Administration

Question 1

What must a PR calculate when administering estate?

Answer 1

Whether the deceased is solvent or insolvent

If unsure must administer as if it was insolvent

Payment of debts in wrong order could render them devastavit

Question 2

When is an estate solvent?

Answer 2

Sufficient assets to discharge the testator’s funeral, testamentary and administration expenses debts and liabilities.

Question 3

How should mortgages be dealt with?

Answer 3

Under s35 Administration of Estates Act 1925 the repayment of mortgages must be made from the properties themselves unless contrary intention shown

Examination of wording in will

Difficult to interpret

Question 4

What are the contrary intentions?

Answer 4

Ability to vary s35

Gift of a property to a specific beneficiary ‘free of charge’

General direction in Will that all debts to be paid from another special particular fund

General direction to pay testator’s debts from residuary estate. Must include words that expressly or impliedly refer to the secured debts

Document other than will

Question 5

2 cases of secured debts

Answer 5

Re Birmingham Savage v Stannard 1959 - Testator died between exchange and completion. Could treated lien as a secured debt.

Ross v Perrin Hughes 2004 - reverse effect on s35 - life insurance policy to cover charged property

Question 6

What should be applied for where there are unsecured debts

Answer 6

Statutory order

Part II Sch 1 Administration of Estates Act 1925

Difficult to vary

Question 7

Order payment of unsecured debts

Answer 7

Property undisposed of in the will - Para 1

Residuary Estate - Para 2

Question 8

Notable cases

Answer 8

Re Worthington

Re Kempthorn

Re Gordon