Personal Representatives and Application for Grant

Question 1

What is the role of a PR?

Answer 1

To administer the estate of the deceased, for example by collecting in their assets and distributing them in accordance with the will / intestacy rules, paying any remaining taxes etc.

Question 2

What are some of the characteristics of the PR role?

Answer 2

• Legal title to the estate;
• fiduciary duty
• statutory duties and must act in accordance with will
• appointment for life
• personal liability to creditors and beneficiaries for breach of duty / acting outstide powers.

Question 3

In which cases should a PR appoint a trustee?

Answer 3

• When directed to by the will (i.e will creates a trust);
• where there is a minor beneficiary (under 18) who cannot give good receipt = requires 2 trustees.
• Where there is intestacy = need not appoint trustee BUT PR holds estate on trust.

Question 4

What are the statutory duties of the PR?

Answer 4

1. Notify HMRC of the assets and liabilities of the estate using IHT400 unless the estate is excepted (IHT205).
2. Pay outstanding IHT on the estate
3. Administer the estate within a reasonable time and with diligence
4. Duty of care (in relation to investment, delegation, insurance powers).

Question 5

What are the fiduciary duties of the PR?

Answer 5

• Avoid conflicts of interest
• Do not profit from the position (unless in accordance with will).

Question 6

What are the PRs duties under grant?

Answer 6

1. Identify and obtain the assets and administer them according to law
2. Provide inventory and account to beneficiaries or creditors for estate accounts on their request
3. Administer the estate with due diligence and 12 months from the date of death, otherwise must justify the delay.

Question 7

How do the statutory powers interact with the will?

Answer 7

Intestate = all statutory powers apply

Testate = statutory powers only apply to the extent that they do not conflict with the powers as set out in the will.

Acting outwith the powers is a breach of duty and PRs must exercise the discretion unanimously unless the will states otherwise.

Question 8

What are the statutory powers?

Answer 8

1. Power to sell, charge or lease property;
2. Power to appropriate property in satisfaction of beneficial entitlement;
3. Power to insure
4. Power to delegate
5. Power to run a business
6. Power to appoint a trustee
7. Power to invest
8. Power to charge for services
9. Power to reimburse for expenses

Question 9

What is the power to appropriate?

Answer 9

The PR can appropriate property in satisfaction of a beneficiary’s entitlement, provided:

1. Another beneficiary is not prejudiced (i.e because they are entitled to the item);
2. Consent of recipient beneficiary obtained; and
3. Value of asset at date of transfer does not exceed the beneficiary’s entitlement.

If the value of the asset is less than the beneficiary’s entitlement, the PRs can make a balancing cash transfer.

Question 10

What is the power to invest?

Answer 10

PRs retain assets for a period of time and have a duty to preserve the estate by actively investing. Can invest in UK freehold or leasehold land and must regularly review investments in accordance with the standard investment criteria, obtain advice etc.

Question 11

What is the power to delegate?

Answer 11

Delegation in writing and a written policy statement. Must review policy statement regularly.

Cannot delegate the following duties:
* Distribution
* Fees / costs payable from capital or income
* Appointment of trustees, nominees and custodians.

Question 12

What is the PRs liability under the trust?

Answer 12

PRs are personally liable for breaches of trust or acting outwith their powers, for example:
* Negligence
* Maladministration
* Wrong distribution
* Misuse of assets
* Breach of fiduciary duty

Question 13

Who can claim against the PRs and for what?

Answer 13

Beneficiaries and creditors can apply to the court to claim against the PRs and may claim:
1. compensation;
2. account of profits / transaction set aside (breach of fiduciary duty); and
3. Removal of PR

Question 14

What protection can the PRs obtain for missing beneficiaries?

Answer 14

1. Presumption of death after 7 years under 2013 Act;
2. Benjamin Order = order of court that beneficiary presumed dead and can distribute accordingly;
   * Must be no reasonable prospect of knowing the true position without disproportionate expense.
3. Payment into court;
4. Insurance (but won’t work if risk is too high).

Question 15

What protection can the PRs obtain for unknown beneficiaries?

Answer 15

s.27 TA 1925: publish in London Gazette, trade magazine or newspaper circulated on land subject to trust. After 2 months, can distribute without liability if beneficiary does not come forward. However, if PR also a beneficiary, will still have liability to other beneficiaries.

Question 16

What can PRs do when they are having trouble interpreting the will / powers?

Answer 16

1. Ask the court for directions; or
2. obtain a written legal opinion provided there is no dispute between the beneficiaries (s.48 AJA 1985); or
3. Seek indemnity
4. Seek exoneration by court (s.61 TA 1925)

Question 17

What is a grant of representation?

Answer 17

It confirms that the PRs have authority to distribute the estate: they may not be able to transact with the estate property (i.e pensions, bank accounts, house etc) without it.

it also confirms the identity + date of death of the deceased, the validity of the will, the identity of the PRs and value of the estate.

Question 18

What is the effect of the grant?

Answer 18

• Makes will a public document;
• Confirms executors’ authority (derived from will)
• Administrators’ authority to act derives from grant + succession estate only vests in them when grant issued.

Question 19

What are the 3 types of grant? When is each used?

Answer 19

1. Grant of Probate = used where there is a valid will and at least 1 executor willing to act.
2. Grant of letters of administration (with will) = used where there is a valid will and executors were appointed but none were willing or able to act.
3. Grant of letters of administration (without will) = used where there was either no will, invalid will, will revoked.

Question 20

Which assets can be dealt with without a grant?

