PR duties

Question 1

What is the role of a PR?

Answer 1

Fiduciary in nature and are subjected to fiduciary duties - they are personally liable for loss caused by breach of duty.
* have duty to act within the scope of their powers when carrying out administration: comes from either statutue or will/codicil

duties of PR have key statutory and common law obligations

Question 2

What is the duty of a PR before issue of grant?

Answer 2

• Common law duty to dispose of deceased’s body
• Statutory duty to provide information about estate to HMRC and pay Inheritance tax due.

Grant will not be issued unless information required to be reported to HMRC has been deluvered and IHT due is paid.

Question 3

Duty to inform HMRC and pay IHT?

Answer 3

• PRs must notify HMRC about assets and liabilities of estate
• done by completing IHT 400
• IHT is paid using estatefunds

all must be complied with before grant is obtained

Question 4

What are the duties of PR under the grant?

Answer 4

• Collect and get in real and personal estate of deceased and administer according to law
• Provide inventory and account of estate assets

duties are owed to estate beneficiaries and creditors

Question 5

What does it mean for a PR to “collect in”?

Answer 5

• identify and locate deceased’s asset
• identify the deceased’s liabilities and creditors
• obtain control, possession or legal ownership of assets

Question 6

What does it mean for a PR to administer the estate?

Answer 6

• keeping assets secure
• paying deceased’s debts and liabilities meeting administration expenses
• paying legacies
• and distributing residue to those legally entitled

Question 7

What does it mean for a PR to provide inventory and accounts?

Answer 7

• PR must keep a list of assets and values and record of steps taken in administration - recorded in Estate Accounts
• beneficiary or creditor may ask to see estate account - if PR refuses or have not maintained adequate records, an application to court (by NCPR) for an order to provide inventory and account may be made

Question 8

The duty of due-diligence?

Answer 8

• While PRs are free to make their decisions and how best to carry out their duties within their power, they have a general duty to carry out administration with due diligence and within reasonable time
• PRs should complete administration within 12 months of date of death (executor’s year) - if taken longer, this isn’t necessairly a breach but from this time PRs ae required to justify delay.

what amounts to due diligence depends on facts of case and court decides a breach has occured it can make declaration as to brecah and direct inquiry as to damages

Question 9

When does a PR role end?

Answer 9

Once administration is finalised BUT their appointment is for life:
* if additional assets are discovered after administration is complete, PRs have duty to administer assets
* ongoing risk of personal liability if creditors or beneficiaries, who weren’t known at time, comes to light after estate is fully administered and demand their entitlement

Question 10

What is the statutory duty of care of PRs?

Answer 10

Subjected to the same as trustees - duty of care imposes a higher standard for professional PRs (solicitors) than lay trustees, also higher standard is imposed upon those possessing special knowledge or experience as well as those who hold themselves out as having special knowledge and experience .

Question 11

What fiduciary duties are PRs subjected to?

Answer 11

They must not, unless authorised by courts or fully informed beneficiaries:
* place themselves in a position of conflict
* profit from their position - does not include payment of service where PR acts in professional capacity or paymenst are authorised by will.