Administration - Preliminary Steps

Question 1

What is the purpose of preliminary steps in estate administration?

Answer 1

To prepare for the grant of representation by identifying the deceased’s assets, liabilities, will, and beneficiaries, and to ensure the estate is secured.

Question 2

Is funeral cost deductible for IHT purposes?

Answer 2

Yes, it is a post-death administration expense and may reduce the value of the estate for IHT.

Question 3

Why must PRs secure the estate after death?

Answer 3

To prevent loss or damage. PRs are personally liable for any failure to preserve the value of estate assets.

Question 4

Why must PRs obtain the original will and codicils?

Answer 4

A copy is insufficient to obtain a grant unless authorised by the Probate Registry.

Question 5

Why must PRs compile a schedule of assets and liabilities?

Answer 5

To:
- Calculate IHT
- Determine solvency
- Identify each beneficiary’s entitlement
- Obtain the grant of representation

Question 6

What is the valuation method for quoted shares?

Answer 6

Use the low price plus ¼ of the difference between the high and low prices from the Daily List.

Question 7

What types of assets need to be valued?

Answer 7

• Bank accounts and investments
• Chattels and personal items
• Shares (quoted and unquoted)
• Business interests
• Real property

Question 8

What must PRs do about the deceased’s debts?

Answer 8

Identify, verify, and ensure they are repaid from the estate. Debts reduce the value of the estate for IHT.

Question 9

When might a debt not be deductible for IHT?

Answer 9

• If borrowed to buy an excluded asset
• If it is never repaid from estate funds

Question 10

What information must PRs gather about lifetime transfers?

Answer 10

• Nature and value of the gift
• Date made
• Identity of the recipient