2.2 Probate - Administration of Estates Flashcards
What are PRs’ duties?
Collect T’s interests in property
- Within reasonable time
- Taking reasonable steps
Preserve estate
Realise investments that cannot be properly retained
- Within reasonable time
Distribute estate
Prepare inventory + account > Deliver up grant (if court requests)
Duty of care
- Act with skill and care as reasonable
- With special expertise (or as reasonably expected to have)
What breach may PRs be liable for? Who towards?
Unreasonable conduct > Loss
Liable to;
- Bens
- Creditors
- NOT fellow PRs/agents’ breach (UNLESS their negligence allowed the breach)
What are PRs’ powers?
Dispose property
- Sell
- Mortgage
- Lease
Appropriate estate => Satisfy legacy/interest/share
- NO prejudice to specific Bens
- Appropriate consents acquired
- NO self-dealing
Accept receipts > Minor’s property
Settle claims
- By estate
- Against estate
Insure land/other property
- Comprehensively
- Full value
Appoint + delegate > Agents (NOT Bens)
- Delegable functions
- Will restrictions may apply
- NO remuneration to Agents
Reimburse for admin expenses
Run T’s business (sole trader) > Realise estate
Power of investment
- Duty to review investments (time to time)
- Qualified advice required
- Purchase land (if authorised)
Maintain minors (PRs' discretion) > Property held for them (right to intermediate income) - Maintenance/Education/Benefit
Advance capital
- Max. 50% of Ben’s share for entitlement (before Oct 2014)
- Any amount of Ben’s share for entitlement (after Oct 2014)
How may PRs protect themselves from liability?
Section 27 advertisement (intent to distribute estate)
- London Gazette/Local newspaper (district of land of estate)/Other appropriate newspaper/Court’s further notices in admin action
=> Protect PRs (NOT Bens) > Liability for unpaid estate’s debts/liabilities
- Once time period expires => Distribute estate to pay off claims
- Interested persons > Send claim particulars to PRs’ solicitors (by certain date/within 2 months from date of notice)
PRs’ searches
- Land Registry
- Land and Local Land Charges Register
- Bankruptcy search vs T + Bens
Benjamin Order
- PRs can distribute estate > Assuming missing Ben predeceased T (after full enquiries made) + insurance
Set aside funds towards;
- Contingent liabilities
- Future liabilities
Untraceable known Bens > PRs can;
- Pay owed amounts to Court
- Distribute estate
- Claim indemnity from other Bens (who are subsequently claiming)
How may assets be realised?
Register office copies of grant > Institutions (where T holds assets to obtain sums due)
Collect + realise assets => Sale (subject to will conditions + tax considerations)
How may solvent estate be used to pay off debts?
Secured debts
- Secured property
Unsecured debts
- NOT disposed property
- Residue
- Property specifically given > Debt payment
- Property specifically charged w debt payments
- Retained pecuniary legacy funds
- Specifically devised/bequeathed rateable property
- General PoA > Appoint property expressly
- Gifts made in contemplation of death
- Nominated property
- Property > Option to purchase (conferred by will)
Marshalling (equitable doctrine)
- Residuary > Compensate Beneficiary > Discharge debts
How may insolvent estate be used to pay off debts?
Secured creditors
- Rely on security
- Realise security > Become unsecured creditor (for shortfall)
- Value security > Unsecured creditor to pay deficit
Unsecured creditors
1) Expenses paid first
2) Pay off (in any order) > Preferred debts/Ordinary debts/Interest/Deferred debts
- Paying inferior debts > Warrants sufficient assets to meet superior debts
- If other classes paid in full (in good faith) + estate becomes insolvent => NO liability
How may legacies be paid off?
Source
- Will provision
- Residuary
- Abatement
Power of appropriation
PRs can request receipt from Bens (NOT minors)
Income from asset (since date of death)
How may an estate be distributed?
1) Non-residuary gifts (NOT adeemed)
PRs should identify Bens
- Commorientes
- Illegitimate/adopted children
- Class gifts (contingent/immediate/closing/failure)
Interest
Assets
- Land > Written assent
- Shares > Stock transfer form
- Chattels > Simple delivery
2) Pecuniary gifts
Sale of assets (most appropriate)
- Value fluctuation of assets > Sale
- Assets increasing in value > NO sale (retain)
3) Residue
What is required for assent?
PRs’ acknowledgment > NO assent required for asset/administration of estate
- Writing (signed by PRs + Bens’ names specified)
- Oral
- Implied
=> Rent/Profit from land => Bens
What are the Beneficiaries’ rights and remedies?
Rights
- Compel proper administration of estate
- Intermediate income => Devise (NOT bequest) => Ben
- Contingent pecuniary legacy (investment required until contingency fulfilled)
- 6% interest (since legacy becomes payable) => Pecuniary legatees
Remedies
- Ensure due administration of estate
- Recover loss vs PRs + recipients of property from PRs (tracing)
