Administration Flashcards

Question

Capacity to act?

Answer 1

- Unable to if they - Predeceases the testator - Are a minor - Lack capacity - Are the former spouse of civil partner Only one executor is requiring even if there are minor or life interests that arise – practical reasons 2 are normally appointed = power can be reserved to any remaining executors – which means they would be able to apply at a alter date if a vacancy arose and – need to apply for a grant of doubt probate

Answer 2

- If a grant has been taken out and one of the appoints dies before complete - If at least one remains – they may continue with administration and if falls below minimum needed then another one can be appointed

Answer 3

- Chain or representations applies or * Would apply if the last surviving executor dies having appointed an executor of their own estate and this person takes out the grant of probate for e’s estate- then that executors automatically become executor of original testators’ estate as well as being executor for the second estate – NO ADDITONAL GRANT IS REQUIRED * S7NDOES NOT APPLY WHERE ADMINSISTARTIORS ARE ACTING - Grant of letters of administration de bonis non is issued * IF A chain of representation cannot be issues – a second grant will be issued – 3 requirements * The administration is incomplete * No remaining prs * There has been a previous grant of representation - 1 administrator is needed UNLESS life or minor interest where 2 will be needed - Appointment of administrators by court - Administrators’ authority to act - Whereas PR is applying for letters of administration – order follows intestacy rules.

Answer 4

Renunciation - Sign a form of renunciation - Cannot later change mind without court approval - CANNOT DO THIS IF THEY INTERMEDDLE – Funeral doesn’t count Power reserved - Grant of double probate runs con-currently – only appropriate if the administration has not completed - Must give notice of intention to apply to executor who has the power reserved - Must be at least one other that took out a grant of probate – if you have intermeddled you can still reserve power - Where power is reserved to an executor, who are apply for probate must give notice of their intention to apply for the executor to whom power is reserved. Use of an attorney - After the executor ahs obtained a grant – maximum of 12 months can power be delegated – this can be renewed If needed - Before a grant has been obtained – the executor is delegating the power to apply for a grant

Answer 5

Can renounce – a form of renunciation must be signed and submitted to private registry with the application for the grant – next best entitled person can apply - Not prevented from renouncing even if they have intermeddled with the estate - appoint an attorney CANNOT RESERVE POWER But, what happens if those entitled to apply refuse to act but also refuse to renounce their right to apply? Or, what if an executor intermeddles in the estate (and is thus unable to renounce) but refuses to apply for the grant? In these situations, it is possible to obtain a court direction (using the citation process) to: * Require a person to take out a grant * Remove their right to apply * Authorise another person to take on the administration

Answer 6

- Administrators are appointed under this grant - Entitlement to apply derives from rule 20 The order in Rule 20 broadly follows the entitlement to the estate assets. (a) executor; (b) trustee of the residuary estate; (c) any residuary beneficiary (whether taking absolutely or for life), or, where there is a partial intestacy, a beneficiary of the estate under intestacy; (d) the PRs of anyone in (c) other than a trustee or life tenant of the residue; (e) any other beneficiary or a creditor; (f) PRs of anyone in (e).

Answer 7

- Where the deceased died without a valid will - Entitlement derives from rule 22 NCPR - The order in Rule 22 broadly follows the entitlement to the estate under intestacy. - (a) surviving spouse or civil partner - (b) children of the deceased - (c) father and mother of the deceased - ) whole blood siblings (share both parents) - (e) half-blood siblings (share one parent) - (f) grandparents - (g) uncles / aunts of whole blood - (h) uncles / aunts of half blood Under Rule 22(4), the PR of any applicant who survived the deceased but died before taking a grant may apply on their behalf, although an application by a living person within the same category is preferred. Applicants must demonstrate the nature of their familial relationship with the deceased (to evidence which category they fall within). In addition, they must also have a beneficial entitlement under the estate. BEEFICIAL ENTITLEMNT CAN ALSO BE if you would have inherited if the estate had been bigger - SO FOR CHILDREN AND RESIDUARY

Answer 8

A person in one category cannot apply if anyone in a higher category is able and willing to act as administrator The applicant(s) must explain why anyone with a better right to apply is not doing so (known as “clearing off”). Applicants do not need to explain why a person in the same category i.e. with an equal entitlement is not making the application. If one of two residuary beneficiaries (c) applies for the grant, the applicant must “clear off” (b) by e.g. confirming no trustee of residue is appointed, and (a) by e.g. confirming the sole appointed executor has pre-deceased. But the applicant is not required to “clear off” anyone in (c), i.e. explain why the other residuary beneficiary is not applying.

