Statutory powers of PRs

Question 1

can the statutory powers be changed?

Answer 1

if there is a Will, T can draft the Will so as to limit/extend/add to these powers

Question 2

what are the statutory powers?

Answer 2

1. power in relation to property
2. power to appropriate
3. power to accept receipts for a minor’s property
4. power to invest
5. power to run D’s business
6. power to appoint agents
7. power to appoint a power of attorney

Question 3

explain the power in relation to property

Answer 3

PRs can sell, mortgage, lease, charge, insure real + personal property which vests in them

Question 4

explain the power to approprite

Answer 4

PRs may appropriate any part of the estate in or towards the satisfaction of another gift apart from an asset which has been specifically bequeathed in the Will to another B (unless that B consents)

If a PR is also a B they couldn’t appropriate an asset for their own interest without the consent of all Bs because this would amount to self-dealing (unless the Will permits self-dealing)

Question 5

explain the power to accept receipts for a minor’s behalf

Answer 5

Minors cannot give good receipt for a legacy, but the Children Act allows parents to give good receipt on their behalf

Question 6

explain the power to invest

Answer 6

PRs have a general power of investment to make any kind of investment that they could make if they were absolutely entitled to the property. PRs must:
o Comply with the statutory duty of care
o Apply the standard investment criteria
o Obtain and consider proper advice

Question 7

what is the standard investment criteria?

Answer 7

Consider the suitability of the investment + the need for diversification

PRs must apply this criteria when reviewing investments + varying them

Question 8

at what time do PRs need to obtain proper advice? When do they not need to do this?

Answer 8

Must be obtained before investing + when reviewing

n/a if unnecessary i.e. one of the PRs is a financial advisor

Question 9

what can PRs not invest in?

Answer 9

PRs cannot invest in land, but there are separate powers to purchase freehold and leasehold property in the UK.

Question 10

what powers do PRs have in relation to running D’s business?

Answer 10

PRs can only carry on D’s business where:
o They are doing so for the purposes of winding it up; or
o There is express power in the Will

Question 11

when can PRs not appoint an agent? What are their obligations?

Answer 11

PRs can delegate their functions to an agent, not inc.:
o Distributing assets
o Deciding if fees are paid from capital or income

PRs must keep this under review

If investment functions have been delegated, they must produce a policy statement

Question 12

how long can a power of attorney be appointed for?

Answer 12

A PR can delegate their powers for up to 12 months