6 Administration

Question 1

What is administration?

Answer 1

The legal process of managing the distribution of a testator’s estate, paying debts, taxes, estate expenses, and the beneficiaries

Question 2

A PR appointed by will is called…

Answer 2

An executor

Question 3

A PR appointed by statute is called…

Answer 3

An administrator

Question 4

What is a grant of representation?

Answer 4

A court order confirming the authority of the PRs to act

Question 5

A PR has no legal authority to deal with what kind?

Answer 5

Assets outside the succession estate

Question 6

May a PR also be a beneficiary to the estate?

Answer 6

Yes

Question 7

From where does an executor’s authority to act come from?

Answer 7

The will. Grant of representation is just confirmation of this authority.

Question 8

From where does an administrator’s authority to act come from?

Answer 8

The grant of representation

Question 9

Does the Land Registry require a grant before transferring legal title of land?

Answer 9

Yes

Question 10

If a firm is instructed by PRs, who is the firm’s client? PRs or beneficiaries?

Answer 10

The PRs - a solicitor can only take instructions from the PRs

Question 12

If a solicitor is appointed as an executor of a will, who are their professional duties owed to?

Answer 12

The estate creditors and beneficiaries

Question 13

A PR is personally liable for loss caused by a breach of duty. T/F?

Answer 13

True

Question 14

What are the legal duties of a PR BEFORE the issue of a grant?

Answer 14

1. To dispose of the deceased’s body
2. To provide info about the estate to HMRC and pay IHT

Question 15

A grant will not be issued until…

Answer 15

The required info about the estate has been reported to HMRC, AND any IHT due has been paid

Question 16

What is “required info about the estate” reportable to HMRC?

Answer 16

The assets and liabilities of the estate

Question 17

PRs pay IHT on assets of the succession estate ONLY. T/F?

Answer 17

Yes

Question 18

The PRs may be required to use personal assets to meet IHT liabilities. T/F

Answer 18

False

Question 19

What is a PR’s duty to provide inventory and account?

Answer 19

PRs must maintain ‘estate accounts’, ie a list of assets and values (inventory), and a record of the steps they have taken in the administration (account)

Question 20

PRs should complete the administration within…

Answer 20

Within 12 months of the date of death (the ‘executor’s year’). From this point onwards, PRs must justify any delay

Question 21

When do statutory powers of PRs apply?

Answer 21

When the deceased died intestate, OR
If there is a will, to the extent the statutory powers do not conflict with the will

Question 22

Statutory powers vs express provisions

Answer 22

Express provisions > statutory powers

Question 23

Upon distribution of assets, when is the value of the asset considered?

Answer 23

At the date of transfer/appropriation, NOT date of death

Question 24

What is a PR’s duty to invest?

Answer 24

If PRs retain assets for a period of time, they have a duty to preserve the estate and actively invest (regular reviews of investments, for example)

Question 25

A professional PR can only charge for their services if...

Answer 25

They are NOT acting alone, AND the co-PRs give written consent. If there is no co-PR consent, the professional PR is considered to be self-dealing

Question 26

When exercising a lawful power to sell/transfer an estate, a jointly appointed PR does not have authority to act alone. T/F?

Answer 26

False - the PR will usually have authority to act alone. However, to exercise any other discretionary powers, joint PRs must act unanimously

Question 27

When is a PR personally liable?

Answer 27

When there is a loss that resulted from their breach of duty, or other PRs' breaches if the PR did not make reasonable effort to monitor co-PR conduct

Question 28

When may a PR seek court guidance?

Answer 28

When the administration is foreseeably difficult, will is ambiguous, and there is a risk PR may incur personal liability

Question 29

What is a s48 AJA application?

Answer 29

Distributing a will in accordance with written legal opinion - usually when there is a question of the construction of the will

Question 30

What is the s27 TA protection?

Answer 30

Trustees may publish a notice of their intention to distribute to known beneficiaries two months after the date of advertisement

Question 31

Requirements for a s27 TA notice?

Answer 31

It must be placed in The London Gazzette, a newspaper circulating in the area in which any land held on trust is situated, and any other appropriate newspaper

Question 32

A s27 TA notice protects PRs against..?

Answer 32

Unknown beneficiaries and creditors

Question 33

What is a Benjamin Order?

Answer 33

An order that permits PRs to distribute the succession estate on the basis that the missing beneficiaries have died (this is used for known but missing beneficiaries since the s27 TA notice cannot be relied on)

Question 34

What is the Presumption of Death protection?

Answer 34

An application for a court order declaring that a person thought to have died, or not known to have been alive, for SEVEN YEARS OR MORE has DIED.