Administration Flashcards
What form is used when applying for a grant of representation where there is a will?
PA1P
In what context will the chain of representation rule not apply?
Where more than one executor was appointed to administer the estate, and has survived the deceased executor.
What form is used when applying for a grant of representation where there is no will?
PA1A
Who can administer an estate without an executor but a valid will?
NCPR 20 applies
1) Trustee of the residuary estate
3) Residuary beneficiary (including life tenant)
4) PRs of any residuary beneficiary (other than life tenant)
5) Any other beneficiary or creditor
6) PR of the above.
Who can administer an estate where intestacy occurs?
- surviving spouse
- children
- parents
- siblings (full)
- siblings (half)
- grandparents
- uncles and aunts (full then half)
- the Crown
- a creditor
What is two extra condition for applicants under the NCPR 22?
- Need a beneficial entitlement in the estate;
- Spouse cannot apply until 28 days have passed following date of death.
What is the purpose of ‘clearing off’ when applying under NCPR 22 ?
A person in one category cannot apply if anyone in a higher category is able and willing to act as administrator.
* applicant(s) is lower category must explain why anyone with a better right to apply is not doing so (known as “clearing off”).
Can a minor act as a PR?
No, must be over 18, but power can be reserved if appointed in will as executor and apply for probate on attaining 18 years (NCPR 33(1))
What are the four types of grant of PR?
Grant of probate: valid will with appointed executor intending to act.
Grant of letters of administration (with will): valid will but no executors are appointed or those appointed are unwilling or unable to act.
Grant of letters of administration: no valid will or intestacy.
Grant of administration de bonis non: allows for administration to be completed after the sole/last PR dies.
* not needed if there is a chain of representation.
What is the process for a professional application for probate?
1) Mandatory online application (includes most grants of probate) for professionals
2) Online application possible but not mandatory for lay-people.
* applies to simple applications e.g. sole applicant and no minors /life interests)
3) Mandatory paper application for complicated cases.
* grant of double probate
* Original will is missing or there are issues with the will
* Attorneys
* Grant under NCPR 20 if life interest arises
What is the content of a PA1A/P?
- confirms identity of the deceased and the applicants.
- justifies the type of grant requested and their entitlement to act as PR
- provides information about the value of the estate and its inheritance tax (IHT) status.
- complete the legal statement on the probate form confirming the information provided is correct and they will administer the estate properly
What four scenerios require an affidavit to be sumbitted to the Probate Registry alongside an application for grant?
Where there is a problem with will, including to confirm:
a. Due execution
b. Date (if will is undated)
c. Confirm any alterations made to the will
d. Physically damaged will
e. Steps were taken to locate missing documents.
Who must sign off on the estate accounts?
all PRs and any residuary beneficiary
How many applicants can apply for a grant of probate?
Minimum - 1 applicant
Maximum - 4 applicants
When will more than 1 PR be required?
Where an administrator is appointed (cf. executor) are there is either a minor or life interest.
Where there is only one able/willing person in the category with best entitlement to apply, that person may apply for the grant with somebody from the next category of entitlement.
When is a professional valuation of assets needed?
1) Any chattels worth over £500 each
2) Land - minimum of two estate agents
3) Joint property - ascertain whether it is held jointly or as tenants in common.
Who is excluded from acting as a personal representative of the deceased’s estate?
- pre-deceased D - note special rule about chain of representation
- Minor - power can be resevred, and can apply once 18 yrs old.
- Lacks capacity
- Testator’s ex-spouse, initially named in will as executor. Treated as if pre-deceasing the deceased, unless expressly overriden.
What must an executor with ‘reserved power’ do once they wish to start administering the estate?
apply for a grant of double probate
Can an executor who intermeddled in the estate still reserve power?
Yes, they simply cannot renounce their powers altogether.
Can power to carry out the administration on an executor’s behalf be delegated?
After grant - valid for max.12 months subject to renewal.
Before grant - delegate power to apply, but for grant of letters of admin. (by will) since it is not named in will directly.
Where an executor is unwilling to act, but has not yet renounced, what powers do the estate’s beneficiaries have?
Apply to court to compel executor to either act or renounce, to then allow someone else to be appointed.
* called a citation.
What are the duties of the PRs?
- Collect deceased’s interests in property within a reasonable time and taking reasonable steps.
- Duty of care
- To carry out inventory and prepare Estate Accounts.
- Preserve the estate and realise investments that cannot be properly retained within a reaosnable time.
- Distribute estate
- Fiduciary duties
- Dispose of the body (common law)
- Provide info to HMRC and pay IHT (statutory)
What must be completed before a grant to administer the estate can be obtained?
Required reporting to HMRC and IHT tax must be paid
How should reporting to HMRC by PR be completed?
They do so by completing form IHT 400.
- An IHT 400 will be completed for any estate that is not excepted.
When is an estate excepted?
1) Low value excepted - no IHT is payable as gross value of the estate falls below the NRB.
2) Exempt excepted estate
* Gross value of the estate is less than £3 million and everything is left to spouse/charity (so below NRB amount).
Even if conditions (1) or (2) are met, special exception does not apply if any of these is relevant:
* GROB
* Foreign assets in excess of £100k
* Trust (not passing to spouse) exceeding £250k
* Specified transfers exceeding £250k
* Claim is made for RNRB
What is the PRs duty to ‘collect in’?
To comply with this duty PRs must:
* Identify and locate the deceased’s assets (including sums owed to the deceased)
* Identify the deceased’s liabilities and creditors
*Obtain control, possession, or legal ownership of the assets
Can a beneficiary or creditor see the estate Accounts?
Yes, and if PRs refuse, or have not maintained adequate records, an application to court to produce these can be made.
When should estate administration be completed and IHT paid?
Administration must be completed within 12 months of the date of death.
* If it takes longer, PRs are required to justify any delay.
Inheritance tax within 6 months from end of month of death.
How can administrators raise funds to pay for IHT?
1) Bank makes a direct payment from the deceased’s account straight to HMRC.
* Procedure: PRs should indicate on form IHT 400 that they intend to use the Direct Payment Scheme and fill a separate schedule (IHT 423) for the bank.
2) Borrow money from a beneficiary – interest free.
3) Bank loan – interest applies.