Answer 9

Only one administrators is requires unless there are minor or a life interest in the estate If two are required but only one is willing to act someone form next best entitlement to apply

Answer 10

- Duty to deliver an account to HMRC regarding the deceased’s estate - Pay any IHT dude Should – include all the property comprising deceased’s taxable estate and exemptions and reliefs that apply

Answer 11

- 12 months from the END of the month in which the death occurred - Deadline for PAYING IHT IS - 6 months from the end of the month in which the death occurred But in practice - Grant will not be issued until info about estate has been rpvided to HMRC and any IHT has been paid

Answer 12

- Paid by 10 equal annual instalments - Remaining instalments are due on subsequent anniversary date with interests charged on any IHT that remains outstanding after the initial deadline starts - To avoid interests – instalment option is only really used when needed – if insufficient liquid assets and PRs wish to avoid sale of family home to raise funds to pay tax. - Operates on, land, company shares giving decades control, some unquoted shares. Dorms or interest in farming, business interest, timber. - If anything is sold – then IHT is due immediately on that estate

Answer 13

- Direct payment scheme to HMRC directly from BANKS. - Or get a bank loan - Or get a loan from beneficiary - Revised information sent to HMRC in form C4 - Prs can then apply for the grant

Answer 14

If state is not accepted – form IHT 400 must be submitted to revenue within 12 months of due, interest on IHT is due from end of 6 months from death. Two categories of excepted state Low value – - no IHT payable and the reasons for this is because the gross value of the estate is below the NRB Exempt - An exempt excepted estate is one where: * the gross value of the estate is no more than £3 million, but * no IHT is payable, and the reason for this is because * after debts are deducted and spouse and/or charity exemption are applied the net value of the estate is below the NRB. (N.B. Debts alone cannot bring the estate into exempt excepted status). - The meaning of gross value and NRB are the same as for the low value excepted estate. Only spouse/civil partner or charity exemption can be considered for these purposes – no other reliefs can be taken into account

Answer 15

- If - any of the following apply, the estate cannot be excepted: - * The deceased made a GROB that subsists at death (or the reservation ended in the 7 years - prior to death and the transfer was not exempt) - * The estate includes either more than one trust interest, or, a single trust interest worth more - than £250,000 (and is not passing to spouse) - * Foreign assets are worth more than £100,000 - * The value of specified transfers exceeds £250,000 - * A claim for the RNRB is being made (the claim for RNRB - IHT 435/6 - would accompany the - IHT 400). An IHT 421 (the probate summary) should also be completed. It contains details about the deceased and a summary of the gross/ net succession estate (assets passing under the grant rather than the IHT estate).

Answer 16

Professional applications - Made by a solicitor or probate practitioner – - Mandatory online applications – includes most grants of probate - Online applications – simple applications under NCPR 20 AND 22 - Mandator paper application – non standard grants PA1A is sued when deceased did NOT leave a will PA1P is sued where deceased left a valid will Both applications require - Confirm identity of deceased - Justify type of grant - Provide info about value of the estate - Complete the legal statement on the probate form confirming the info provided is correct - If an IHT 400 was completed – HMRC will provide confirmation to probate registry using form IHT 421 - Attach a legal statement Completing the application - Registry fee – no fee for estates worth less than 5000 - Original grant – will provide the sealed copies as requested - A certified copy of death certificate - Testamentary documents – - Excepted estates 8. Power of attorney – is completed by the donor and also submitted with application for grant

Answer 17

Affidavit - A formal written statement of fact which a person signs under oath – - Signed by all parties and dates, JURAT Affidavit of due execution - Where will is valid but not complied with s9 - One of the witnesses can sign it If wills have marks - Affidavit of plight and condition - To confirm whether it was tried to be revoked, or if something was meant to be attached Assuming there is a clear sign to revoke gift to Kelly this alteration would be efefctie if it was made before the will was executed If original will I smissing – a copy of will can be admitted ot probate if there is a court order approving this If a will existed but cannot be found - A copy of will can be submitted if there is a court order and an affidavit is needed for the court order. Once all this is sent – and they are granted the grant of representation – they will be sent a few sealed copies to each asset holder so all the assets are sent to the PRs.

Answer 18

Collecting in assets An estate is solvent if the assets are sufficient to pay all the funeral, testamentary and administration expenses, debts and liabilities, and will be insolvent if the assets are insufficient to do so. It is immaterial whether legacies can be paid in full or not. Money collected should be paid into A prs bank acc ‘ A law firms client account Pay off any debts – if we have a solvent estate – If we have an insolvent estate

Answer 19

a debt is secured if it has been charged on deceased property during their lifetime – will bear primary liability for payment of debt secured against it unless a contrary intention is shown in the will Charged property will bear the main cost unless otherwise stated. - So, someone would inherit subject to mortgage and is not entitled to have mortgage debt discharged from other assets in the estate – therefore may have to sell the house Unsecured creditors - For solvent estates – order is not a primary concern

Answer 20

- If PR’s do take asset out of order the beneficiaries whose assets have been wrongly taken can use doctrine of marshalling – creditors are not bound by this and have no obligation to return the money – disappointed beneficiary could claim against the assets inherited by another beneficiary fi those assets should have been sued to repay the debts