Answer 20

• Items outwith the succession estate
• Items which qualify under the Administration of Estates (Small Payments) Act (i.e National Savings, bank acs, savings certificates, premium bonds, salary arrears, personal household possessions and cash) and have an aggregate value of less than £5000
• Personal chattels owned solely by the deceased and which are not gifted to another by will (delivery is transfer and there is no proof of ownership required).

Question 21

What should be checked before applying for a grant?

Answer 21

• Identify and collect in assets
• Identify banks, government etc of the death and obtain the death certificate
• Secure assets (i.e car and house)
• Value the estate
• Repay debts

Question 22

What is required to make an application for grant?

Answer 22

• ORIGINAL will and any codicils
• Probate fee
• Fee per sealed copy of grant
• Death certificate (personal applications only)
• If made by solicitor / probate practitioner then use PA1P (will) or PA1A (no will)
• PA1A / P = will include details of estate assets and liabilities for IHT purposes.

Question 23

i.e how many executors etc?

What is the procedure for a grant of probate?

Answer 23

• At least 1 executor (regardless of what is in the estate)
• 2 trustees where there are minority interests
• Maximum of 4 executors to be named on application but otherwise unlimited number - those who are not named can reserve power to apply for grant of double probate later.
• Those who apply for grant of probate must notify those who have reserved power.

Question 24

What is the procedure on death of an executor?

Answer 24

If they die before the deceased or before applying for grant, then provided there is still at least 1 executor, will simply have no consequences. However, if not then will go to chain of representation and the PR’s PR will administer estate of the deceased.

Question 25

When is an executor unable to act?

Answer 25

* Mental incapacity * Die before taking out grant * Minors (validly appointed but cannot act, may reserve power) * The testator's former spouse or cp and the divorce / dissolution happened before the making of the will (unless will says otherwise).

Question 26

What are the executor's options if unwilling to act?

Answer 26

* Renounce power to apply for grant * Reserve power * Appoint Power of Attorney * Citation

Question 27

What is renunciation?

Answer 27

* The executor renounces power to apply for grant of probate * this is final and binding (unless court order says otherwise) * Must do this before intermeddling with estate (i.e distributing etc but preliminary steps, ie securing house, are fine) * Sign form of renunciation and submit to probate registry.

Question 28

What is reservation of power?

Answer 28

Where the executor reserves the right to apply for grant of double probate further down the line and become an executor. Can do this even if there has been intermeddling. Other executors must obtain consent of those with reserved powers before applying for grant. Must be at least 1 other executor willing to act + admin not yet complete.

Question 29

What is the effect of appointing a power of attorney?

Answer 29

* Can delegate executor's obligations to someone else after grant obtained 12 months ago and notice given to other executors. * If want to appoint POA before grant, POA can make a parallel app for letters of administration (with will) and supplies POA.

Question 30

What is citation?

Answer 30

Where an executor is being difficult, i.e not wishing to act but not renouncing power, the other executors can apply to the court to force the executor to act, to renounce or authorise someone else to take on admin.

Question 31

What are the requirements for administrators?

Answer 31

* Must have at least 1 * Must have at least 2 where there are minor interests or life interests in the estate * Maximum of 4 generally.

Question 32

What happens when one of the proving administrators dies?

Answer 32

If they die before applying for the grant or before the deceased and there is no other administrator, then the court may grant letters of administration de bonis non.

Question 33

What are the administrators options when they are unwilling to act?

Answer 33

* Renounce power = even where intermeddling * Cannot reserve power * Appoint POA * Citation

Question 34

What is the procedure for letters of administration (with will)?

Answer 34

NCPR 20: entitlement to grant correlates with distribution of the estate under the will. Person in one category cannot apply if someone in a higher category is willing to act (clear off). 1. Executor; 2. Trustee of residuary estate 3. Any residuary beneficiary (whether absolutely or for life, or, where partial intestacy, beneficiary of estate under intestacy) 4. PRs of anyone in 3 other than trustee or life tenant of residue 5. Any other beneficiary or creditor 6. PRs of any other beneficiary or creditor

Question 35

What is the procedure for letters of administration (without will?)

Answer 35

NCPR 22: must have a familial connection to the deceased + beneficial entitlement under the estate * Must clear off * Preferential for vested interest in same category * PR of any applicant who survived deceased but died pre-grant can apply but living person in same category is preferred. Order of priority reflects intestacy rules: 1. Spouse / cp 2. Children 3. Parents 4. Whole blood siblings 5. Half blood siblings 6. Aunt and uncle (whole) 7. Aunt and uncle (half) 8. Crown 9. Creditor or person who does not receive benefit but would have if estate was larger.

Question 36

What is an affidavit?

Answer 36

An affidavit is a written statement of fact signed under oath and the author swears or confirms that the contents are true. Used where there is a valid will but something about it (e.g drafting or execution) renders it uncertain.

Question 37

What are the requirements for a valid affidavit?

Answer 37

* Jurat (authenticating statement) * Signed by all parties and dated * Completed and signed by a witness (independent solicitor or commissioner for oaths, their name, address + qualification) * Must follow on immediately from text, not on a separate page.

Question 38

When might an affidavit be required?

Answer 38

**Affidavit of due execution** * Where dates are wrong or incomplete * Signatures oddly placed * Inadequate / no attestation vlause **Affidavit of Knowledge and Approval** * Where the presumption of k&A does not apply, ie because the testator was illiterate, blind or signing suggests frailty and the affidavit does not demonstrate sufficient adjustments. **Affidavit of Search / Alterations / Attempted Revocation / Plight and Condition** * Non-consecutive page numbers * Pages missing or ripped out * Shredding, burning or other evidence of revocation * Paperclip marks * Holes **Original Will Missing** * Copy of will can be admitted to probate if court order approved, affidavit to show evidence will existed after death, due execution and wishes accurately reflected to obtain this order.