Administration - Distribution and Estate Accounts Flashcards
(16 cards)
When can PRs distribute estate assets to beneficiaries?
Once debts, funeral, testamentary and administration expenses are paid or adequately reserved for.
What is the order of priority for distributions?
- Specific legacies
- General legacies
- Residuary estate
What are interim distributions?
Early payments to residuary beneficiaries before finalising the administration, with a balancing payment at the end.
Who pays the transfer costs for estate assets?
The beneficiary, unless the will states otherwise.
What deadlines may cause PRs to delay distribution?
- IPFDA 1975 claim: wait 10 months from grant
- s.27 TA 1925: wait 2 months for notices to unknown creditors
How do legacies abate if the estate is insufficient?
In reverse order of priority:
- Residue abates first
- Then general legacies
- Specific legacies abate last
What is appropriation?
PRs transferring an asset in satisfaction of a beneficiary’s entitlement
Can PRs appropriate an asset worth more than the beneficiary’s entitlement?
No—unless the beneficiary consents and the PRs cover the difference or seek repayment.
What if the asset value is less than the beneficiary’s entitlement?
PRs must make a balancing payment in cash.
How is the residuary estate calculated?
Gross estate minus debts, expenses, and legacies.
When can PRs ascertain the final residue?
Only after all liabilities (including final taxes and legal fees) have been settled.
What must PRs do when making final distributions?
- Obtain receipt from beneficiaries
- Use appropriate methods (e.g. assent, cheque)
Can minors give valid receipt for distributions?
No. Options include:
- Clause in will permitting receipt at age 16 or 17
- Receipt from a parent/guardian
- PRs holding assets until age 18
- Appointing trustees under
- Paying into court
What is the PRs’ duty regarding accounts?
To keep records of estate assets, liabilities, and distributions—commonly referred to as estate accounts.
Who should sign the estate accounts?
All PRs and residuary beneficiaries to confirm agreement and mark the end of the administration.
Can a minor give valid receipt?
No—PRs must:
- Use a parent/guardian
- Hold property until age 18
- Appoint trustees
- Pay into court
- Use an express will clause allowing 16–17-year-olds to give receipt
