)
Wills can sometimes give PRs express powers to run/manage business if it is Ts wishes
44
Where there are joint PRs, should they act unanimously?
Yes
45
Can jointly appointed PRs act alone when selling and transferring assets?
Generally yes
46
Can joint PRs act alone when dealing with stocks and shares?
No
47
PRs liabilities for failing to carry out their duties
PRs are personally liable if they fail to carry out their duties
48
What claims can beneficiaries and creditors bring against PRs for failing to carry out their duties?
A claim for devastavit
49
What can a PR do if they are unsure of their obligations?
Seek guidance from the court under AJA 1985 - and rely on the written legal opinion
50
What should a PR do to avoid the issue of an unknown beneficiary?
S27 notice procedure
publish a notice of their intention to distribute the estate to known beneficiaries 2 months after the date of the notice
1. publish notice in the London gazette
2. publish notice in local newspaper to D
3. any other newspapers that may be relevant (if D had a business elsewhere)
51
What else can a PR do to protect their position from unknown beneficiaries and creditors?
Take out insurance
Benjamin order
52
What is a Benjamin order?
An order that a PR can rely on in the case of known but missing beneficiaries - permitting them to distribute the estate on the basis that the beneficiary has died
53
Exemption of a PRs liability in a will clause
A will may also include an exemption clause which protects a PR from liability
54
What are the 3 main types of grants?
-grant of probate
-grant of letters of administration
-grant of letters of administration with will
55
What assets fall within the powers of a grant?
The assets that PRs have authority to deal with i.e the succession estate
56
When can a grant of probate be used?
1. D left a valid will
2. the will appointed executors
3. at least one of the executors is going to act
57
When can a grant of letters of administration with will be used?
1. D left a valid will
2. the will did not appoint executors who are willing/able to act
58
When can a grant of letters of administration be used?
1. if D died intestate
59
What assets can PRs deal with without a grant?
Assets that fall outside of the succession estate
1. assets that can be distributed under Admin of Estates (small payments) Act 1965
2. personal household items
3. cash
60
Is there a legal obligation to follow funeral wishes in a will?
Not a legal obligation - but a moral one
61
Who will usually arrange the funeral of D and register the death?
Usually the family members but sometimes the PRs
62
Who must locate any wills/codicils?
The PRs - if they cannot locate a will then the intestacy rules will form the basis of the estate distribution
63
Do the PRs compile a list of Ds assets and liabilities?
Yes PRs must compile a list of Ds assets and liabilities and their lifetime transfers
64
What happens if an executor named in the will cannot act?
Providing that there is at least one other executor, the remaining executor may act and apply for a grant
65
What happens if a PR dies after taking out a grant?
The remaining PRs can continue with the administration
Or if the PR was a sole PR, the chain of representation will apply
If the chain of representation cannot operate, a second grant 'grant of letters of administration de bonis non' will be issued
66
What is the chain of representation?
If a PR dies, the executors of their estate automatically become the executor of the original testator as well as the PR that died
67
How is an administrator appointed for an estate with will?
An administrator is appointed under letters of administration (with will) in accordance with NCPR20 - entitlement depends on the provisions in the will
68
For an intestate estate, how is an administrator appointed?
In accordance with NCPR22 - depends on familial relationship with D and entitlement to beneficial interest in their estate
69
What is the maximum number of administrators?
4
70
What is the minimum number of administrators including the exception?
1 - unless there is a minor or life interest in which case 2 are needed
71
Can an unwilling executor renounce probate?
Yes - as long as they have not intermeddled
72
Is an executor arranging a funeral classed as intermeddling?
No
73
What does power reserved for an unwilling executor mean?
They reserve power to act provided another executor takes out a grant
74
Can an executor appoint an attorney to act in their place?
Yes
75
Can an unwilling administrator renounce their right to apply for a grant if they have intermeddled?
Yes - unlike executors who cannot renounce if they have intermeddled
76
Can an unwilling administrator have power reserved?
No
77
Can an unwilling administrator appoint an attorney?
Yes
78
If a PR is unwilling to act what should they do?
Citations - they should take formal steps to give up their right to apply so others can proceed with the administration
79
What is set out in an IHT 400?
The value of Ds assets and liabilities at the date of death
80
When is an IHT400 not required?
Low value or exempt estates - an estate where no IHT is expected to be paid
81
What is the deadline for submitted IHT400?
12 months from the end of the month of death
82
When is the deadline for paying IHT or the first instalment if paying in instalments?
6 months from the end of the month of death
83
How can PRs raise funds to pay IHT?
They can use direct payment schemes or arrange to borrow money from either the beneficiaries or banks
84
Where should estate cash be held?
In PRs bank account and/or law firm client account
85
When is an estate solvent?
When its value sufficiently meets its debts, liabilities and administration expenses
86
Subject to contrary intention in a will, what happens to an asset that bears a charge?
Assets subject to a charge bear the burden of the debt secured to it
87
What is the doctrine of marshalling?
Allows disappointed beneficiaries who had their inheritance reduced to compensate themselves by going against the property which ought to have been used to pay the debts
88
When will PRs pay income tax for the estate?
They will pay income tax in respect of all income generated during the administration of the estate
89
When will PRs pay CGT?
In relation to gains made on the disposal of estate assets during the administration
90
Does death constitute a CGT disposal?
No
91
When are post death gains taxed to PRs?
If the assets are disposed by the PRs during the administration
92
When are post death gains taxed to beneficiaries?
If the beneficiary disposes of the asset after it has been transferred to them
93
Estate accounts - PRs role and signature?
PRs should prepare estate accounts - signing them indicates the end of the administration
